Indian Economy, 5th edition (13 page)

(iii)
Employment Generation:
Providing employment to the poor has been the best tool of economics to alleviate poverty. Thus, this objective of planning in India comes naturally once it commit0ted itself to alleviate poverty. Employment generation in India has been, therefore, part and parcel of the objective of poverty alleviation in India. General programmes and schemes have been launched by the Governments from time to time in this direction, some based on the wage employments still, others based on self-employment.

(iv)
Controlling Economic Inequality:
There were visible economic inequalities in India at the inter-personal as well as at the intra-personal levels. Economic planning as a tool of checking all kinds of economic disparities and inequalities was an accepted idea by the time India started planning.
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To fulfill this objective of planning the Governments have enacted highly innovative economic policies at times even inviting a tussle with regard to the Fundamental Rights Constitution.

Though Indian Planning has socioeconomic objectives to fulfill, only economic planning was made a part of the planning process (technically speaking) and social planning (better called social engineering) was left to the political process. That is why reservation in government jobs and admissions in premier academic institutions, land reforms, promoting inter-caste marriages, etc. do not fall under the purview of the Planning Commission.

(v)
Self-reliance:
During the 1930s and 1940s, there was an ardent desire among the nationalists, capitalists and the NPC for making the economy self-reliant in every field of the economic sphere. Self-reliance was defined not as autarchy but as an effort to strike against a subordinate position in the world economy. As Jawaharlal Nehru asserted: self-reliance, “does not exclude international trade, which should be encouraged but with a view to avoid economic imperialism.”
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India still strives for self-reliance in every field of economy as well as serving the realities of higher interdependence in the globalising world post-World Trade Organisation (WTO).

(vi)
Modernisation:
Modernising the traditional economy was set as a foremost objective of the planning. Specially, the agriculture sector of the economy needed an immediate inclusion of modern methods and techniques of farming dairying, etc. Similarly, in education too, India needs to go for inclusion of modern education system.

India did not miss the chance of accepting the importance of modern science and technology. As the economy had selected industry as its prime moving force (PMF), it was essential to adopt the changing dimensions of science and technology.

The major objectives of planning in India are not only broad but open-ended. That is why it hardly needs any change and modification in them with the changing times. It means, after the completion of one plan the objectives for the new plan are automatically set. Coming to the composition of the objectives, we may confidently conclude that all the aspirations of the Preamble,
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the Directive Principles of the State Policy,
39
the Fundamental Duties and the Fundamental Rights have got their due place and weightage. All the aspirations of the nationalists and the freedom fighters look resonating in the very soul of the Indian planning system.

The objective of planning in India was so broad a term that gradually it encompassed the entire sphere of administration excluding only defence
and foreign affairs
.
The objectives of planning tremendously evolved and got cemented together once the functions of the Planning Commission were announced by the Government in 1950 itself and further expanded in 2002 (
which we will see in the next sub-title
).

PLANNING COMMISSION

Once the National Planning Committee published its Report (1949) and there was a firm inclusion of the need for ‘Economic and Social Planning’
40
in the Constitution, the stage was set for the formal launching of planning in the country. Though the economy was run on the principles of planning very much after the independence itself
41
it was in a piecemeal manner only. For formal planning to begin, for the whole economy at national level, there was a need for a permanent expert body which could take over the responsibility of the whole gamut of planning i.e. plan formation, resource aspects, implementation and review—as planning is a technical
42
matter. Thus, in March 1950
43
the Planning Commission (PC) was set up by the Government by Cabinet Resolution (without resorting to legislation). Important details regarding the composition, legal status, etc. of the PC are as under:

(i)
An
extra-constitutional
(i.e. non-constitutional) and
non-statutory
body (though planning originates from the Constitution there is no reference to the PC in it).

(ii)
An
advisory body
to the Government of India on an array of issues of economic development.

(iii)
A ‘think tank’ on economic development with the Prime Minister as its ex-officio Chairman and with the provision or a Deputy Chairman.
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The main function of the Deputy Chairman is to
co-ordinate
the work of the Commission.
45

(iv)
Has an open provision for the number of its membership (as many area experts are required by the particular proposed period of planning) other than six Union Cabinet Ministers as its
ex-officio members
46
and a Member Secretary. The Minister of Planning is already an ex-officio member of the PC.
47

(v)
An
autonomous body
entitled to form its own views on important issues and place them before the governments. It works closely with the Union and State cabinets and has full knowledge of their policies.
48

(vi)
Is invariably
consulted
on changes proposed in social and economic policies. To ensure free and full exchange of ideas, the P.C has established a
convention
that it will not give publicity to differences of views between the Commission and the Union and State Governments.
48

(vii)
Linked
with the Union Cabinet at the secretariat level. The PC is part of the Cabinet organisation and the ‘demand for grants’ for it is included in the budget demand for the Cabinet Secretariat.
48

(viii)
Seated at the ‘Yojana Bhavan’, the Commission has a staff of Secretaries and Advisers and also a research organisation.
48

(ix)
The PC is a
technical body
with experts and professionals coming from an array of specific areas as per the need of planning of the concerned period.(see Reference 42).

