How did the planning comission failed to solve india's problems?
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Answer:
In his Independence Day speech, Prime Minister Narendra Modi announced the end of the Planning Commission.
There will be few mourners at its funeral, mainly old war horses like me. So this is in the nature of an obituary for an institution in which I served for a decade and a half, and where I learnt to understand the complexities of India's political economy.
When the Commission was launched in 1950, it was basically Jawaharlal Nehru's instrument for providing a coherent vision for the development actions of the central and state governments.
Along with his letters to the chief ministers, it was also an instrument for high-level policy education. In those days, it attracted some of the best economic brains from India and around the world to its portals, and for several decades every Indian economist of note was associated with the Commission in one capacity or another.
Twice in its long history, the Commission put its stamp on development policy - first in the 1950s and then in the mid-1960s.
In the fifties, P C Mahalanobis and Pitambar Pant were the ones who articulated development strategy - the former with his machines-to-make-machines strategy of priority for heavy industry, and the latter with the preparation of long-term perspectives for development that provided a quantitative framework for macro-policy and sectoral target-setting.
Many economists have criticised this as a mistaken import substitution policy. But this planning approach was formulated at a time when Europe and Japan were still in the throes of recovery from the war, and the prospects for export-led growth did not look promising even to the Indian economists who put forward a wage goods-oriented development strategy.
The achievements of this phase of planning in terms of capacity building are substantial. Apart from the steel plants and heavy machinery factories, these years saw the establishment of the Indian Institutes of Technology and the Indian Institutes of Management, the commissions for atomic energy and space, the Council of Scientific & Industrial Research labs and much more that is the basis for the scientific and technical capacities that underlie today's success stories.
Nor was this capacity building confined to the urban industrial sector. The system of agricultural research and extension, the expansion of the rural credit network, and community development were also all started in this phase.
The second time the Planning Commission made a real difference was in the mid-1960s, when, with the emergence of non-Congress governments in some states, the discretionary system of state Plan financing faced political problems.
This is when the Planning Commission, a little distant from the pressures of competitive politics, could and did come up with a solution in the shape of the Gadgil formula of central Plan assistance to the states.
There was a third time when the Commission looked like playing a seminal role in shaping development policy: that was in the early 1970s, when Indira Gandhi went in for a leftist policy of bank nationalisation, monopoly control, state trading in foodgrain, etc.