Re-inventing planning

The Prime Minister's rather blunt statement at the meeting of the full Planning Commission on Tuesday about the unfeasibility of the Tenth Plan GDP growth target of 8.1 per cent per year should come as no surprise.

In fact, it could well signal a refreshing dose of realism on the part of the government, a clear admission that there are serious barriers to sustaining and accelerating growth. Admitting that there is a problem is a necessary first step towards solving it. Politically speaking, Dr Singh can afford to distance himself from the goals that the Plan had aspired to, since they were set by the previous government.

The Mid-term Appraisal of the Tenth Plan, the completion of which was the occasion for the Prime Minister to make that statement, was the first formal exercise undertaken by this government and it would have been unwise not to take advantage of the opportunity to highlight the challenges and constraints that it faces.

That said, the Mid-term Appraisal apparently lays out a roadmap to deal with these constraints, but public debate will have to wait until the due process is completed. Dr Singh's comments do, however, give some indication about the nature of the solutions being proposed.

He admitted that things were going to be neither easy nor quick, indicating that some initiatives would have to carry over into the next period if they were to have any impact. Three issues that he raised should provoke thought and discussion. One, the rationale for planning with a five-year horizon in today's rapidly changing environment was questioned.

There was a suggestion that planning should become a multi-tiered process, just like it has become in the corporate sector. Long-term strategic thinking should co-exist with annual plans to get the full benefit of the exercise.

Two, he cast the private sector in a central role in many areas in which it has been, at best, a peripheral player. This clearly imposes a great responsibility on the state to ensure that the profit motive does not run on a collision course with development and welfare objectives.

Developing a facilitating framework, including the setting up of appropriate regulatory institutions, is, therefore, a key objective. This is a mandate that was earlier given to the Planning Commission in any case; one can only hope that the appraisal document provides an adequate plan of action for itself as well as other organs of the state.

Three, Dr Singh re-emphasised the fact that dealing with the significant, and widening, vertical and horizontal inequities was the primary responsibility of the state. It could not delegate this function, nor could it place its bets on a spontaneous trickle-down process.

The right combination of resources and institutions needs to be found for the range of scenarios, which sustain these inequalities. All these require a significant re-orientation of the way in which the Planning Commission works and the resources it uses.

But, beyond the role of the Commission, it must not be forgotten that it is the ministries that deliver on plans. Good planning must be backed up by effective action.