(x)
The Commission has
executive powers.
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Functions of the PC

Though the PC was set up with a definite purpose of planning, nobody knew that it would extend its functions over the entire spectrum of administration in the country. It was described as the ‘economic Cabinet of the country as a whole’ even encroaching upon the constitutional body like the finance commission
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and not being accountable to the parliament.
51
Through time it built up a heavy bureaucratic organisation
52
which led even Nehru himself to observe— “The Commission which was a small body of serious thinkers has turned into a government department complete with a crowd of secretaries, directors and of course a big building.”
53

Though the functions of the PC were extended to include timely changes in the planning needs (in the reforms era), its functions
were announced by the same government order which did set up the Planning Commission, itself. The order
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says:

“The Planning Commission will—

(i)
Make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of those resources as are found to be deficient in relation to the nation’s requirements;

(ii)
Formulate a plan for the most effective and balanced utilisation of the country’s resources;

(iii)
On a determination of priorities, define the stages in which the plan should be carried out and propose the allocation of resources for the due completion of each stage;

(iv)
Indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation, should be established for the successful execution of the plan;

(v)
Determine the nature of the machinery which will be necessary for securing the successful implementation of each stage of the plan in all its aspects;

(vi)
Appraise from time to time the progress achieved in the execution of each stage of the Plan and recommend the adjustments of policy and measures that such appraisal may show to be necessary; and

(vii)
Make such interim or ancillary recommendations as appear to be appropriate either for facilitating the discharge of the duties assigned to it; or on a consideration of the prevailing economic conditions, current policies, measures and development programmes; or on an examination of such specific problems as may be referred to it for advice by Central or State Governments.”

With the commencement of the Tenth Plan (2002–07), the Government handed over
two new functions
to the planning commission in 2002, namely-

(i)
To monitor the plan implementation with special reference to the process of ‘economic reforms’ with the help, of the steering committees.

It should be noted here that once the process of economic reforms was initiated in the country (early 1990s) there was a diminishing role proposed for the state in the economy in some areas and increased role for it in some other areas. The re-definition of the state’s role in the economy (though it was the contemporary thinking world wide) made most of the experts and the business community to conclude as if there will be no role for planning in the economy. The New Economic Policy (NEP) of 1991–92 was a prima-facie proposal for the expansion of the market economy in the country. But it was not the case altogether. The planning has not become irrelevant though it needed to search for a new orientation. And it was highly essential that the process of planning keeps its relevance
to the bigger and the broader process of economic reforms. This particular new function of the PC must be seen in this light.

(ii)
To monitor the progress of various Central Ministries. It should be noted here that for the first time, the PC went to set the ‘monitorable targets’ for ten areas indicating development. The Central Ministries have been linked to these monitorable targets. The timely performances of the Ministries are now monitored by the PC as per its new fuction.

With the inclusion of the above-mentioned two functions in the existing functions (which were already very broad), the PC has emerged as a real ‘supercabinet’. Since it is basically the Deputy-Chairman who officiates the general meetings of the commission, he has a high-level say
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in articulating the direction and the nature of the economic policies. Through the first new function it articulates the future dimensions of the economic reforms and through the second new function, it influences the works of the various Ministries—ultimately it seems as if the PC has been able to emerge as the real think-tank of development in the country.
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The PC has also been able to influence the states economic policies since 2002 in a great way. Though the PC today does not make the state plans
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it is able to influence the overall economic policies of the states. It has been possible due to the setting of ‘monitorable targets’ for states for the same development indicators/areas as has been set for the Centre.
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The states are liable for being monitored by the PC concerning their performances regarding these monitorable targets. This way the Central Government has started having its say over the state governments via the new functions of the PC.

We may conclude that the PC has been able to unify not only the various economic policies of the centre but also those of the states with the help of these two new functions given to it. Earlier, there had always been a lack of congruence among the policies of the various central ministries and the ideas articulated by the PC.

NATIONAL DEVELOPMENT COUNCIL

The National Development Council (NDC) was set up in August 1952, by a Resolution
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issued from the cabinet secretariat. The first Plan recommended its formation with a very concise and suitable observation
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about it:

“In a country of the size of India where the states have under the constitution full autonomy within their own sphere of duties, it is necessary to have a forum such as a National Development Council at which, from time to time, the Prime Minister of India and the Chief Ministers of the states can review the working of the plan and of its various aspects.”

There were some strong reasons why the NDC was set up which may be seen as follows:

(i)
The Central Plans were to be launched in the states and the UTs with the participation of the state level personnel. The as the Planning Commission was not provided with its own implementation staff (though the PC was given the responsibility of plan implementation) for this purpose. Therefore, the consent and co-operation of these federal units was a must.

(ii)
Economic Planning as a concept had its origin in the centralised system (i.e. Soviet Union). For India, to democratise/decentralise the very process of planning was not a lesser task/challenge than promoting development itself. Indian planning is rightly said to be a process of trial and error in striking a balance between liberty and progress, central control and private initiative and national planning with local authority.
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