[Marxistindia] Manik Sarkar on Restructuring of Planning Commission

news from the cpi(m) marxistindia at cpim.org
Mon Dec 8 09:19:47 IST 2014


Speech of Manik Sarkar, Chief Minister of Tripura at the meeting convened by
the Prime Minister on the restructuring of the Planning held on 7th
December, 2014

 

Hon'ble Prime Minister and Colleague Chief Ministers,

"Planning" in India has always been a short-hand for "National Economic
Planning": it has necessarily been associated with the concept of the
"nation". The modern Indian "nation" was formed through the anti-colonial
struggle which had placed before the people a vision of a new India. This
vision was later enshrined in the Indian Constitution, its  economic
component being included in the Directive Principles of State Policy. The
realization of this vision which is the basis of our modern "nationhood"
requires conscious "planning" and cannot just be left to the spontaneous
operations of the capitalist market. "Planning" is thus an integral part of
India's modern "nationhood", and any talk of ending "planning" amounts to a
conceptual demolition of the "nation" itself. Since "planning" necessarily
has to be done by a specific body, i.e. a "Planning Commission", it follows
that the country cannot do without a new Planning Commission. And precisely
because such a body has the responsibility of realizing the vision
underlying the Constitution, it must be made more powerful, more accountable
and more autonomous of the Central Government than previous Planning
Commissions have been. 

Some suggestions regarding the mode of its establishment and the focus of
its activities are given below.

 

1.    Cooperative federalism: Platform for interface between Centre and
States

*        What should be the scope and method of interaction in this forum?

An institution entrusted with planning for the nation must be a permanent
body and have representation from both the Centre and the States. The
Planning Commission must be a body not of the Central Government alone, but
of the National Development Council where both the Centre and the States are
represented, and which in any case is at present the supreme agency
overseeing economic development in the Country. (Or if this is considered
insufficiently authoritative, owing to the NDC's not enjoying a
Constitutional status, then the new Planning Commission could be set up by
the Inter-State Council which is a Constitutional body).

*        What should be the strategy, tasks and mechanism for this platform?

With regard to the constitution of the Commission, the following guidelines
should be adhered to: (i) the new Planning Commission must be set up by the
National Development Council (or the Inter-State Council); (ii) the non-ex
officio members of the Commission, i.e. its "expert" members, including the
Deputy Chairperson, must be decided on the basis of a consensus, reached
through consultations between the Centre and the States, and ratified by the
NDC (or ISC); (iii) while the Commission must be headed by the Prime
Minister as earlier, there must be as many Chief Ministers of States among
its ex officio members, as Central Ministers; (iv) there must always be at
least one Chief Minister from a North -Eastern State among the ex officio
members of the Commission; (v) both the Chief Minister from the North-East,
and the other Chief Ministers must be chosen on the basis of a policy of
rotation, so that every State gets a chance to be represented on the
Commission at some time; (vi) the non-ex officio members should have a
tenure of five years, or the life-span of the Central Government, whichever
is less; the ex officio members of the Commission from the Central
Government will naturally have a tenure which is co-terminus with that of
the Central Government; and the ex officio members consisting of State Chief
Ministers should have a tenure of two years each (to enable every State to
be represented without having to wait too long); (vi) the representation of
a State should not change even when there is a change in the State's
Government, which means that a new Chief Minister will represent the State
in such a case without the State Chief Minister's membership being
terminated;(vii) the full Commission including the ex officio members must
meet at least twice in a year, so that the membership of the State Chief
Ministers, given their shorter tenure proposed here, does not become a mere
formality without any significance.

The new Planning Commission must differ from its earlier avatar not just in
terms of its character and constitution, but also in terms of its focus,
i.e. the task to which it addresses itself. Macro-level target-setting for
growth and investment is not particularly meaningful in a world in which the
bulk of investment now occurs in the private sector. Besides, the mere
achievement of a high rate of GDP growth does not ensure that employment in
the economy will grow at a rate adequate to reduce the magnitude of
unemployment, under-employment and disguised unemployment, or to have any
impact on hunger and poverty. Growth alone in short is insufficient for
realizing the vision enshrined in the Directive Principles of State policy.
Hence the new Planning Commission, instead of being concerned with GDP
growth only, must focus directly on improving the conditions of life of the
bulk of the people within the shortest possible time. 

