Interview with Yashwant Sinha, Bharatiya Janata Party leader.
AS a former Finance Minister and a long-term bureaucrat, BJP leader Yashwant Sinha has a first-hand understanding of the planning process. As head of the Parliamentary Standing Committee on Finance, he has presented a report recommending changes in the structure of the Planning Commission and has called for a redefinition of its role and responsibilities. Excerpts from an interview he gave Venkitesh Ramakrishnan and Ajoy Ashirwad Mahaprashasta:
Widespread consultations were initiated with a large number of civil society groups, but there are many who feel that the draft Approach Paper to the Twelfth Plan has failed to meet their expectations. How do you look at the whole process?
I am not against planning, but I am not totally in favour of the Planning Commission because of the manner in which it has functioned ever since it was set up. Successive generations of Indian leaderships, including me, have let down the masses, and I feel that primarily the Planning Commission is responsible for this. If a large number of people are still poor and deprived, it reflects upon the planning process. It is evident that the top-down approach of planning does not work. It is a body which is reflective of the general feeling that people sitting in Delhi have all the knowledge and people in the hinterland are ignorant.
I also believe that the micro-planning that we are doing sitting in Yojana Bhawan in Delhi is completely wrong. For example, sheep farming was encouraged in the Fifth or the Sixth Plan. A farm like that kept running in one part of Jharkhand for years even after all the sheep had died without reproducing. The management of the sheep farm kept running in Plan after Plan.
India has changed over the years. The federal system has become stronger and more democratic with the empowerment of panchayats. But we have not effectively devolved powers to the local bodies. They are elected in the same manner as the Government of India is elected.
The Planning Commission and the Government of India run 250 to 300 schemes. The Planning Commission insists on a hefty gross budgetary support for the Plan. Once the budget is fixed, the Deputy Chairperson of the Planning Commission allocates funds accordingly to the States and the Central Ministries. If there is less spending on agriculture or public infrastructure, the Finance Minister has to defend it in Parliament when he has no role in it. Therefore, the Planning Commission's role needs to be revisited and redefined.
What is your idea of a redefinition of the Planning Commission's powers?
We have made some recommendations in the report of the Standing Committee on Finance. Firstly, it should become planning-cum-monitoring commission. It should not get into micro-planning. That should be left to the States. Allocation of Plan funds should come under the Finance Ministry. The Planning Commission should do perspective planning. How will India be 20 or 30 years from now? In this process, they can break their perspective reports into five-year Plans. What is the kind of energy policy or rural development policy we need? It can also have a very strong monitoring wing that checks the translation of plans into implementation.
The number of schemes run by the Government of India should not be more than 10 or 12 that deal with areas like agriculture, industry, and so on, and could be holistic. Even if the scheme is 100 per cent Centrally sponsored, the States and the local bodies should be given the control, but it should also be strictly monitored by an independent agency. You can do this with a limited number of schemes but not with hundreds of schemes.
What do you make out of the process of consultations with civil society organisations?
I feel this is just sloganeering. We have been preparing people's plans since Independence. And we still have a large mass of people below the poverty line, the fixation of which is itself messy. What the Planning Commission should actually be doing is to carry out immediately a survey of each village in India to measure the access to schools, roads, drinking water and health facilities and the scope for small and cottage industries. This will lead to a village plan. Then, we should tell gram sabhas to prioritise their issues so that the Centre can fund their development programmes gradually according to its capacity. Also, reduce the planning size of the Planning Commission and increase the monitoring size of it.
The draft Approach Paper to the Twelfth Plan says that the market can be used to drive home development in the hinterland.
I don't think this is the correct approach. We should divide growth into two components: One part which is development that is touching the daily lives of the common people, and the other which is not directly involved with the daily lives of people, like capital markets, banking systems, energy and power, and so on. There could be a public-private partnership approach. The market can be brought in where it is useful. We have to take planning to the grass roots and connect it to national planning.
Even when the economic reforms were being introduced, it was argued that planning could be used to counter the ups and downs of the market economy. Has this hypothesis proven true?
In a note that I wrote on telecom regulations in the early stages of the spectrum allocations, I had pointed out that companies cannot talk about market economy on the one hand and come running to the government for favours at the same time. The role of the state cannot be minimised.
I am for economic reforms, but the market can never be allowed to substitute the government in a country like India where deprivation and destitution exist in a manner that is unbelievable. I have written a book in which I have said that you travel from one part of my electoral constituency to another, and in a matter of 20 kilometres you would have travelled from the 1st century B.C. to the 21st century. How can a state abdicate its role in such a state of affairs? I am not a communist, but it is evident that the state's role shall remain relevant.