The Hindu Business Line : Stock taking by the Plan panel

The Prime Minister, Dr Manmohan Singh, and the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia... Will the Plan panel's inclusive strategy work for the economy?

AMID ALL the controversy that the Planning Commission should not engage itself with multilateral development institutions such as the World Bank and the ADB in devising mid-course corrections while formulating the Mid-Term Appraisal (MTA) of the Tenth Five-Year Plan, the full-meeting of the Plan panel was convened on September 9.

When the National Common Minimum Programme (NCMP) of the UPA Government clearly encapsulates the components of an inclusive strategy for social infrastructure programmes, such as education and basic health and provision of urban amenities in rural areas (PURA), should the Left parties stoutly oppose an inclusive approach of open consultations with outside experts for making the MTA meaningful and purposive?

Considering that the World Bank and the ADB have lending programmes running into millions of dollars with some of the Central Ministries as also the State governments for social and physical infrastructure projects, they may arguably have a better grasp of the underlying problems and, perhaps, the expertise for trouble-shooting.

So when the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, proposed to rope in outside experts to man the various task forces set up to recommend policy responses or suggest mid-course correction to the Tenth Plan schemes, he was motivated by an inclusive strategy of open consultations with shareholders and stakeholders.

Of course, the decision to implement policies and programmes would be with the Government, and the MTA document would be released with the imprimatur of the Planning Commission and not of outside experts.

Perhaps, the Left parties, extending their crucial support from outside to the Government, should allow the governing dispensation elbow room in policy-making.

Ever mindful of the Left parties, the Prime Minister, as Planning Commission chairman, in his opening remarks to the full meeting of the panel, said the National Common Minimum Programme (NCMP) clearly spelt out the components of an inclusive strategy. As such, he said, he has directed the Plan panel to evaluate the implications of the NCMP approach and to elaborate it into specific and feasible policies and initiatives, which could be built into "our development plans and programmes".

This must set at rest any fear that outside experts would hijack the Planning process by purveying their own nostrums. One cannot ignore the fact that one of the Bretton Woods twins, the International Monetary Fund, appointed Dr Montek Singh Ahluwalia its first Independent Evaluation Office (IEO) Director. Dr Ahluwalia served his term from 2001 to 2004 enjoying full functional autonomy and came out with a critical appraisal of the IMF's functioning. One should never forget that the final decision to implement policies and programmes of the MTA would vest fully with the Government.

As the full meeting's agenda pertained to the MTA, the Prime Minister rightly stated that the Plan panel normally makes such an appraisal to take stock of the progress in Plan implementation, review the feasibility of the targets and provide for corrective action.

To facilitate discussion on this issue, the Plan panel has circulated an Approach Paper identifying the key issues the MTA would address, setting out elaborately the areas of concern for the Government and the sectors of economic activity that ought to be in focus during the remainder of the Tenth Plan.

The Approach to the MTA said that the experience of the first two years of the Plan warranted "a review of the Plan targets, not only in terms of growth but also of social objectives". By way of a critique of the original Plan document, prepared by the previous National Democratic Alliance Government, it said the proposed interventions had made progress neither for high and stable growth of agriculture nor for food and nutrition security.

These matters, it noted, were of "serious concern.". The investment climate was identified as an area that needed attention in order to ensure revival of private investment, the Approach to the MTA said, adding that the functioning of the financial sector was a key element of this process.

On the social development plank, though the Sarva Shiksha Abhiyan of the previous government was well-conceived, its implementation has been slower than envisaged in many States. Consequently, the objective of attaining 100 per cent enrolment and retention in primary education by 2010 would not be realised unless there was a significant speed-up in the rollout of the SSA, the Approach to the MTA said.

In the health sector, there was no comparable integrated strategy for attaining targets, and the MTA would have to reflect on this shortcoming.

The Approach to the MTA admitted that infrastructure has displayed mixed results. Power and roads other than National Highways were identified as major areas of concern and solutions would have to be sought in policy and institutional design.

Urban infrastructure was another area with inadequate progress and functioning of local bodies would have to be strengthened if this problem was to be tackled effectively. Since capacity expansion in infrastructure would require a mix of public and private investment, there was need to reinforce the regulatory system in each sector to ensure that it is favourable to private-public partnership.

In plain-speak, the Approach to the MTA admitted that the notification of the Fiscal Responsibility and Budget Management (FRBM) Act would have implications for the resources for the Plan. Hence, it was suggested that the Finance Ministry and the Plan panel jointly map out systems by which the progress of the Plan would not be impeded by the implementation of this crucial fiscal law.

With alliance partners from the States obstreperously demanding their share of the cake, the Finance Minister has the unenviable remit of walking the tightrope with the Plan panel as the balance pole lest any largesse upsets the delicate fiscal consolidation process. The coming days will show how this deft management of politics and economics is going to be.