DMPQ- Critically evaluate the role played by planning commission and mention the reasons why government eradicated it.

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There are two basic pillars of the argument against planning commission – first, the institution is not a fit in the liberalized environment where market calls the shots and second, it has long  played a role of distorting the true federal nature of Indian polity. Planning Commission is more  than 60 years old – modeled on Gosplan which was suited to a socialist economy in the then  USSR – and was created for a closed economy, situation has changed now.

Even a communist country like China has changed the nature and name of its planning commission as ‘National  Development and Reform Commission’ in wake of current requirements.

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Planning commission cannot do mundane work of distribution of resources in a competitive world and it should also focus on increasing productivity, promoting innovation and reforms, promoting center state  cooperation, setting a vision of development and so on. It has to adopt an integrated approach  and also identify key areas which require special focus from development, security and strategic  point of view. It should act like a deep think tank, not just a parking lot of IAS officers and  officials. It should be connected from ground and should not be like just another government  department. It has also be accountable for its plans.

  • It is accused of arrogating to itself certain executive functions. ARC recommended that it should confine itself to the planning only.
  • It has failed to play the role of a reform body which also failed to provide a strategic vision and come out with innovative ideas and practices.
  • Over the years, the share of Gadgil formula normal plan assistance has fallen to just 19% of the total PC assistance while those through CSS and special plans have increased.
  • While Finance Ministry is responsible for implementation of FRBM Act 2003, planning commission doesn’t have such responsibilities but at the same time its role in budgeting of plan expenditures over-rides that of Finance Ministry. This creates a dichotomy and imbalance between authority and responsibility.
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