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?
