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New perspective includes liberalization and decentralization. When the process of liberalization was introduce in Indian economy. Whether planning as process or Planning Commission as machinery is referent or not. Reason because of which this doubt was cost.

Prior to 1991

In the context of India, controlled economy, 17 areas where state monopoly. Restricted to the market or Private institutions. Number of areas where state was expected to play a role and Private sector was highly regulated through per units and licenses. Type of environment, required here role and productive role in the part of state. Since so many activities to be taken us in state. The requirement of planning was inevitable. Errisioning the goal and how to achieve the goal. The very strategy of planning needs to be followed was considered to be redundant with come up of liberalization because small state and free market big market. Less and less regulation, more and more freedom, for private sector.

Natural concern that emerged was whether the planning had lost its relevance. This is a settled view:

Even in the era of liberalization planning still remains and continues to be relevant. Though the nature of planning has changed. In order to take not of the fact whether it is relevant or not.

• General notions there in the context of developed societies.

• Additional Conesus in Indian context which makes planning relevant.

Theoritical aspect also strong state v/s strong market. Number of responsibility are a matter through planning of legal framework inducements. In the context of India shift in the policy is in fact shift of the strategy though the goal has continued to remain same.

8th 5year plan

8th – 5year plan – “Growth of Equity” indicates that change in policy through new economic policy 1991 in merely change in strategy and not in goals that is of equitable growth to mitigate the gap to bring about more and more equalitarian society. Huge section living because and in poverty. Problem of population, environment under administration (inadequate administration.) He has came out with (new economic policy 1991).

Market as an intro not going to directly intervening in the areas relating to poor, poverty, education, illiteracy (rural, remote and more of poor). As far as critical socio economic condition in reference to India is basically problem afflicting remote, rural, underdeveloped, & poor. And market is not going to address the problem in those areas because that is not profitable in nature. There has to be direct intervention of state. Having Pan-Indian approach of planning has still to continue.

John Robinson – “Market for through invisible hands of strangulation it is not inherent, by people friendly rather it has to be made so”. Market when is introduced, competition clories grons and people get better services and goods at cheaper cost.

Market’s primary invest is to earn profit. It knows only ends and not the means. Rationalized strategies along with the participation of the people. Market is referred to as biggest threat to market principles. (because it wants to extract profit at any cost.) To ensure that market to ensure maximizing common good state max to come if with regulatory mechanisms.

1. Strong regulatory laws.

2. Strong regulatory institution.

3. Arrangements of adjudication.

It can be done only through planning. To fight poverty the strategy is to be empowerment. In order to empower then has to be employment. To eliminate poverty there has to be more and more employment with introduction of market they are to introduce capital intensions mechanisms to reduce the cost and maximum profits.

South East Asian economic three

1. Labour Intensive technology

2. Labour Intensive products

3. Labour Intensive export.

Very much realized that the type of economy they were promoting is that of freedom to Private sector. To introduce labour intensive technology in unviable. But labour intension product and export were being promoted. Done through tax exemption finance etc. Market itself on its own worked more and more on L.I. products & exports thus added to generation of employment. To order to fight poverty they promoted L.I. products & export. This can be done through planning. Market is order to function efficiently required stability and market itself go for planning.

In the era of liberalization & post-modernism number sector is isolated. Every sector is interlinked. Introduction base required for adequate planning is diverse. To go for system planning we need information. Which is multiple sectored & inter-sectoral no private sector can provide this multispectral inter-sectoral information base. Only national planning can provide for that kind of information bases. Based on which even the private sector can relif for their benefit.

Change in nature of planning from

• Imperative to Indicative planning

• Detailed to scenario analysis

• Comprehensive to partial.

• Top-down & chronologic to dialogic.

Planning in the context of liberalization: Rationale behind the type of planning being taken up earlier and what it is now. Before 1991 or before mid 1980s. Planning of nature of centralized planning national centralized co-ordinating planning agency in the form of Planning Commission.

