In 2004, Arun Shourie wrote a book titled Governance and the Sclerosis That Has Set In. That has descriptions of the Planning Commission, not by Shourie, but by senior officers of the Commission itself.



Here is a sample: (1) A gaushala; (2) A pinjrapol; (3) A parking lot; (4) A doormat; (5) An appendage, a subordinate office of the government; (6) A facilitator of what government wants to do; (7) An irrelevance, at least in regard to the way it is working; (8) A limb the government used to use to do and say things it didn’t want to say and do directly, but a limb which has by now atrophied too much to do even that much.



The Planning Commission was set up through an executive resolution in 1950. It isn’t a Constitutional body and as such, it is not even answerable to Parliament. Before the Finance Commission’s mandate was diluted, Plan versus non-Plan distinctions drawn and Central-sponsored schemes proliferated, the Planning Commission, oddly enough, was more powerful.



Victorian Children



Think of the period till mid-1960s. Deputy chairmen are political appointees and economists in that role are rare. DR Gadgil, DT Lakdawala, Manmohan Singh (then) and Montek Singh Ahluwalia are only exceptions. Such deputy chairmen, if they are good, should be like Victorian children, paraphrased: they should be heard, but should not be seen.



Montek Singh Ahluwalia has been anything but that, whether it is poverty line, trips abroad, expenditure on toilet improvement, armchair advising or public controversies with other ministers. John Kenneth Galbraith once told me an anecdote.



Briefly, the then Indian PM wrote to the then US president, asking for an American economist to help advise in the setting up of the Commission. Milton Friedman turned up. Aghast, Nehru wrote another letter, asking for a replacement, since the adviser did not believe in the institution of planning.



Galbraith was sent as a replacement. In 2004, when Montek Singh Ahluwalia was appointed as deputy chairman, I was reminded of this anecdote. No one can question Montek Singh Ahluwalia’s academic credentials. But what was he doing in the Planning Commission? What does the Commission do?



It prepares five-year plans, allocates funds to Central ministries and states and assesses projects, has annual plan discussions and even gets some research done. With increased reliance on market forces, all of these are now questionable functions. This is reinforced if one abolishes Plan/non-Plan distinctions, prunes schemes and restores the Finance Commission’s original mandate. In any event, annual plan discussions are a bit of a joke.



There is thus a broader agenda of restructuring Planning Commission, pruning and revamping it. This is not a new idea. As far as I know, such recasting recommendations have been floating around since 1964, more so since 1968-71. Apparently, such an exercise has recently been attempted, but one has heard more about it.



Consequently, the 12th Plan document, when ready, will read like version 12 of the first Plan document or version 11 of the second Plan document. All that has happened is since the 11th Plan, approach papers have been given an inclusive touch and some citizen participation was sought by inviting comments through Facebook.

He’s No Changemaker



On restructuring and reinventing, Montek hasn’t succeeded. This leaves the traditional agenda of discussions and negotiations with ministries and states. In these, there are reasons why deputy chairmen have been political animals. VT Krishnamachari, Ashok Mehta, C Subramaniam, DP Dhar, PV Narasimha Rao, Ramakrishna Hegde, Madhu Dandavate, Mohan Dharia, Pranab Mukherjee and KC Pant possessed those skill sets.



That’s not a skill set Montek Singh Ahluwalia is supposed to have. Why was he offered the job and why did he accept? It’s not for me to answer those questions. However, like the Galbraith anecdote, the impression of right person in wrong job remains.



Perhaps the idea, in 2004, was that Planning Commission hadn’t given up on reforms and was meant to incentivise those. There are two problems there. First, whether it is ministries or states, one needs a political person for that role too. Second, there has been a serious credibility issue.



For example, how can the Commission argue against Members of Parliament Local Area Development Scheme and then recommend that each Planning Commission member should have a discretionary research grant of Rs 1 crore a year? (That this idea was shot down by North Block is irrelevant.)





Kills Merit



In addition to expenditure on toilets, foreign trips and poverty numbers, there have also been question marks about growth and inflation projections. Partly there are problems with the composition of the Commission itself, with members appointed on basis of reservation and successful bureaucratic lobbying, rather than intrinsic merit. (I don’t think this was the case till the mid-1960s.)



Even when there is intrinsic merit, the system seems to kill it. However, since 2004, the biggest problem has been violation of the Victorian adage. The Planning Commission and Montek Singh Ahluwalia have unnecessarily been seen and have sometimes often voluntarily been dragged into debates, such as that over the poverty numbers. There was no need for the Planning Commission to be a party to court proceedings.



This has fundamentally been a PR disaster. The experience since 2004 vindicates what all those reports since 1964 have recommended. The Commission can’t be incrementally improved. One should do zero-based budgeting and junk it. It will save us administrative costs of Rs 100 crore a year.





(The writer is Consulting Editor, The Economic Times)