REVIEW AND RESTRUCTURING OF PLANNING COMMISSION

 The proposal to form “Team India” with the Council 

of Chief Ministers and the Hon’ble Prime Minister as the chairperson 

to weave the economic agenda of the country together is welcome. I 

wholeheartedly compliment the Prime Minister for taking such a path 

breaking initiative.  The development of India lies in the development 

of States. The country cannot be strong if States remain weak.

II. Issues for Discussion

1. Cooperative Federalism: Platform for Interface between the Centre 

and the States 

So far, there is no effective platform to enable the States to express 

their views at regular intervals and to participate in the formulation of 

national policies. The platform that is now proposed will have to be 

effective to move towards the goal of cooperative federalism.

For effective interaction and to promote a sense of involvement, 

the Council of Chief Ministers under the chairmanship of the Prime 

Minister may participate as members of “Team India” to deliberate 

and decide on all the general and important policy issues concerning 

the entire country. However, for issues specific to a region or a few 

States, such as the ‘Ganga Action Plan’ or ‘Left Wing Extremism’, 

Chief Ministers of States concerned may be grouped into Sub-Groups 

to deliberate on issues specific to them.

A Permanent Secretariat, with representation from each State, 

may be put in place to assist “Team India” in its deliberations. 

The Secretariat may seek policy briefs and expert advice from the 

proposed “Think Tank” or even co-opt other experts. All the papers 

relating to policy issues may be circulated by the Secretariat well in 

advance to facilitate an informed discussion.

2. Strategic and Perspective Planning

The “Team India” comprising the Council of Chief Ministers and the 

Prime Minister shall envisage a Vision and a Perspective Plan for the 

States and the country as a whole at least for a decade. The present 

plan cycle of five-years does not look beyond the short and medium 

term and the Plan gets prepared  only after the completion of one or 

two years in the five year cycle. 

The needs of States differ widely depending on the levels of 

development in different sectors. In addition, there are state-specific 

problems which need to be addressed at the State level. In view of 

this, States may be given the freedom to prepare their action plan 

within the broad parameters laid down in the Perspective Plan. 

These dynamic action plans may be for a period of three to five years 

and integrated fully with the annual budgets.

The Perspective Plan should be indicative and also facilitate the 

participation of the private sector in nation building. With the private 

sector providing close to three- fourths of investment, it needs to be 

provided with an enabling environment to thrive and to play a 

complementary role to the public sector.

The indicative planning with a longer perspective will provide an 

opportunity to States to implement decentralized planning as 

provided for in Article 243 ZD of the Constitution. In fact, the new 

State of Telangana has  already taken the initiative of taking planning 

to the doorstep of people by launching “Mana Vooru - Mana 

Pranalika” or “Our Village-Our Plan” and moving up to “Our Block-

Our Plan”, “Our District –Our Plan” and ultimately to “Our State-Our 

Plan”. This will result in a paradigm shift in the planning process by 

converting it from a bureaucratic to a democratic exercise.

The top down approach to planning and increase in the number of 

centrally sponsored schemes along with the allocative role of the 

Planning Commission has reduced the space available to States.

Despite the focus on balanced development, inter-state and intra-

state differences have been increasing. The planning process should 

assume an effective redistributive role than in the past.

The present system of annual plan discussions with the Centre may 

be dispensed with. 

3. Innovation and Knowledge Hub  

The new institution’s primary role should be that of a “Think Tank”. 

The “Think Tank” should minutely examine present and future 

implications of each policy proposal and the new schemes. While the 

decision making will be done by “Team India”, “Think Tank” should 

provide technical inputs and will act as a friend, philosopher and 

guide.

The “Think Tank” will consist of experts in different subjects with 

proven track record. If necessary, experts from outside the country 

can also be inducted into the “Think Tank” selectively.  Linkages may 

also be established with reputed global think tanks.

The Think Tank or the Knowledge Hub should be the repository of 

best practices and success stories pertaining to States and assist 

other States to adopt them depending on their suitability and 

adaptability. Necessary guidance to States and handholding them in 

new innovative practices may be provided. 

The “Think Tank” may provide assistance and technical inputs to 

States to optimize the utilization of their resources and to achieve 

their potential.

4. Flow of Funds

In future, all transfers from the Centre may be based on the 

recommendations of the Finance Commission. The allocative role of 

the Planning Commission may be dispensed with. This will be in the 

true spirit of the Constitution and will result in doing away with the 

artificial distinction of transfers and expenditure into plan and non-

plan. The Constitution does not provide for such a distinction.

Most of the Expert Committees have recommended such a system of 

transfers from the Centre. The Finance Commission transfers have 

been found to be transparent, formula based and equitable as 

compared with the present system of plan transfers.

Though there has been a reduction in the number of centrally 

sponsored schemes, it has not resulted in any increase in untied 

block grants to States. This can be done by drastically reducing the 

number as well as allocations under the centrally sponsored 

schemes and transferring the resultant savings to states through 

untied grants. The present practice of tied grants has impinged on 

the freedom of States and ignores diverse situations across States 

and even within a State. This will provide greater flexibility to States 

to cater to the felt needs of the people, which differ widely from State 

to State.

When the emphasis is on social justice and inclusive and sustainable 

growth, there is an imperative to realign resources in favour of States 

because the services and programmes which are at the core of more 

equitable social order come within the purview of States.

5. Concluding Remarks

I once again thank the Hon’ble Prime Minister for convening this 

meeting with the Chief Ministers to discuss the restructuring of the 

Planning Commission. In the present context of nation building and 

making up for lost opportunities, I offer the Hon’ble Prime Minister my 

full cooperation. The initiative to make the States equal partners in 

progress and empowering them will make India a strong and vibrant 

Nation.