Scrapping of Five-Year Plans was a bad idea

Move has proved very costly at a time when more and better planning is needed
five year economic plan
Had the path of planned economic development based on five-year plans had not been arbitrarily given up in August 2014 by the newly elected Modi regime, today India would be in the middle of the 13th Five-Year Plan (2017-22), the mid-term evaluation report of the 13th Plan would have just arrived and  preparations would be in full swing for formulating the 14th Five-Year Plan(2022-27).

All this was not to be as the planning process, initiated with a lot of hopes and by mobilising a lot of national talent soon after independence, was disrupted suddenly in 2014 with the dissolution of the Planning Commission (Yojana Ayog), announced without realisation of its wide and harmful implications for economic development and federal structure including centre-state relations.

The Planning Commission had worked together with state planning commissions (Rajya Yojana Ayog) which in turn were important for guiding district planning committees, and the entire planning structure was under the overall guidance of the National Development Council (Rashtriya Vikas Parishad). However the arbitrary decision to dissolve the Planning Commission in 2014 left the future of the State Planning Commissions and the National Development Council very unclear and uncertain.

 While some State Planning Commission continued to prepare an annual plan for some time, it was clear that the wider connections had been badly broken and this was at best a half-hearted gesture. For the entire country a lot of things became hazy and uncertain. While the 12th  Five Year Plan ( 2012-17) remained on paper, it was clear that its priorities will not get the same respect after the dissolution of the Planning Commission midway. With this economic development not just at the union level but also at the level of all states was adversely affected.

This became more evident just the next year when huge cuts were made in the union budget for some of the most important development and welfare schemes. While at the official level  this was sought to be justified by stating that the higher resource transfers to states based on the recommendations of the 14th Finance Commission will compensate for this, in reality the hike in state transfers was less than anticipated and, in any case, the important social/welfare sectors which suffered the cuts were not ready for such a disruptive decline at one go and needed more time to adjust.

The Planning Commission was precisely the institution which could have forewarned about this and possibly prevented the one-time big cuts, but it had ceased to exist by the last months of 2014. The absence of the Planning Commission was felt time and again as centre-state economic relations suffered several strains which belied the false claims of cooperative federalism, particularly after the introduction of GST and the slowing down of growth rate.

In fact while the adverse impact of some leading policy initiatives of the Modi regime such as demonetisation, GST and ill-planned lockdown have attracted a lot of criticism, enough attention has not yet been given to the harmful economic impacts of the sudden disruption of the planning process, scrapping of the five-year plans and abolition of the Planning Commission.

In fact the chances of some of the other disruptive actions could have been reduced, or at least the disruption unleashed by them could have been curtailed if the planning structure and processes had remained in place. The dismantling of the planning structure and processes has made it easier to ignore existing priorities while giving more room to the  unhindered and arbitrary play of crony capitalism and its leading players. The chances of checks and balanced being placed within the existing official processes have lessened, and the possibilities of different or dissenting views from within or outside the officialdom have reduced as well. The voices and concerns of state governments have less chances to be heard with the pushing aside of not just the Planning Commission but also the National Development Council and State Planning Commissions.

Very unfortunately this has happened at a time when there was need for more and better planning. This is of course partly because of the important, bigger and emerging challenges arising out of the accentuating economic crisis, increasing problems faced by farmers and workers and deepening strains on centre-state economic relations. But there are in fact even more important and deeper reasons why India as well as most other developing countries now need better, more comprehensive and in some senses perhaps also more sophisticated or complex planning exercises than before. This is particularly related to the increasingly important issue of climate change.

With the compelling need to reduce greenhouse gas emissions, the entire world and its various countries now have to contend with, in addition to the resource constraints they faced earlier, the additional issue of a limited carbon space within which they have to meet the needs of all their people. In the case of countries like India, where a large number of people are still deprived of their basic needs, the goods and services needed by them (more food, clothes, education and medical services etc. needed by poorer sections of society) have to be increased at a fast pace  at the same time as  greenhouse gas emissions have to be reduced. Clearly this needs more comprehensive and better planning.

A closely related aspect is that these two objectives (of reducing GHG emissions while increasingly meeting all needs of the poor within a shrinking carbon space) can be reconciled only in conditions of greater equality. Hence the need for equality is much greater in this phase of climate change, again enhancing the need for more and better planning. This is argued here mainly in the context of climate change, but with other almost equally important  environmental problems also becoming more serious, this line of reasoning calling for more equality and better planning is strengthened further.

Hence we face this very unfortunate reality of the planning processes and structure getting very weakened precisely at a time when there is much greater need for strengthening and improving them. In this context there is obviously a clear need not just for the revival of the Planning Commission but for the improvement and strengthening of the entire structure and processes of planning, with greater emphasis on decentralization, in a very important development country with a large population like India which increasingly faces bigger economic and environmental challenges than before.

*The writer is a freelance journalist who has been involved with several social movements.      




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