Restructure the Planning Commission: Yashwant Sinha
New Delhi, December 19, 2013
"The Planning Commission is the biggest obstacle in the
path of federalism. It should be restructured to do
perspective planning and implementation without being
empowered to micro manage the states' financing and
functioning, which is the task of the Finance Ministry",
said opposition leader, Yashwant Sinha.
Mr Sinha was speaking at the 12th CUTS 30th Anniversary
Thought Leadership Lecture on December 18, 2013, in New
Delhi, on the topic "Fiscal Federalism: The Unequal
Balance". (www.cuts-international.org/30thanniversarylectures).
Mr Sinha added that India is a union of states and not a
federation, for which several provisions in the
Constitution exist, which provides a unitary character.
"We are gradually moving towards federalism considering
the fact that many regional parties are ruling in
states".
Mr. Pradeep S Mehta, Secretary General, CUTS, welcomed
the guests by questioning the premise if the federalism
practiced in India was true federalism. He mentioned
that the Constitution of India does not refer to the
role of Centre/Central Government, but to the Union.
Chairing the lecture event, Mr. N. K. Singh, MP, set the
tone by stating that the issue was contemporary as well
as complex, and sets up a challenge between economic
understanding of scarcity of resources and political
realities.
He mentioned that federal practices have not kept pace
with changing dynamics and economic realities of the
country. There was no credible and viable mechanism at
present, for coordination between states and central
government. "The Interstate Council is defunct".
In his speech, Mr. Sinha touched upon the issues of
differences between federalism and decentralisation, the
changing political scenario with the emergence of
regional political parties, role and utility of Planning
Commission of India, the pending Goods and Services Tax,
and the core issue of centre-state and inter-state
relationship which is at the heart of the subject of
fiscal federalism.
He noted that the Planning Commission was created by an
executive order and has been continuing without any
constitutional or statutory backing, but is playing a
significant role in devolution of funds to states.
Mr Sinha was critical of the role of the Planning
Commission in reviewing the gross budgetary support and
the lack of accountability of the Planning Commission to
the Parliament.
In addition, he raised concerns about the complex
constitutional amendment bill on Goods and Service Tax
wherein the potential problems of central government in
its implementation, have not been adequately
highlighted.
Cooperative federalism is the way forward
Mr. Sinha further mentioned that what India truly needed
was cooperative federalism i.e. co-option of state
governments in policy making, and need for greater
cooperation between central and state governments in
critical areas, including security.
The already existing empowered committee of finance
ministers of various state governments on GST has been a
successful experiment in this regard. The same approach
can be taken for other subjects as well, such as a
committee of state home ministers to deal with security
matters. On the issue of performance on fiscal deficit,
he was of the opinion that states have performed much
better than the central government.
Dr. Bhal Chandra Mungekar, MP, in his speech, said that
India is a natural federation considering the plurality
of cultures, language, religion etc. He stressed upon
the need to restructure the FRBM Act and the need for
more autonomy of the states. He agreed with most of what
Mr Sinha said.
Both parliamentarians Dr Mungekar and Mr N. K. Singh,
having been members of the Planning Commission, too
expressed their reservations about the functioning of
the Plan body and suggested that it should be wound up.
The addresses were followed by a lively question and
answer session. The audience included parliamentarians,
Messrs V.P. Singh and Rangasayee Ramkrishna, amongst
other eminent citizens, economists and media personnel.
On a query of the steps needed to bring back India to
growth trajectory, Mr. Sinha responded that government
should create an environment to enable reduction in
interest rates and ensure speedy clearances of pending
projects, which are currently in the range of Rs.
138,000 crores.
Mr Mehta suggested that as a seed to cooperative
federalism, mainstream political parties should also
explore a grand coalition in forming a stable
government, such as in Delhi State, as practiced in
Germany, whereby the legislature can function without
going in for fresh elections.
The meeting also issued a fresh call for scrapping the
APMC Act, and to establish an empowered committee of
state agriculture ministers to review the same.
The panel wholeheartedly echoed the need of cooperative
federalism in India, emphasised that the same was
feasible, and the need to rechristen the Planning
Commission of India, as Department of Planning and
Cooperation, as it has outlived its utility in its
present form
For further information please contact:
Amol Kulkarni, +9109929642313 ,
amk@cuts.org