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A Tale of Two Commissions and the Missing Links
There have been several missing links in the recent debate on the future of the Planning and Finance Commissions. First, it is not clear whether the debate was more about the future of planning or about the future of the Planning Commission. How do the proposals for institutional reform fix the problems relating to the process of planning and implementation? Second, there are emerging new realities of economic management that the new institution has to grasp and address, requiring new skills and, perhaps, a new set of instruments. Third, both the commissions operate in a multilevel context, namely, union, states and local bodies. Institutional reform has to be contextualised to multilevel processes.
The author is grateful to M Govinda Rao for advice and to Deepak Narain for valuable assistance. This is an edited version of the presidential address delivered on 27 December 2014 at the 97th annual conference of the Indian Economic Association held at Udaipur.
The subject of this article relates to a tale of two commissions, namely, the Planning Commission and the Finance Commission. The future of the two commissions has been a subject matter of intense debate in policymaking circles.1 I do not know whether I can describe the current situation in this regard as “It was the best of times. It was the worst of times.” Perhaps, best for one and worst for the other. But we are surely living through what the Chinese call “interesting times”. Significant institutional aspects of economic management are under review and fundamental changes with long-term consequences are under contemplation. However, there have been significant missing links in the debate on the two commissions and my intention here is to flag the relevant issues in this regard.2
I will first recall briefly the differing origins of the Planning Commission and Finance Commission and narrate the landmarks in their evolution. This will be followed by an exploration of the observed linkages between the two commissions. After making a brief mention about the current debate, I argue that there have been several missing links in the recent debate on the future of both the Planning and Finance Commissions. First, it is not clear whether the debate has been more about the future of planning or whether it is about the future of the Planning Commission. In fact, there are several issues relating to how we have planned and implemented our plans so far. How do the current proposals for institutional reform address fixing the problems relating to the process of planning and implementation? Second, there are emerging new realities of economic management that the proposed institution or institutions have to grasp and address, requiring new skills and, perhaps, a new set of instruments. Third, both the commissions operate in a multilevel context, namely, union, states and local bodies. Proposals for replacing the Planning Commission or expanding the scope of the Finance Commission have to be contextualised to multilevel processes.
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