Planning institution: Need to Think national and act local

ECONOMY/ GOVERNANCE

Topic: General Studies 3:

• Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 

Planning institution: Need to Think national and act local

In the event of crisis created by the pandemic, an all-round plan for recovery is much needed.

However, there is a general criticism that Planning bodies (Erstwhile Planning Commission and present NITI Aayog) has failed to produce all-round development of India’s economy.

Some of the drawbacks/criticisms of National Planning Body

• Short-termism in policymaking: In electoral democracies like India, governments change in shorter spans whereas national plans need consistent action over decades. 

• The disruption caused due to absence of long-term planning is not faced in the case of China, that has been one of the reason for its rapid rise.
• Compromised Independence: Lack of constitutional status makes the planning body bend to the will of elected governments thus derailing long term plans
• Failure to address the constitutional relationship between the States and Centre – States who are self-sufficient have often questioned the value of guidance (one-size-fits-all approach) from National planning bodies 
• Failure to synergise with Finance Commission that determines the fund allocation of central resources amongst States.
• Lack of Holistic plans/policies: Planning bodies must assist in achieving not just faster GDP growth, but also more socially inclusive, and more environmentally sustainable growth. 
• Lack of insights into systems structures – In the era of Globalisation, the production factors keeps moving (out of India) to lower cost sources. Neglecting this systemic factors leads to ineffective policies.
• Planning is weak when planners do not have the powers to allocate money for national priorities (which NITI Aayog does not have)

Way Ahead

• Devising a good developmental model in which inequality, societal and environmental forces are integrated into growth process
• Decentralised Solutions– Planning bodies need to promote local solutions to national problems, taking into account the unique conditions of the region.
• If fund allocation powers are granted to NITI Aayog then it must be backed by a constitutional charter, and accountable to Parliament.

Connecting the dots:

• National planning bodies must be a force for persuasion, not control centre. Elaborate.
• Three-year action plan of NITI Aayog and the progress made.
• Why did the government adopt Five Year Planning strategy during the early days of Independence? Why was it discontinued after 12th FYP?