AMONG many radical-seeming acts of Narendra Modi, the newly elected Indian prime minister, is his decision to disband the Indian Planning Commission. To most free-marketers and anti-statists, the Indian Planning Commission is a symbol of state-led economic planning in neoliberal times when the market is god.
This anti-Commission narrative finds considerable space in the local and international financial press. Ironically, however, the beginnings of the Commission can be traced to the Bombay plan drafted by a group of eight top Indian businessmen, including Birla and Tata, the titans of the Indian business world. The plan, while envisioning the doubling of per capita income in 15 years alongside the minimum standard of living, also advocated an all-powerful role for the state in economic planning. This plan is widely believed to be the inspiration behind the Indian Planning Commission formed in 1950.
In the following decade, the Commission was the intellectual powerhouse behind framing five-year plans and shaping the broader contours of economic policy in India. Over time, however, the Commission, while retaining its state-led role, also opened up to notions of robust private sector development and public-private partnerships. Yet this gradual transformation seems too slow for a fast-reforming prime minister.
Like its Indian counterpart, the Pakistan Planning Commission (PPC), formed in 1954, also requires a shake-up in the way it conceives its role in a largely deregulated market in Pakistan. Throughout its existence it has chiefly concerned itself with devising five-year plans and offering economic advice to the government of the day. In the mid-1990s, however, the five-year plans were discarded in favour of medium-term frameworks.
The Planning Commission’s role needs to be recast in a deregulated market.
The PPC is hobbled by problems of identity and mission in changed times. This has coincided with a gradual erosion of its historically deep pool of expertise, with top positions either being regularly resigned or lying vacant for considerable periods, adding to the impression of drift. To some extent, this drift has been arrested under Ahsan Iqbal, minister for planning and development and deputy chairman of the PPC. One product of this is the new Vision 25 strategy. While this measure constitutes a good start, the PPC has a long way to go before it recovers its founding purpose and makes itself relevant to the country’s rapidly changing economic universe.
The PPC also needs to grapple with the implications of the 18th Amendment and its effects on the future of economic planning in Pakistan, for this amendment has devolved considerable economic policymaking power to the provinces. (One of the reasons cited for dissolution of the Indian Planning Commission was the devolution of planning to the state level.)
It is thus incumbent upon the PPC to reconfigure its role in a framework in which the provincial planning departments have acquired great salience. At the same time, it must remain cognizant of the macro-economic challenges facing the country and the role it must play in shaping an appropriate intellectual response. These challenges are further complicated by gradual migration of the PPC’s once mighty powers to the finance ministry, leaving the Commission with only the planning and management of public-sector development programmes which grow and shrink in line with the urgent cash requirements of other programmes and institutions.
The PPC is also handicapped by a perennial turf war, characterised by well-connected bureaucrats dominating the upper tiers of the Commission while disdaining or crowding out competent advice and help from outside the ranks of bureaucracy. This turf war has seen the PPC’s competent layers depleted as well as its role undermined. In short, the PPC today is a pale shadow of what it used to be in its glory days of the ’60s and ’70s when it was staffed with capable and competent staff at all levels, who had open-ended access to high-quality outside advice as well.
These shortcomings can be redressed with a revamped recruitment strategy aimed at attracting new and fresh talent. Another option could be the PPC transforming itself into a think tank composed of high calibre economists and specialists from other policy disciplines, pretty much along the lines of a new, revamped Indian Planning Commission.
However, the leadership for such a revamp should come from the prime minister himself who is the head of the PPC. This can begin with him and his economic team demonstrating the willingness to consider reform ideas being canvassed by various quarters. The revamped PPC, with fresh talent infused, should not be shy of speaking its mind and pushing well-considered and bold solutions irrespective of the government in office.
The writer is an Islamabad-based development consultant and policy analyst.
Published in Dawn, October 12th, 2014
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