Aug 16 2014 : The Economic Times (Delhi)
Don't Mourn the Planning Commission
Its role had evolved to suggesting policy coherence
Incremental changes in quantity add up to reach a tipping point, whereupon a further quantitative change leads on to a change in quality -this goes back to Hegel.
The Planning Commission had been undergoing such a process of change for some time: the state-funded investment in a Plan period in any sector has steadily been falling, as a proportion of the total investment the commission envisaged in the sector. Policy coherence and coordination, as well as incentive structures to channel private, including foreign, investment to desired sectors have, on the other hand, gained in its work output. Prime Minister Narendra Modi now wants to replace the planning body with a think tank, whose focus, presumably would be on policy choices to the exclusion of investment outlays. It reflects the reality of evolution in the commission's working.How would Plan allocations to states and schemes of the kind the commission used to carry out in the past continue? Outright scrapping of the procedure, so that federal transfers are limited to those recommended by the Finance Com mission, would be ideal. More realis tic would be the rump of the commis sion still playing a role in these sche mes. Of course, public-private part nership would get a boost in schemes to build toilets, given the new thrust placed on sanitation by the Prime Minister. Sewerage would still need to be built by the state.
It is welcome that the new government is building on the electronic banking infrastructure, comprising the Aadhaar project and the National Payments Corporation, to offer every household a bank account. The big plans the PM announced for education, healthcare and governance, besides financial inclusion, that leverage ubiquitous broadband all depend on data charges remaining low. This calls for a spectrum policy that prioritises citizen access over maximising state revenue from spectrum sales. Clearly , we need calibration of the tradeoffs between spectrum price and spectrum-enabled economic activity and growth. Who best to do this, other than the Planning Commission or its successor?
The Planning Commission had been undergoing such a process of change for some time: the state-funded investment in a Plan period in any sector has steadily been falling, as a proportion of the total investment the commission envisaged in the sector. Policy coherence and coordination, as well as incentive structures to channel private, including foreign, investment to desired sectors have, on the other hand, gained in its work output. Prime Minister Narendra Modi now wants to replace the planning body with a think tank, whose focus, presumably would be on policy choices to the exclusion of investment outlays. It reflects the reality of evolution in the commission's working.How would Plan allocations to states and schemes of the kind the commission used to carry out in the past continue? Outright scrapping of the procedure, so that federal transfers are limited to those recommended by the Finance Com mission, would be ideal. More realis tic would be the rump of the commis sion still playing a role in these sche mes. Of course, public-private part nership would get a boost in schemes to build toilets, given the new thrust placed on sanitation by the Prime Minister. Sewerage would still need to be built by the state.
It is welcome that the new government is building on the electronic banking infrastructure, comprising the Aadhaar project and the National Payments Corporation, to offer every household a bank account. The big plans the PM announced for education, healthcare and governance, besides financial inclusion, that leverage ubiquitous broadband all depend on data charges remaining low. This calls for a spectrum policy that prioritises citizen access over maximising state revenue from spectrum sales. Clearly , we need calibration of the tradeoffs between spectrum price and spectrum-enabled economic activity and growth. Who best to do this, other than the Planning Commission or its successor?
