Having scrapped the Planning Commission, what will be the impact if the Centre also suspends the five-year plans?
To access the World Bank’s IDA [International Development Association] funds a country must lay down its strategy for reducing poverty in a PRSP [Poverty Reduction Strategy Paper]. In India’s case, the plans were accepted to be the nationally developed and owned PRSP. We will be fine till the 12th Plan is on but
2017 onwards to continue receiving the $1-billion a year that we receive from the World Bank some PRSP will be needed. That will have to be looked into.
What is the downside of not having a Planning Commission?
The apprehension is that the Finance Ministry tends to be interested in finance and deficits, not development. Its primary role of managing finances on a day to day basis does not let it take long-term views.
Some of the jobs the Planning Commission did can be done by other bodies. For instance, evaluations and project appraisals. But the basic function of the Planning Commission was having a system-wide view of development interventions and being able to match with stated objectives of governance. A lot of things flow from that. In case of inter-ministerial disputes the Commission stepped in as it had both sides of the picture. Government works in silos and the Commission was a moderator. In its absence the silos are complete. Its most important function was not allocations but checks and balances. It was an independent voice. If a ministry said something the Commission could contradict. We have lost an independent voice.
I s the poverty-data issue resolved?
India’s poverty data is hugely outdated. The last BPL [Below Poverty Line] Census was done for the 9th five-year plan. We are right now in the 12th five-year plan. Many States are frustrated because at the end of the day without poverty data how do you ensure there is an equitable basis for allocations of funds. So, now States with good Statistical capacities are doing their own BPL Census. But States such as Uttar Pradesh, Bihar and Madhya Pradesh that have greater incidence of poverty are unable to do it. The Centre had submitted to the Supreme Court that it had put on hold the Tendulkar report on poverty. After that there has been no alternative. The UPA Government had appointed the Rangarajan Committee on Poverty. It submitted its report to the Prime Minister [Narendra Modi] but am not sure in the absence of the Planning Commission who is examining it or if it is being examined. Typically in the past these reports have overlapped so there has been no such gap in data.
How is the lack of poverty data affecting the poor?
If you ask today what is India’s official poverty estimate we don’t really know…I am not in a position to say what the estimate is. This is making a mockery of anti-poverty programmes. The absence of official poverty estimates impacts inter-state allocations of funds for anti-poverty programmes of various kinds as they are driven by poverty rates. Lots of things are tied to BPL cards. BPL identification is important as things stand there are Government schemes linked to BPL Status which is in desperate need to be updated. We can’t work with such an old list of BPL people. Lots of Government schemes are linked to BPL cards. The Central Government is just a financer. The delivery mechanism is in States. They set up institutions to channelise funds and deliver services.
The Planning Commission put its foot down so there is a poverty-based allocations formula for the existing schemes. But the question then is what happens for new schemes.
By when will we have updated data on the incidence of poverty in India?
Am not sure what the protocol now is on poverty data. Earlier Committees gave their recommendations on poverty estimates to the Planning Commission which examined them and submitted its recommendation to the Prime Minister who formally accepted or rejected it.
Is the sharp contraction of minus 4.5 per cent in the Index of Industrial Production (IIP) data for October attributable to statistical issues that have plagued the series in the past?
Compared to October 2013 October 2014 had 12 extra holidays which can be very disruptive. It is not that easy to adjust calendar months for working days in India as some parts of the country observe some religious holidays and others don’t. There are non-consistent holidays. A lot of Investment-bank research is using seasonally adjusted data for the IIP but am not sure that can be done. In the Indian context, unlike in the West, our festivals are based on the lunar calendar so there is always data mismatch. Before seasonally adjusting monthly data one needs to test for the stability of seasonal processes. At the NSC [National Statistics Commission], we applied 20 tests to national accounts data to identify which seasonality adjustments are okay and which not. We find it can be done for quarterly data yes but not monthly data. IIP cannot be seasonally adjusted.
What is holding up the release of the latest Religion Census data? When can we expect it?
The policy has been that we don’t ask about caste in the normal census. Since 1931 there has been no caste census in India because the goal earlier was to get away from caste and move to a casteless society. There was a demand from Parliament for the Caste Census to update the understanding of the Caste Structure of the country.