Took up planning through socialistic pattern. Amartya Sen's article “Freedom and planning” in 1959, argued the rational, behind perusing a socialistic pattern of planning. India is country with many problems. Faster & balanced redistributive growth. Free market economy approach – rapid growth unlikely to be rose in the context of India. Market economy is for primary focus is profit & not growth incidental follout of profit is growth. This formula is not fit for countries with multiple disabilities, like poverty illiteracy, lower agriculture productivity. Market to earn profit needs educated mase infrastructure, Robert agricultural sector etc.

But these factors were absent in the context of India. Market led economy was not the solution. Recession economy grew at a very foot rate. To bring about faster growth requires to have huge investment. It has to be in a co-ordinated balanced way. Specific fours to bring about growth and not profit.

Type of growth and nature of growth desires state of economy and socialistic planning under a centralized planning through a centralized national planning co-ordination commission. This stance of Amartya sen has some limitations. Late 1950s & 60s growth has taken place but not visible in the poor sections of society. Whatever growth was there was captured by already well of people.

1961-1976-15 years plan with the very idea that growth has to be expedited. Mechanism of income transfer and distributive aspect has to be considered. From 1961 – this requirement for a change growth to be faster and redistribution of that growth has to be there.

• 1962 – Indo-chine war

• 1965 – Indo Pak war

• 1971 – Bangladesh Alteration war

During 1980 assessment achieved growth was 3.5% Rajkrishna termed it as “Hindu Rate of Growth” also through a targeted.

Growth target was not as per the expectations. Theorists argued that this failed, In the context of India the approach was that of a medition path and not socialistic approach. It was confused approach Certain other theorists Neo-liberal theorists argued against it. Indian economy based on tightly regulated economic system. Centralized economic system. In the absence of adequate checks and balances. It has resulted into large corruption. Very inefficient types of functioning. State controlled economy

• Extensive import restriction.

• Import substituted industrialization.

Centralized planning had made the entire economy in competitive, so this is the reason of growth undermined the capacity of economy.

Problems get compounded when the system is a democratic system. There will be other type of checks and balances legislature, continuous elections, forums to take note of there processes. The formal checks and balances are there. Innovative approach is lacking. So it becomes inefficient. Monopoly environment results into low economic growth. Planning the way it is being taken up needs to be dismantled. Manner in which planning to be taken up should be dismantled. Imperative planning under central control should be dismantled and indicative planning to be persued.

Mid 1980s

How a change in nature of planning to has brought about a rapid growth. Growth has increased from 7th 5 year-plan. Radical growth in 8th 5year plan. One area where we are lacking is redistribution of growth. Even today huge population BPL and poor. 40% of children suffering from malnutrition. More than 50% deficiency in terms of micronutrients.

11th 5 year-plan has been a shift to enrich the redistributive strategy. “Inclusive growth” 26 indicators used to assess the nature of growth, monitored by Planning Commission regularly initiatives are being taken.

Type of planning prior to 1991 was contrary to democratic ethos because democracy includes not only Political demo.

• Social democracy

• Cultural democracy

• Economic democracy

Freedom to choose the occupation of this liking without unreasonable intervention of state. Liberalization, Privatization, Globalization is initiative to farther enrich the idea of democracy. To be realized economic democracy. Reduction of restriction on the part of state.

Liberalization, Privatization, Globalization are essential engredents of democracy because they bring about economic democracy. Detailed, comprehensive, centralized and imperative.

Detailed

Every expert or area covered under planning identifying plan, goal, time, strategies means and machinery.
Imperative – compulsory: Plan defined at the top followed by the lower functionaries. Municipalities “Glorified municipality” “Doles receiving ”

Post-1991 – this is what is being shift in nature moving towards indicative planning but yet to achieve that not completely becoming indicative planning.

Indicative Planning

Came up first time in the context of “France” Board on the premise that market in order to function effectively requires adequate information. Inadequate information result into market imperfection. Market is neither capable nor on its part viable to go for collection of information the type, nature or amount of information that is required.

