The Demolition of Planning Commission

By Chanchal Chauhan

 

An English poet once said, ‘Do something good or evil, at least you exist.’ The BJP-RSS political formation takes pleasure always in doing something evil and particularly, in demolition of some structures for advancing its political agenda, be it ancient Hanuman temple and Babri Masjid at Ayodhya in 1992 or the Planning Commission of India at the Centre now. The PM, Narendra Modi, on August 15, 2014 while addressing the nation from the ramparts of the Red Fort, declared the demolition of the ageing Planning Commission. The Commission at intervals had been made defunct by the Congress regimes also, but the present Government went a step further to announce its demolition.

The Commission was set up by a Resolution of the Government of India in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community. It was charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities. Jawaharlal Nehru was the first Chairman of the Planning Commission.

The Five-year Plans were drawn regularly from 1951 till 1965. After that the Commission began to falter. There were breaks for one reason or the other. Thus the planning process was disrupted and the Commission was almost defunct. After three Annual Plans between 1966 and 1969, the Fourth Five-year plan was started in 1969. The Eighth Plan could not take off in 1990 owing to the fast changing political situation at the Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies according to the dictates of the international finance capital that became a hegemonistic force at the global level and still continuing to be so.

For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries so as to make India self-reliant in every sphere. However, this objective was changed with the initiation of the neo-liberal policies in 1991 dictated by the World Bank and IMF regime that put pressure on our successive governments, whether under the Congress or the BJP leadership, to follow the new direction of privatisation and liberalisation so as to allow national and international monopolies to grow while doing away with all measures of social welfare and subsidies. Thus, with the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and selling all profitable public enterprises to the national and international corporates through ‘disinvestment’ and PPP (public-private-participation) has become the current thinking on planning in the country by the governments of the day.

The demolition of our Planning Commission is the end-result of this process. But how can any development take place without planning? Even a residential house cannot be built in cities without a sanctioned plan. So the PM had to announce that a new body, National Development and Reforms Commission or with some other name would be established for this purpose. But it is clear for any one to see that the structural changes are not going to change the direction of the neo-liberal policies as followed by the Planning Commission headed by the Manmohan, Montek team who served the interests of the World Bank-IMF regime. Even the structure, one can easily assume, will remain the same. Earlier the PM was the chairman of the commission, and with him was a core consisting of a vice chairman and eight members, the chosen few by the PM. After the defeat of the Congress, the whole team resigned on 26th May, 2014 and since then the Planning Commission became defunct.

In spite of the media hype on the ‘new’, the core structure of the new body will be on similar lines.. Reports galore that a small, handpicked, five-member think tank, which will draw its power and prestige from Prime Minister Narendra Modi's clear backing, is likely to be in place. The new panel will most likely be led in an executive capacity by the chosen few stooges of the World Bank and the IMF as were in the Planning Commission, they may be replaced by similar officials with free market economists such as Arvind Panagariya and some more similar members. Now, in place of Montek Singh Ahluwalia, who also had worked for the IMF, Arvind Panagariya, may be taken in the think tank. He has the same thinking of being supportive to the neo-liberal policies as Manmohan Singh and Montek Singh Ahluwalia followed. Arvind Panagariya has been the Chief Economist of the Asian Development Bank.  Like Manmohan Singh, Montek Singh and Raghuram Rajan, the RBI Governor, Arvind too worked for the World Bank, IMF, WTO, and UNCTAD in various capacities.  Thus, any one can see through the game that I had long back foretold in an article published on May 8, 2014 in some English dailies in which I had predicted Arvind Panagariya to replace Montek Singh Ahluwalia to serve the same interests of the international finance capital. On the pattern of the Planning Commission, the new body will also be formally chaired by the prime minister..

Thus the change is just in ‘name’ or the ‘signboard’, the functional structure will remain the same with similar personnel and similar aims and objectives to serve the same interests of the world capitalism at the cost of the poor masses of India.

As regards other members of the new body, experts familiar with wider Sangh Parivar thinking and support, most probably an RSS hardcore member are likely to be other members of the as-yet-unnamed advisory body. We may recall that economists such as Panagariya have been involved in advisory capacities with Narendra Modi's core team before the Modi-led BJP won the general election in May this year. Panagariya’s statements on the various economic issues show that he stands for the same policies of liberalisation and privatisation and entry of FDI even in retail that BJP opposed earlier during Congress rule. Like P. Chidambaram he also suggested to retain the World Bank man, Raghuram Rajan as RBI governor. Modi faithfully followed the advice to retain him.

It seems that while most thinking on the new panel's formation is over, two questions being addressed now are: first, the name of the think tank and, second, whether to accommodate at least partially a counterview on the size of the panel. A name distinct from China's Development and Reforms Commission is being sought.

However, some sources reveal that the think tank will have the mandate to co-opt experts from other domains. This will facilitate the body to allow more faithfuls of the World Bank and IMF regime as well as the RSS men in the new body.

 

While terms of reference of the new body haven't been fixed yet, broad guidelines have been decided. One immediate focus is likely to be the size of government budget, given the Kelkar committee's recommendation that the fiscal deficit-to-GDP ratio be brought down to 3% by 2017. The finance minister's deficit target for this fiscal year is 4.1%. Advice on government spending by keeping the Kelkar target in mind and devising economic and social sector strategies within that constraint is likely to be the think tank's first priority.  

 

The new panel, according to some sources, will be a strategic advisor, doing big thinking and thinking for the future, but even with the slogan of ‘new’ raised repeatedly by the PM, one may safely predict that the framework will remain the same as the new team will be in the core body representing the same class interests of the corporate sector and world capitalism as did the Manmohan-Montek team. The Rail budget and general budget and the words of the PM on ‘hard decisions’ bear witness to this policy framework.

 

As for the existing staff of the Planning Commission, most staffers are on deputation and the new policy may be to pick and choose on the basis of their ideological commitment. The commission's core staff strength is less than 100 and can follow the dictates of the new body that will be similar at the policy level.

 Sent to INFA on 20-8-2014 but could not be featured by it for reasons unknown