It must have a comprehensive Plan where the target is to reach quality
health-care to every Indian citizen; quality school education to every
Indian child; guaranteed employment (or, failing this, an adequate
unemployment allowance) to every individual; adequate nourishment to every
household; adequate support to every old-age person and person with
disability; proper sanitation and drinking water facilities to every family;
and adequate housing for all.

2.    Strategic & Perspective Planning

*        Should the Five Year Plan Cycle be continued? If so, its strengths
and weakness may be indicated. If not, alternatives may be suggested for the
medium term and long term.

Without any time frame, a plan means nothing. Hence the Five-Year Plan cycle
must be continued. Some targets may take longer than one Five-Year plan to
get realized. But the focus of the new Planning Commission must be on their
realization in a time-bound manner. And this new Commission must be both
transparent, and accountable to the NDC (or the ISC), and hence indirectly
to the people at large, with regard to any short-falls in meeting targets.

*        Should the Annual Plan discussion continue in the present format
between Centre and States?

Annual Plans are a part of the Five Year Plan and provide an excellent
opportunity to take stock of the progress made in each State towards
achieving the Five Year Plan Target. They must therefore be continued. For
Special Category States like Tripura, Annual Plan discussions are even more
essential for ensuring that adequate resources are made available to them to
meet their development needs.

3.    Innovation & Knowledge Hub

*        How should this proposed Innovation and Knowledge Hub Work for the
best interests of your State?

Since the new Planning Commission according to our perspective will have a
powerful role, all initiatives such as the Innovation and Knowledge Hub
should be brought under the overarching guidance of this new Planning
Commission instead of being independent competing agencies. "Planning" in
other words must also mean "planning of innovation and knowledge
production", so that it becomes useful for the "planning" of production of
goods and services as a whole. 

A point should be clarified here. Even though in our perspective the
Planning Commission is not concerned with the growth rate per se, but with
the material conditions for creating an India of free and equal citizens, it
will obviously have to grapple with issues of production, incentives to
producers, and the whole range of policies that impinge on production. Its
concern with these matters must be linked to its focus on providing a
universal basic minimum, and not derived from some abstract target-setting
exercise. 

For instance, the provision of adequate nutrition to everyone would
necessarily require a substantial effort with regard to food-grain
production and procurement, which in turn can be successful only if the
farmers are provided adequate support in the form of inputs, credit,
remunerative prices, and a procurement machinery. It would also require that
the consumers are provided adequate support through affordable issue prices
and the requisite amount of purchasing power. The Planning Commission should
be concerned with all this and hence with the entire sphere of production
and policy that impinges upon it. Likewise, it will be concerned with
ensuring the wherewithal for meeting basic needs in other sectors like
housing. Its planning exercise, for instance, can cover a dovetailing of
employment guarantee with the construction of school buildings; and so on.

All these activities require research, knowledge and innovation. There has
been in the more recent years, for example, a comparative neglect of
agricultural research in the country, because of which the reliance on
Multinational Agribusiness has increased greatly. This portends ill for the
future. The development of knowledge, supported by public funding, for the
needs of production in the country in accordance with social priorities, is
absolutely essential if "planning" is to be fulfill its purpose. 

Innovation and Knowledge development cannot merely be made State-specific.
Though States will no doubt have their own specific requirements which will
need attention, knowledge development must above all serve the needs of the
nation as a whole, and hence must be "planned" under the overarching
guidance of the new Planning Commission.

*        What are the expectations on the role and functions on the Think
Tank role of the New Institution?

The new Planning Commission will have to ensure that the trajectory of
development in the country is in keeping with our social goals. To be able
to do so, it must have a completely independent status. It must not become a
body that merely accepts as fait accompli the decisions of particular
Central Ministries. Though conflicts between this body and particular
ministries at the Centre and the States should be sought to be resolved
through dialogue and discussions and will in many cases, no doubt, get
resolved in this manner, in the event of such conflicts persisting, the
National Development Council (or the Inter State Council) will have to take
a final decision in the matter.