It was also realized that under neo-liberal eco market commitment along with Civil society commitment the type of growth expected is not possible. It is not possible through exclusive approach. It is possible only through inclusive approach or participatory approach. They will operate through

(i) It was not detailed as well not comprehensive and imperative. Fixed the target, but achieving the target was not mandatory. While outlining the target Idealistic reference towards future state of affairs. These were only indications and scenario analysis. What are possible opportunities, threats and bottlenecks. If outlines overall target but not mandatory scenario analysis is done. Acts a document for Private sector to devise their strategy based on the scenario analysis. State to safeguard its own interests it encourages or discourages certain areas. It is a capsule full of information about present and future with the analysis of past. This is not being taking up in most of the developing countries.

Already has become indicative but certain characteristic which can’t be contained within definition of indicative planning.

1980s – Infosys – applied for license to import a HP computer. Took 6 months to get license HP came out with a new model. Infosys was in a huge dilema. Planning Commission coming out with national 5 year plan where more than 75% of funds coming from Non-state Institution. Formulation of Nation Plan is a mega process not only exclusive exercise taken up by state.
Consultative process

Industry coming, agricultural participation etc. Co-ordinating plan formulation including multiple stake holders, Government trade union, farmers lobby, industrialists lobby (within it many lobbies pharmacy, automobile etc.) Direct intervention still continues to be imperative in some areas Eg: Education, Health etc. In other areas it is very much indicative. 11th 5 year plan – Aiming towards enhancing per capita income from $1000 to $5000

This calls for scenario analysis, size of population, economy etc. for an expected growth of population what should be the pace of growth of economy. Existing scenario as well as possible scenario. Private sector not forced but they are encouraged or discouraged through policies.

• Decentralized Planning

• Two major aspects.

• Liberalization

• Decentralization

In the context of India we have moved towards decentralized planning subsequent to 73rd & 74th amendment act. Before this also there was emphasis to bring about decentralized planning. “Let a thousand flowers bloom”. Establishment of New Dist” for planning. Planning still continues to be centralized formally decentralized but in practice centralized.

• Why to move towards decentralized planning.

• Justification by economic advisory council.

• Very size of country

Many districts are bigger in size as well as population than many countries of Europe. Ethnic diversity is also bigger in our districts. It needs decentralized power.

• India aspiring to become super power.

Autonomy in taking decision is critical. America has lots of autonomy in taking decisions. Indian reliance over others should go down. Energy security – state to be super power its reliance over external factor should go down. Indigenous approach towards energy self-sufficiency. Already the gap. between demand and supply is very high. That vulnuralislity leads dependecy on others.

Coal, Fuel, wind energy. Solar, Hydro power.

Non conventional energy resources to be availed of at local level according to its potential. At large scale as well as at local level. Needs decentralized approach.

India is not only geographically diverse but we have diverse agro climatic zones. Difference is soil content, rainfall etc. Whole of country 15 agro climatic zones in a single zone many more sub-agro climatic zone. Can be maximized only when planning is done according to the needs of the agroclimatic zone as well as the sub-agro climatic zone. Not only a commercial basis but at grass root level also even at the house hold level.

To have that kind of approach to food sufficiency and also nuturational self sufficiency we need to have D.P.

Overall development is not only about technology, capital, finance or material. It is also about human attitude & aptitude in terms of development and growth. In India we have diversity of attitude and aptitude of our people. Certain attitudes conducive for one and not conducive in another. We have to work out over the attitude and aptitude of the local people. To integrate the aptitude with the development we need DoPo. Initiatives taken in India for bringing about decentralized planning. Today because of 73rd & 74th amendment acts local self government in the context of India.

• Democratic decentralization.

• Democratic bureaucratization

• Bureaucratic decentralization

Nature of function of 6 humanistic, social psychological perspective, participative perspective.

Bureaucratic decentralization: Power to the decision lies at the lower level of hierarchy but those officials are appointed and not elected.

Democratic decentralization: Power to take decision lies at the lower level of hierarchy but those officials are not appoint but elected.

We had local self governments. Under 73red amendment act – 3 tier panchayati raj system. 74th amendment act – municipalities two tier and three types.

