Move to scrap Planning Commission raises Constitutional questions

Updated - December 04, 2021 11:36 pm IST

Published - August 17, 2014 02:36 am IST - NEW DELHI:

Prime Minister Narendra Modi’s decision to scrap the Planning Commission has raised administrative and Constitutional questions that the Centre will have to address in the coming days.

The first of these is what happens to the ongoing 12th Five Year Plan? Will this Plan, which was adopted by the National Development Council (NDC) that comprises not only the Centre but also States, including Gujarat, be junked or be allowed to run its course till 2017?

“The 12th Plan is an ideologically-neutral, NDC-approved, growth policy document with inclusion and sustainability as its pillars and technically the Centre cannot on its own decide to junk it,” a high-level source said.

Second, since indications are that the role of making plan allocations to States for development spending will be transferred to the Finance Ministry, there are likely to be implications of this for India’s federal system.

Will the States, especially those governed by the Opposition parties, readily accept allocations from the Union Finance Ministry is the question, says Y.K. Alagh, who was Planning Minister in the Deve Gowda government, when contacted by The Hindu .

The Commission made these annual allocations to them under Article 282 of the Constitution following discussions with each of the States at its Yojana Bhawan office in Delhi every year. “At present, the Finance Ministry does not have the expertise or capacity to decide fresh allocations for States and Ministries at the Centre and more importantly over time it could gain too much power with such a role,” said Abjijit Sen, a member of the last Planning Commission.

Though differences between it and the State governments cropped up often at these discussions, there is not a single case of a dispute remaining unresolved. “Despite the differences, there is not a single case of a State government in over 60 years ever having rejected an annual plan approved for it by the Commission,” Mr. Alagh said. “That’s because the Commission wasn’t just of the government of India but of both States and the Centre.”

In his Independence Day speech on Friday, Mr. Modi announced plans to replace the Planning Commission with a new institution that will have “a new body, soul, thinking, direction and faith”. This new institution would be powered by creative thinking, public-private partnership, optimum utilisation of resources, and the utilisation of youth power, Mr. Modi said, adding that it would empower the federal structure of India.

Mr. Sen also pointed out that with no “buffer” of the Commission’s Deputy Chairperson, the Prime Minister will have to directly respond to demands for allocations from his Cabinet colleagues and States. “Demands are normally raised for three times of what can be allocated and so it helps to be able to divert them to the DCH,” he said.

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