New Delhi: A report prepared by the Independent Evaluation Office (IEO), headed by Ajay Chhibber, has recommended that the Planning Commission be scrapped and replaced with the Reform and Solutions Commission, adding to the debate about the role of the plan body in a changing India.

The Commission was created by Jawaharlal Nehru, the nation’s first prime minister, and has its roots in Nehruvian socialism that saw a largely planned economy. The new National Democratic Alliance (NDA) government is believed to be in favour of either scrapping or recasting the Planning Commission. After Montek Singh Ahluwalia resigned from the post of deputy chairman, the Narendra Modi government is yet to look for a replacement.

Advocating a “bold and radical step", the IEO has submitted a report to the Prime Minister’s Office saying that the current functions of the Planning Commission be taken over by other bodies “which are better designed to perform those functions".

The report stated that since the state governments have better information about local requirements and resources than the central government and central institutions, they should be allowed to identify priorities and implement reforms at the state level, independent of mandatory diktats from central institutions.

The task of long-term economic thinking and coordination, the report said, can be performed by a new body established to act solely as a think tank within the government. “This institution should be staffed with experts with domain knowledge and kept free from a ministerial administrative structure. It is also recommended that it should have full-time representation of major trade and industry organizations, civil society representatives, academics etc. so as to capture their concerns and benefit from their expertise in formulating long term strategy," it added.

The new Reform and Solutions Commission will perform three main functions: serve as a solutions exchange and repository for ideas that have been successful in different aspects of development in various states and districts and in other parts of the world; provide ideas for integrated systems reform; and identify new and emerging challenges and provide solutions to preempt them.

The report says that while the Finance Commission be made a permanent body responsible for the allocation of centrally collected revenue to the states working with the help of a panel of advisors, the finance ministry should be tasked with the division of funds among the various central ministries.

“To facilitate this task, a new Department of Planning can be created within the finance ministry. This department would work in consultation with the other departments of the finance ministry to allocate resources to meet the capital expenses of the other ministries of the central government," it added.

The IEO in its report said the Planning Commission was created in response to the unique challenges faced by a nascent democracy and a fledgling economy. “It conceived a top-down approach to planning that envisaged a dynamic Central government building up the economic and social order of weak states," it added.

N.C. Saxena, a former member of the Planning Commission, said he was in favour of abolishing the Commission but did not see the need to replace it with a solutions commission.

“Most of the functions now performed by the Planning Commission like deciding the size of the state Plan are mere rituals," Saxena said. “Other functions of the Commission like coordinating and evaluating programmes and schemes can be carried forward by the ministry of planning."

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