It is not surprising that the structure, role and functions of the Planning Commission are going to undergo major changes and the once-powerful body might soon lose some of its sheen. It might even lose its name. The prime minister has approved a proposal to overhaul the commission, which will now be known as the Systems Reforms Commission. There is a widely shared view that the planning commission has lost some of its relevance in the new and liberalised economic milieu. The last 10 years have seen more private investment in the economy than public investment without the close supervision of the commission. Road transport minister Kamal Nath’s harsh criticism of the commission as an ‘armchair advisor’  is a sign of the change in perception about its role.

The plan is to convert the commission into a think tank, which can generate fresh ideas in economic policy, interact with other think tanks  and engage more directly with  ministries and state governments. The commission actually has these functions even now. The difference would be that the new body will not have some of the more important functions it once had. When the commission was first formed, it had a decisive say in all aspects of the economy — including formulation of projects, allocation of resources, prioritisation of development, timing of investment and even pricing of commodities. It could not have been otherwise in the scheme of centralised planning which was adopted by the country then.
But the role of planning has shrunk now and that has made a change in the functions of the commission inevitable. There are some who argue that the commission has become totally irrelevant and should be scrapped altogether. This is wrong. There is the need for planning in many areas of the economy even now. The nature of planning itself may have changed in the new economic environment and the commission may have to be reinvented to meet the new demands. It had made important contributions in the initial years of development, which served as a basis for the faster strides made in later years. A sharper definition of its role and more clarity about its functions will help to avoid the kind of criticism that it has recently attracted.