A paradigm shift in India's development approach : A boon or a bane
- Part 2 -

Dr S Benjamin Nattar *

The new body is not just a change in the nomenclature. Except for its nature as a non-Constitutional and non-Statutory body like the Planning Commission, in every other way the Aayog appears to be different. The Aayog basically incorporates broad philosophical than economic issues. It assures of designing strategic and long term policy and programme framework and initiatives and monitoring their progress and efficiency. Only in one place, the word 'plan' appears in its functions, 'to develop mechanism to formulate credible plans at the village level and aggregate these progressively at higher levels of government'.

Special attention would be provided for those that may be at risk of not benefiting adequately from economic progress. It promises to undertake activities necessary for realising the objectives of national developmental agenda. The approach adopted by the new body is 'Bottom-up' model of development. Plans are to be initiated at the village (Gram) level and consolidated at the district and state level, while the final consideration and approval will be at the Central government level.

Funds may be allotted by the Finance ministry for the specific projects. It would be primarily a think-tank mechanism offering necessary inputs for planning and development. Its functions are still evolving and continue to be modified. It appears to be everywhere but found nowhere. Teachers of Political Science are still unaware of the functions and activities of NITI Aayog. On the contrary, Planning Commission had a clear cut functions, activities, achievements and of course failures in certain fronts. Despite the criticism by the state chief ministers, fund was allotted to states under 'plan' head.

Bottom-up model of development is definitely an ideal model of development in an ideal socio-political environment. This approach will work in states with long years of experience in development, transparency and accountability in administration at the grassroots. Kerala has been very successful in this endeavour as they had long years of planning at the village level. But in many other states especially the North Eastern states, adoption of this approach is highly doubtful.

For years they had been systematised to follow a routine set by Planning Commission with an assured fund. Development in specific areas did take place all over India. Plans formulated by the Commission were synchronised with the state plans. Moreover, the village level administration does not have the required technical and specialised expertise for preparation of plans. NITI Aayog till date seems to have not allotted any fund nor is there any replacement for fund allotment to states. For example, as reported in the media, Chief Ministers of North Eastern states have criticised the abolishing of Planning Commission.

"All the NE States are facing problems of money after abolishing of Planning Commission and forming NITI Aayog. Every state is now losing money because it is not clear how the plans would be finalised and implemented. All the states in the region were facing crisis of funds in implementing projects" said TR Zeliang, Nagaland Chief Minister. During the time of Planning Commission, there was scope for discussion between the state government and the Commission for finalising the plan outlay, but this scope has faded away.

"For the last 28 months after NITI Aayog was formed, there has been no discussion between it and Tripura government regarding planning. The state was losing over Rs 1800 crore per year after formation of the Aayog" (The Sangai Express Sept 21, 2016). This is the situation in almost all the states. States which were demanding the abolition of the Planning Commission, themselves face the huge loss as result of the abolition of the commission.

Another step taken by the Centre is to abolish the 'plan' money, as often the centre, becomes wary of state governments diverting 'plan' money for 'non-plan' expenditure. The present government, as part of their 'Perform-Reform-Transform', has taken steps to merge these two. Henceforth, there will be no more 'plan' money. Fund will flow to states for centrally sponsored schemes and all other grants will be allotted to the states on the basis of Finance Commission award. This effectively makes planning a redundant exercise as the resources for plan is unlikely to be granted in this present dispensation.

The new approach definitely has its positive and negative impact. Any institutional and functional change for better economic development is definitely welcome. Abolition of the Planning Commission for ideological and political reasons may not be in national interest. One understands that this Commission was a product of national necessity at the time of independence. It would be wrong to assume that the Commission has outlived its purpose and not able to address the changing needs of the new economic environment in India and the world.

It is not just that the commission is abolished, but together with it national planning, state planning, state planning departments, and even district and metropolitan planning boards set up by the 73rd Constitutional amendment etc, all face the threat of their extinction. The abolition of 'plan' money might tempt states to divert the 'revenue' expenditure fund meant for salary purpose to 'capital' expenditure, thus the salaries of Government employees may be the biggest casualty.

North Eastern states and Jammu and Kashmir, earlier placed under special category states, have lost the status and therefore a heavy burden is levied on them to execute any project. It is, however reported by the NITI Aayog officials that even though 'special category states' has been abolished, NE states and Himalayan states are 'still given funds in the 90:10 ratio'. They say that the process of development gives the state government an opportunity to decide their own plans.

But the fear is that how long the fund will be given in this ratio and whether there is surety of fund sanction from the centre for the state plans and projects. Even the latest move of the Government to demonetise 1000 and 500 rupee currency might serve the goal of curbing black and fake money. But it has adversely affected the economy in the present.

Innovative measures like 'Make in India', 'Start up', 'Swaach Bharat', 'Act East Policy' have yielded certain positive results. Private enterprises have boomed in the new environment. Foreign investments have increased. India's position as industrial destination has gone up. Employment opportunities have increased, as noticed in placement interviews held in educational institutes across the country.

The new recruits are happy to be employed, but under heavy work pressure. Wealth creation seems to be the main focus of all stakeholders. But the question is all at what costs. It has been asserted by many economists that Indian economy was able to withstand the world economic recession, because the fundamentals of our economy was strong.

Today we are able to move forward because of the strong base laid by the founding fathers of Indian economy, under the former system. What is to be done in the present is to promote a healthy synthesis between Private and Public sectors, under proper plans formulated and executed, not necessarily by Planning Commission, but even by the new body NITI Aayog.

If not, public undertakings, road and rail projects and public utility services might suffer as sufficient fund, allotted earlier by the Planning Commission, might be stopped. Taking advantage of the failure of the Public sector, private sectors will try to fill in the vacuum created by the former. Unrestricted capitalist model of development will become the policy of the government. Establishment of socialist pattern of society as visualised by the Constitution seems to be a far cry.

All in all, the nation seems to be heading towards a neo-liberal capitalist state. The ultimate victim will be the hapless common Indian. The social safety measures introduced by the Government may be a small relief. But the path towards development becomes murkier day by day. Only time has the answer to the myriad problems the nation faces.

Concluded....