Planning Commission of India

Should government scrap Planning Commission?
Should Government scrap Planning Commission?

Should government scrap Planning Commission?

Prime Minister Narendra Modi in his maiden Independence Day Speech made an announcement to scrap the six-decade old Planning Commission, the body responsible for formulating India’s Five-Year Plans apart from playing many other important roles. The Planning Commission also serves as a link between the Centre and the states. Though he fully agreed with the role of the Planning Commission which it had played in the past but PM called this an old system that needs to be rejuvenated. To make it effective it needs to be changed a lot. And instead of changing it, it is wise to have new body. The new institution will be more federal and effective.

Prime Minister Narendra Modi invited ideas by tweeting “Inviting you to share your ideas on what shape the new Institution to replace the Planning Commission can take,”

Apart from this anyone can post suggestion regarding this on a government website.

Even a special forum ( has been set up for suggestions.

Idea behind scrapping the Planning Commission

PM Modi said that the Planning Commission was established on the basis of the needs and requirements of that time. Though it has contributed to the development and growth of the country but the present needs of our country are different.

The new institution will be set up on public-private partnerships (PPP model). The resources will be utilized optimally, state governments will be directed and it will be a sort of organization that will make our federal system stronger than ever. Hence the decision to scrap the Planning Commission has been taken to strengthen the federal system of India. State and the Centre will work together as a team to complete the task of development.

Industry experts believe that the present day Planning Commission performs the task of the Finance Ministry. This belief can be confirmed from the history as well. The time when the then Prime Minister Pt. Jawaharlal Nehru created the Planning Commission in 1950, the then Finance Minister John Mathai resigned stating that the task of allocating funds is that of the Finance Ministry not of a body selected by the PM. It is expected that the role of allocating funds will be given to the Finance Ministry in the new institution by PM Modi.

Many experts believe that India needs an institution that can define the strategies and provide a clear cut image of the country. It must lay down a strategy and formulate a path to tackle the fundamental problems of the country instead of making five years plans.

Scrapping the Planning Commission is based on the report submitted by the recently established Independent Evaluation Office (IEO). IEO has recommended PM to end the Planning Commission.

In its report the IEO stated that state governments instead of the Planning Commission are at better position to do investment because they have better local level information. Moreover India is such a diverse country that a centralized planning cannot work that effectively. It can just add to incompatibility.

It also stated that instead of strategic planning and thinking the Planning Commission was working on projects like construction of airports or other such projects. Instead it should work as a body to think about developmental plan for India in the coming 20-25 years.

For such an organization pool of right talent is required. The new institution must have domain knowledge experts and it should be free from ministerial influence.

IEO suggested to create a Reforms and Solutions Commission (RSC). But experts believe that the various ministries can carry out the role of RSC that include identifying new challenges and creating a repository of successful ideas.

But whether it is the Planning Commission or any other institution replacing it, it should work with an objective to develop India. It should be free from political interference. Instead of scrapping it, more professionals and experts can be added and the Planning Commission must be freed from any political influence.

Your opinion matters – Tell us whether government should scrap the Planning Commission or not?