Burial of Planning Commission # Encouraging Competitive Federalism, Ending Balanced Development

One of the first moves of the Modi government in 2015 was to replace the 64-year old Planning Commission with the National Institution for Transforming India (NITI) Ayog. This is a clear indicator that Prime Minister Modi has no compunctions whatsoever in completely disassociating from the very idea of social welfare and planned and balanced development as the responsibility of the Government.

Over the past years, the institution of the Planning Commission had increasingly been losing credibility - precisely because of the growing tendency of the Government to back off from social responsibilities and peoples’ welfare. In 2012 for instance, the Planning Commission was rightly condemned for spending some Rs. 35 lakh to renovate two office toilets, at a time when it suggested that citizens who spent Rs. 27 or more a day were not poor. However now, this step has ended whatever role the Planning Commission could play in allocating resources for the public sector, for welfare schemes, and for ensuring balanced economic and social development across different regions and states.

What we are seeing is a very disturbing trend in which the very Planning process itself is been severely compromised. The idea of ‘planning’ is intrinsically linked with notions of ensuring balanced development across states, keeping in mind social needs of people, and regional specificities. Doing away with the Planning Commission and bringing in its place a centralised ‘think-tank’ is bound to have long-term and deep repercussions for Indian society and polity. To begin with, with the setting up of the NITI Ayog, the planning and decision-making process has been deprived of heterogeneity of ideas. By all reports, all the orientation and policy-making powers in the NITI Ayog will be vested with a group of full-time members answerable to the Prime Minister and the PMO. In other words, there will be little space for varied voices and concerns in the planning process. Modi’s rhetoric of wanting to do away with ‘One Size Fit All’ in the planning process, is actually an attempt to put in place a model of ‘One Idea Pushed on All’ - the idea of free market and privatization. This will also inevitably dilute the already inadequate schemes for peoples’ welfare.

Moreover, the Modi government itself claims that the idea of the NITI Ayog is linked with the idea of ‘cooperative’ as well as ‘competitive’ federalism. This will surely foster a disastrous ‘competition’ between the states to attract investment through all means possible, including competitive sops, tax breaks, cheap land and relaxed labour laws to attract corporations. In other words, this will be a rush to the bottom so far as peoples’ livelihoods, their control over land and labour rights are concerned. There are also no concrete indications that the NITI Ayog will actually provide more space for states to have a say in the allocation of resources. Allocations to the states will actually be decided by the Finance Ministry, making the states subject to the political whims of the Central government.

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