Under what basis it should come up. Also structural set up to bring about democratic decentralization. Institutional as well as structural mechanism. Both of them drive their power and depend on the constitution. Planning has to be taken up right at the local level.

73rd Amendment Act

Provides for article 243 and their article provides for district planning committee 243 G.

74th Amendment Act 243 W – Metropolitan Planning committee.

234 ZD – provides for panchayat planning committee.

243 ZE – municipal planning committee at local level.

73rd Amendment Act

11th schedule – As many as 29 items for rural panchayats as its juristdiction.

74th Amendment Act

12th schedule – 18 items for urban municipals to undertake planning.

These institutional in terms of plan formulation they should enjoy autonomy Fiscal and Financial autonomy.

Provided for state finance commission take not of financial stability of the local bodies. Formulate now to provide and how much to provide to these local bodies.

Also provided for areas of taxes and services; for local bodies. Constitutional safeguards for existence & performance are there hence. Submit their plan to district planning committee provided it is a rural area. (Both PPU & MPU) Submit the plan to metropolitan planning committee provided it is a big urban area. (Both PPU as well as Municipal planning units).

The District Planning Committee or MPC are free to reject the proposed plan.

1. Common interest

2. Take into account resources to be shared.

3. Whether these plans are in tone of overall interest of district or not, state or not.

DPCs and MPCs submit it to state planning commission, it further submits it to central planning commission.

The very process of Plan formulation is decentralized. We find critical analysis

It is not a decentralized plan for multiple reasons. Continues to be centralized for multiple reasons.

(i) Process of Plan Formulation: Starts from government providing broad outline what should be the goal objective aim planning commission based on those projections comes out with concrete targets. One Planning Commission proposal approved by government again comes back to Planning Commission. Work groups and studies concretised it in 5 year plans, Once approved by NDC becomes draft fine year plan. This becomes reference part for the state government to start preparing their own plan. Outline to the district to direct the local bodies to prepare their plan. Every subordinate unit formulate the plan acc. to the broad outline. Every subordinate unit acts as a filter to that of the planning which are not in congresses to the outine provided by the drafts 5 year plan.
(ii) These planning units have been provided with constitutional autonomy & status. 73rd & 74th amendment act is a central act dealing with local bodies (List II) Every state has to come out with compliance act. This act provides for enabling clauses. Two types of provisions:

1. Compulsory provisions (Three tier, performance etc.)

2. Optional provision (items which are provided).

11th schedule provides as many as maximum 29 items for panchayats state has to decide how much power to be given (maximum limit is in case of panchayats and in case of municipalities.)

These items to that of 7th schedules based on principle of subdiarity, - (list I, II) principle of concurrence – (list III) are overlapping state Government also has jurisdiction. No item is left exclusive for the local government .

(iii) Finance: Unless and united financial autonomy difficulty take dependent stance Areas of taxation. If at all there is any deficit state government to provide finance, National F.C. will also look into this. Quantum of money from divisible resources to go the states or to centre. What amount and on what premise to be given to states. Financial viability of the state so that state is able to give money to local governments. Arrangement seems to be sound. Biggest source grants coming from states. Sub-ordinate and subdued position to the state government.

(iv) Planning is a specialized activity cannot be taken up by laymen. At local level, there is absolute lack of expertise to carry out planning. How a truly Decentralized Planning can be brought about in the context of India? Same process with some modifications is needed cannot come from the below. It brings about parochialism, provincialism. Chaos, national perspective might be displaced. It must be modified and not replaced.Planning Commission Instead of coming out with single draft plan come out with multiple plan based on agro-climatic zone. Variable approach also requires expertise at all the levels.

Planning Commission has all the expertise It should come out with diff. plans for different agro-climatic zones. So that while the plans are prepared at local level the deficit of expertise is compensated due to presence of draft five year plan which is the work of experts.

1. Adequate Training: There should be ample focus on training of personnel at grass roof level.

2. There should be adequate consideration of financial viability of local bodies.

3. There should be shift towards iterative process in planning.

DPC or MPC must refer back with PPU or MPU via a consultative and dialogue process and should not be done without due consideration. Requires a spirit of mutual accommodation.

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