Plan Panel successor must have powers to grant funds

The Indian Express, November 27, 2014
The proposed new body that replaces the Planning Commission should have the powers to grant Plan funds, in order to fulfil the development mandate of the government, former members of the Plan panel and experts have said. They added that the power to grant funds should not be transferred to the finance ministry to prevent a potential conflict of interest.

If this is not done, then Prime Minister Narendra Modi may not have a complete picture of the development scenario and may deny him the “benefit of an independent, and at times possibly adversarial view, about the importance of various types of developmental expenditure”, they argued at a meeting convened by the commission on August 26 to discuss the contours of the proposed body.

The experts justified their stand by saying that the finance ministries in all nations normally focus on short-term issues, especially expenditure control. Its agencies and line functionaries are limited by their mandate to preserve revenues, manage expenditures and oversee regulations of financial systems.

“Hence there are numerous potential conflicts between line functions of the ministry and what may be called the development mandate of the government,” they said, according to the minutes of the meeting.

The experts were also of the opinion that shifting fund allocation function to the Prime Minister’s Office (PMO) would also not be a desirable option. This was because the Prime Minister may chair the new institution, and would be free to decide the PMO’s role and extent of its involvement in the process of Plan fund allocation.

Among those who participated in the meeting included former finance minister Yashwant Sinha, former RBI governor Bimal Jalan, former Planning Commission member Saumitra Chaudhury, Chairman of the Thirteenth Finance Commission Vijay Kelkar, BJP spokesperson MJ Akbar, former UGC chief YK Alagh and other economists and academics such as Shankar Acharya, TN Ninan and Pratap Bhanu Mehta.

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