The Planning Commission cannot be merely a "think tank". It has to plan the
volume, sectoral distribution, and private-public split of infrastructural
investment. Leaving infrastructural investment to public-private
partnerships in which the public sector provides the resources and carries
the risks, while the private sector earns the bulk of the returns, will
undermine the Government's fiscal position, and hence thwart the prospects
of essential public investment being undertaken. Secondly, it has to plan
public investment as a whole and recommend appropriate ways of garnering
fiscal resources and of restructuring the public sector. Mere disinvestment
and privatization of public sector units, apart from breeding corruption,
are socially counter-productive, and even fiscally suboptimal. Thirdly, it
has to provide some set of indicative targets on how the structure of the
economy as a whole and the individual sectors and subsectors should evolve.
The new Body may suggest measures through which this will be achieved and
also suggest appropriate allocation of resources towards this end. Further,
it has to formulate policies through which some degree of industrial and
technological capacity is built up within the economy which in turn would
require withstanding the pressures exerted through the WTO, including via
the TRIPS agreement(and for this its role in providing overarching guidance
to the Innovation and Knowledge Hub becomes necessary). 

4.    Flow of funds

*        How should the fund flows for the Central Plan Assistance to the
States be restructured?

For quite some time now States have been demanding that the Union Government
should devolve 50% of its total revenue collections to the States to enable
them to meet their burgeoning fiscal needs. That demand stands. We shall
however confine ourselves below only to Central Plan Assistance. 

A significant proportion of Plan funds currently flows through line
Ministries under various Centrally Sponsored Schemes. These Centrally
Sponsored Schemes in turn have to be distinguished from Parliament-approved
programmes like the MGNREGS. The Central Government (a) has been in the
habit of unilaterally reducing its share and increasing the share of the
State Government in Centrally-Sponsored Schemes, often even against
overwhelming opinion expressed at the NDC; this is utterly arbitrary and
unreasonable. (b) Of late it has even sought to reduce the scale of the
MGNREGS, which would hurt the poor and the destitute people in rural India
as a whole, and be particularly harmful to a State like Tripura. Besides, it
is a terrible precedent for the democratic system in our country if a
Parliament-enacted Scheme is arbitrarily curtailed by the central executive,
acting entirely on its own, without going back to the Parliament.

We would therefore suggest that (a) the MGNREGS must be implemented in
letter and spirit exactly as the enactment by the Parliament had visualized.
(b) Even Schemes which the Centre has initiated on its own, and finances
entirely from its own resources, should not be truncated suddenly and
arbitrarily without the matter being raised at the NDC. And (c) any
alteration in a Scheme that is jointly funded by the Centre and the States
can occur only with the concurrence of the States.

All this is with regard to the existing Schemes or new Schemes once they
come into effect. But all future new Schemes whether fully financed by the
Centre or jointly funded by the Centre and the States must be discussed by
the Planning Commission and have its approval, in which case the voices of
the States can be heard, via the Commission, at the stage of the initiation
of the Scheme itself.

In addition, at least 30% of the Annual Plan assistance should flow as
untied funds, so that the States can take up and execute Projects based on
their felt needs, including the need to fill infrastructure gaps. Currently,
the only sources of untied funds are the SPA (Special Plan Assistance) and
SCA (Special Central Assistance). The flow of such funds needs to be greatly
expanded.




 

Issues specific to North East (not in Agenda)

1.    The growth in regional disparity in the country has been quite
striking, with the North-East lagging behind the rest of the country.This
has to be combated. For doing so, however, relying on private investment
alone is grossly inadequate. Public investment becomes a crucial instrument
for combating regional inequality. The new Planning Commission has to play
the role of consciously directing public investment towards the backward
regions, including in particular the North-East. 

2.    North Eastern States are economically under-developed with little
fiscal resources of their own. Their capacity to generate Plan resources
becomes even more restricted because of the  Finance Commission's not
recognizing that even though the North-Eastern States are small States, they
too have to maintain a minimum size of the administrative machinery, and
hence to devote their meager resources towards this end (which the Finance
Commission does not compensate them for). The new Planning Commission must
have a specific mandate to address the resource gap for State Plans in the
North-East.

3.    North Eastern States have an existing provision under NLCPR
(Non-Lapsable Pool of Central Resources) with funds pooled from the Central
Ministries which are mandated to spend 10% of their outlay on NE States. But
the 10% funds are not flowing to the North-east and, even where they are
coming, they are not being put to proper use because of the weak
administrative machineries of the concerned central ministries. The
government of India should allocate 50% of these funds directly to the
States so that they can spend them on projects in accordance with their
specific development needs. 

 

 

 

Central Committee

Communist Party of India (Marxist)

A.K. Gopalan Bhawan

27-29, Bhai Vir Singh Marg, Gole Market

New Delhi 110 001

 

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