The draft five year policy document would be placed before full Planning Commission to be chaired by Prime Minister Manmohan Singh on Saturday.
"The Central government should design the programmes in a manner that gives maximum flexibility to states. We shouldn't, in my view, have rigid guidelines. We are trying to bring that flexibility in the 12th Plan," Commission's Deputy Chairman Montek Singh Ahluwalia said while addressing at Emerging Kerala Investors Summit here.
However, he did not seem to be in favour of giving freedom to states to borrow without the permission of the Central government.
"In a way, we are in a common currency area where states have their own fiscal budget but unlike euro zone, they are not allowed to borrow beyond a level. If we had that freedom, only God knows what the consequences would have been. I don't think that is going to change," he said.
Indicating that the Commission would pitch for better monitoring of public expenditure in the 12th Plan document, he said, "We are at a stage where we need to pay a lot more attention to how government money is actually spend. Is it delivering results on the ground? Can it be made more efficient?"
Ahluwalia stressed on the need for creating investment climate, saying that it would revive domestic investment as well as bring in foreign investments. (MORE)