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Planning Commission replacement shouldn’t allocate funds, say experts

A high-level meeting to frame a new body to replace the Planning Commission is learnt to have arrived at a broad consensus that allocation of Plan funds should not be the domain of the new entity but of the finance ministry. The new institution, it was agreed, could play the role of a “think tank”.

Officials in the know, however, said some had disagreed with the proposal. They felt if allocation was handled by the ministry, it could become extremely powerful, as there wouldn’t be adequate checks and balances in place.

“The experts felt the appraisal function of schemes and programmes, which the Planning Commissions used to perform, should be handed over to the finance ministry,” an official said.

There was also a view that the new body could carry out long-term planning (with a 10-30-year horizon), the entire funding for which should be decided beforehand, without pre-empting contributions by state governments.

Officials said the matter would now be decided by the prime minister.

They added there was a broad agreement that all important officials in the new organisation should have adequate domain knowledge, unlike the existing practice of appointing bureaucrats to these posts. “Issues such as how big the new body will be and who its members should be weren’t discussed at the meeting,” an official said.

On interaction with state governments, officials said the view was the ministries concerned should be responsible for that.

Among those who participated in Tuesday’s meetings were former ministers Yashwant Sinha and Y K Alagh, former Planning Commission members Bimal Jalan and Saumitra Chaudhuri, Bharatiya Janata Party leader M J Akbar, former chief economic advisor Shankar N Acharya, Business Standard Ltd Chairman T N Ninan, National Statistical Commission Chairman Pronab Sen, senior journalist T C A Srinivasa-Raghavan, former finance secretary Sumit Bose, economist Surjit Bhalla, Centre for Policy Research Chairman Pratap Bhanu Mehta and ICRIER Director Rajat Kathuria.

“They (the participants) have all given some brilliant suggestions. All these (ideas) will be compiled and sent to the prime minister,” said Yashwant Sinha.

Officials said a consensus had emerged that the new body should engage in vision-building; the issue of whether or not this should be through five-year plans didn’t see unanimity.

On the oft-repeated question of devising a new body on the lines of China’s National Development and Reforms Commission (NDRC), officials said most experts felt the new entity wouldn’t be able to perform that role, as NDRC was extremely, second only to the politburo in that country.


Broad consensus

  • Plan allocation should be handed over to finance ministry
  • Important postings in new body should be of domain experts, not bureaucrats
  • Not possible to make the new body as powerful as China’s NDRC


  • Finance Commission to be made a permanent body
  • On whether the new body should frame five-year Plans


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