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Modi, CMs meet to discuss financial devaluation; Mamata to skip

The day-long meeting between Prime Minister Narendra Modi and Chief Ministers of states, his first such interaction after assuming office in May, is expected to rather stormy affair.

The meeting has been called to discuss the fate of the Planning Commission of India and deliberate on the shape of the new body that will replace it, but officials said CMs will be free to raise any other issue during the more than two-hour long second session, which will be between the Prime Minister and Chief Ministers without their aides.

Already, West Bengal Chief Minister and Trinamool Congress leader Mamata Banerjee, with whom the current Central government does not share a cordial relationship, has decided to skip the meeting. The state is expected to be represented by its finance and industries minister Amit Mitra.

Officials said the contentious issue of sharing central plan funds with the states is expected to figure prominently during the discussions.

There could also be a move towards tweaking the Gadgil-Mukherjee formula through which a part of the plan funds are devalued to the states.

States for long have been complaining that their untied funds devalued from the central government has got squeezed after the Central government started allocating higher sums through the Centrally Sponsored Schemes (CSS).

In 2013-14, the total central assistance to state government for plan expenditure was to the tune of around Rs 1,25,572 crore, of which Additional Central Assistance (ACA) for special and other programmes was around Rs 90,408 crore, that is  around 72 per cent.

Much of these ACA was tied to some central scheme or the other which limited states abilities.

Another segment of Central finances goes to the states through the Finance Commissions, which is operated under the supervision of the finance ministry.

On the Planning Commission, officials said as per the rough draft the new body is expected to be called ‘Neeti Aayog’.

It will comprise of four departments including Direct Benefit Transfer (DBT), UIDAI, Inter-State Councils and Programme Evaluation. All will be headed by separate secretaries, with the Prime Minister as the chairman of the body. Some of these bodies still function within the overall supervision of Planning Commission like UIDAI, which is an attached office.

Apart from the fate of Planning Commission and shape of the new body, the discussions are also expected to focus around cooperative federalism, centre-state relationship and most importantly the future of the five-year planning process.

Officials said as per the agenda finalized for the meeting, Chief Ministers have also been urged to convey their views on whether they want the present system of five-year plan, annual plans and state plans should be continued or junked all-together.  

The meeting will be held in two parts. In the first half, secretary of the Planning Commission will give a presentation on the current state of the Commission and work being done by it. “In the second session, Prime Minister Modi is expected to meet the Chief Ministers alone without their aides,” the official said. This, officials said is expected to be around for 2 hours duration.

In his maiden Independence Day speech, Prime Minister Modi had signaled the abolition of the Commission. Thereafter, a series of discussions were held between experts and economists on the shape of the new Planning panel.

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