"Plan com needs refurbishing to offer change"

Planning Commission member Arun Maira speaks to Prasanna Mohanty of Governance Now

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Prasanna Mohanty | October 6, 2010




The Planning Commission is in the process of reinventing itself. More than making five-year plans and allocating resources, it seeks to transform itself into what is being described as the Systems Reforms Commission—a strategic thinking group that will look ahead and think ahead, sense the emerging challenges and the opportunities and accordingly, devise appropriate responses for the government. Arun Maira, who has had a distinguishing career in the corporate world and headed the Boston Consulting Group until 2008, has been entrusted with this task. A Planning Commission member since July 2009, Maira shares his vision with Prasanna Mohanty. Edited
excerpts from the interview:

Why does the Planning Commission need a revamp?
From time to time you should look at an institution. The Planning Commission had a new set of members, a new commission, and so they said “Why don’t we reflect on what would be required to make the Planning Commission more effective in the current environment?”

Any particular drawback or reason you felt the plan panel wasn’t responding to the current environment?
Well, the environment has changed so much in the country and the world. Sixty years ago the country was more centrally managed. Now there is much more devolution of power to the states and further devolution within the states. Also, the private sector has a much larger role in the country. 

In all large entities, whether a corporation or a country, we need to foresee what may happen and make changes within to respond to that.
Previously, you could make many more things happen by the money you put in. Now it is not only the money that the central government puts in but also what the private sector and the states do.

Making things happen has changed, the need to have foresight hasn’t. In fact, it has increased. The world has become much more dynamic because of interconnection, globalisation and speed. The Planning Commission would need to refurbish its tools, its processes to be able to foresee into a much more dynamic world, offer change and also change its ability to communicate with people.

The Planning Commission is often criticised for not monitoring its projects that could have helped in fine-tuning, removing bottlenecks.
Many people ask the Planning Commission, “Why don’t you understand the details of what’s happening on the ground.” I say, routinely, no. Because that is the job of the state. And going further, if you have given it to a local body beneath the state level, then the local body should be doing it.

Then you are empowering people and making them responsible.

It has also been pointed out that there is a disconnect between the plan and non-plan parts of the government expenditure.
In a corporation, the capital budget is one thing and is separate, and the revenue budget is different. There is a reason for it.

The capital side of things will produce returns over a longer period of time. You need to raise lumpy money allocated against a lumpy project. The revenue side is: people are paying you for your products and services and what you spend on salaries and to deliver products and services.

This is good management actually. In other words, what we have is good management. Therefore, I think when people criticise they don’t apply themselves.

That comes from the Finance Commissions.
You can intellectually say that. I am talking from the point of management. In terms of separating two things, I see no problem. However, if people are not maintaining assets in this country properly because they say “I don’t have money”, then the Finance Commission says that the Planning Commission must foresee and provide for it.

What it means is you have to pass on more money from the revenue accounts to the Planning Commission for revenue purposes because maintenance is a revenue activity. This becomes a problem… The problem arises because there is no maintenance culture in this country. People put up things and don’t care about it afterwards – whether it is a road, a building or any electrical facility.

You are believed to have worked out a revamp plan for the Planning Commission.
We consulted with the stakeholders outside the Planning Commission to ask them what it should do more effectively. In that regard we came to know that we’ve got to be able to persuade a system that we don’t control directly – because we don’t fund everything in the system – to make things happen.

Number one, we should have the foresight, the ability to see further ahead on behalf of the whole system, like navigators with a radar; and then pass on the signals to the pilots, who are the executive.

To do that we would work with  people outside – even those outside India – who are in various fields, watching trends and giving signals about the changes that are under way. Working with them one can put a composite picture about what the world may look like.

What one is sensing is then converted into a scenario and made available to the pilots so that they can take appropriate action.

Number two, as we begin to see opportunities and the new challenges emerging – water crisis or unemployment, for example – we can prepare conditions so that there is no crisis. Three or four such big challenges can be located beforehand and then a variety of people can work together to see how to address those challenges. That’s what the white papers are all about—give out thoughts and ideas that people can then use to take action accordingly.

Now, we’ve got to persuade a variety of people about the scenario in the language that they understand so that they are able to take appropriate action.

So these are the three critical functions that the Planning Commission should perform effectively.

Will the Planning Commission then resemble the National Advisory Council or you see it differently?
I see it differently. In case of the NAC, it doesn’t have the wherewithal of the Planning Commission. It is a specialised agency looking into the social side and is going deeper. Similarly, there are other people working on the security side. That’s also a supplement.

So, there are specialised agencies looking into their areas of specialties. The one place where all such things are collated is the Planning Commission.

Will the plan panel continue to make five-year plans or allocate money after the revamp?
That will go on. What the Planning Commission does adequately will go on. We are talking about the additionalities, the changes. What the Planning Commission needs to do differently are the three functions I mentioned.

Accountability of the Planning Commission has always been an issue. It is said the National Development Council approves its plan without any critical analysis.
We are in a much more open system, a system in which there are many semi-independent or independent agencies like the states which take their own action and don’t report to each other or to the centre. Nor can they be asked to do things differently. So when you talk of approving a plan, by their listening to it (at the NDC) the function is served.

As I said, our idea in the Planning Commission has to be to inform these people; the good things to do and the changes that are going to happen. They should get influenced by this and do things they then feel like doing. We can’t insist that they do what is indicated in the plan.
If we put up a plan it doesn’t mean automatically everything in the plan is in an executive form. You say it, then devise a scheme, you sell the scheme, you allocate money for it and so it goes on.

For example, you come to an item, JNNURM, which is included in the plan in one way, but then it is developed and debated with the states and if then, at the NDC, they say that this item for which the money will be allocated centrally is okay, that is enough. They are endorsing as much they should be, at the time. They can’t endorse it anymore because details would be worked out through another process, again in consultation.

But it is also about giving power to the local bodies, which have become just implementing agencies even though they have the power to plan for themselves.
But that is what the Planning Commission is saying now for the PESA [Panchayats (Extension to the Scheduled Areas) Act] or the 73rd and 74th amendments which require that the local bodies make their plans. That is the right way to do things.
In a vast and diverse country, the only way you can get a sensible plan is when people make local plans. You can’t, sitting in the centre, know what is good for all the different parts. And once the local plan is made, the local bodies are made accountable for its implementation. But that’s not happening. People are not allowed to make their plan.

What is the Planning Commission’s role then?
It is to induce change in the system…the three things I mentioned. When the prime minister used the term “systems reforms commission”, it is not a budgeting commission any more. That’s the contrast. Many people see it is a budgeting commission. No, no, we are the “Systems Reforms Commission” which induces change in the system such that good things and right things happen. And one of the big changes in the system that has to happen is much more local empowerment and then creation of conditions around the local bodies so that they can function and be effective.

Now most of the investments are coming from the private sector or in the form of PPP. What kind of adjustments the Planning Commission needs to make?
It is the Planning Commission’s idea to have the PPP. It is part of the systems reforms. The Planning Commission has been saying: Look, we need much more money to make things happen. We are also in such a situation that we need the private sector to have a larger role. That’s the Planning Commission’s advocacy.

Does it limit the Planning Commission’s budgeting function?
Of course, and we should. I would be very happy if the Planning Commission didn’t have to give money. If the country was working, money was being raised by the states and the private sector and they were spending and the good things were happening in the country, it is perfect!
 

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