Reason is not difficult to find. We may talk about great economic principles and paradigm of development but tend to overlook the first principles of economic management. I hope that the grand lords of Indian policy making from planning commission would dedicate themselves honestly to the task of developing this nation and delivering its populous from wretched destitution now.

We have seen our great economist waxing eloquent about efficient uses of resources for better value realization. They are their sartorial best when it comes to international forum. However, the moment they are asked to apply those very principles internally, somehow they tend to develop cold fields. Or, is it that they are too engrossed in pandering to certain vested interests, suiting their own insular interests, leading them to overlook even sound principles of economic management. Consequent to this self indulgence on part of the federal policy makers, we are faced with a situation where states having most competitive inherent strength has been rendered the most backward. Nothing can explain the backwardness of states like Jharkhand, Odisha and Chhatishgarh. In name of balanced development sound economic principles were given a burial leading to these paradoxes. Mineral resources and consequently even manpower resources from these state has been moved out on a large scale plunging these states to the depth of underdevelopment. Is this called efficient use of economic resources? In my opinion, people responsible for freight equalization has been the biggest culprit and responsible for crime against the natives.

Then we have created vested groups resembling the feudal system , to be more precise, the tribe based communities of yore. There are hardly any original thinkers left amongst us. Most of the policy makers are likewise tutored and their thought process is also shaped by the structured learning process they went through. That’s why we have seized to treat human as human and have started seeing them as some specific group, be it caste, religion , creed and so on. There are self serving pressure groups active which are successful in forcing the agenda on this nation with others being made to toe their line. This explains why our planning architecture has failed to make destitute the focus of our plans. Even when modern technology can help us precisely identify the destitutes and reach services to them in an efficient manner, we continue to pander to narrow sectarian interests.

Given the above fallacies, planning commission need to change its planning philosophy and get to the basics. It can take following few steps in its pursuit for betterment of masses:

1. Make person the unit and not interest groups as the unit for services delivery.

2. Stop funding to all the activities which are not embedded in wider social good

3. Schemes should not be created for the benefit of people involved in delivery mechanism but for the identified beneficiaries. Weed out the investment in things whose benefits are note perceptible given that we have more pertinent requirements vying for the same meager resources.

4. Restore principles of efficient utilization of economic resources by reverting control over minerals and other similar resources to states and areas within the state where it belongs. Set up an economic corridor on priority through these regions by providing support infrastructures so that industry and new township can develop their as well.

5. Don’t turn blind to broader trends like mass migration happening from specific regions. Invest federal resources which conform to “efficient use of economic resources” in the specific regions. Isn’t it ironic that even when large scale exodus from Bihar and Eastern UP for higher education is happening, federal sponsored higher education institutes are not being set up in this precise region? Setting up of upcoming education institutions, research institutions, hospitals away from the huge demographic concentration areas is leading to mass migration and cannot be termed as “efficient use of economic resources”. Planners should test all their policies to see whether these are going to help reduce large scale migration. Distressed migration for higher education, health care or for the job shows failure of planning process.

6. Recognize promising prospects in underdeveloped regions and invest federal resources in a focused manner to kick start economic regeneration. Development of an Economic Corridor from Raxaul to Paradip/Dhamara is of particular significance given its inherent potential in terms of international trade, tourism and industrial prospect.

7. Focused and time bound action plan for harnessing river water potential in Bihar is of particular economic significance. Lack of action plan means losing out on valuable economic resource which cannot be preserved for future use.

8. Given that metro cities have played a very pertinent role in development of surrounding regions and are a necessity in regards to large scale job creation, planners must think of developing new megacities by investing federal resources on priority basis. This will help check increasing burden on existing megacity and reach development to new regions as well. Planners must resolve that all upcoming institutions, factories and nodal centers, PSU and regulatory HQ’s among other strategic resources, involving direct or indirect federal investment, will be located in such cities identified for being developed into mega cities during next five year plan. It is necessary to create necessary economic mass to trigger self propagating and sustaining urbanization in the new maga urban centers.

9. And finally, there is an imminent need for separation of monitoring (policy making & regulation), supply(provider) and consumption function ( beneficiary) in delivery mechanism. Consumer must get a say in payment process to supplier. Though planning commission seems to recognize the need for separate monitoring and supply functionality, it is very much silent on allowing say in payment process to consumer. With modern technologies, it is possible to provide consumer/consumer groups say in payment process without creating any bottleneck whatsoever using banking channel.

The proposals as outlined in the preceeding sections do merit serious consideration. If our planners are honest and sincere in their pursuit they will surely find more efficient ways of economic planning. Preceding statement does not take away from the fact that our planners are among the most capable and eminently suited people for the job. Only that they are not able to pursue the course, which even they deem the correct one, due to inherent compulsions associated in working inside the laid down frameworks. Yet, we must strive to innovate and introduce new paradigms. For example, this can also be achieved by serving "Rat Dishes" to visiting diginateries as has been the wont of present incumbent principle secreatry of Bihar state planning department( His this innovative plan must have been the most talked about initiative of Bihar to have got international coverage, three month of continuous international media coverage in year 2007-08, till CM shot down his proposal).

*A Financial Sector Professional with over 14 years of experience in various streams like Investment Banking, Financial Services and Debt Market Operations.

Comment

comments...

I totally agree with Prateek- that our planning process is faulty!. Indian planners never look the ground realities in rural areas, where over 78 percent are below poverty line(what ever may be government figure). They have strange way to prepare approach paper and final draft of five-year plan in the country. Prateek has rightly taken into consideration the flight of man power from under-developed states! Our great economists, perhaps believe in only economic theory and principles, while preparing plan papers!
Recent meet of eastern states with Plan panel led by deputy chairman Planning commission Montek Singh Ahluwalia in Patna seems to be an eye=wash! Plan members should take comprehensive views and ground realities first in different parts of a particular states-look the development done so far and also special and social audit of poverty and lack of development in the areas, specially rural areas-than they should meet in air conditioned chambers and discuss the ground realities and prepare final drafts for five-year plan-all these decisions must by through consensus.Such process should be carried out in each and every states!
Surprisingly this practice is not taken into consideration as propounded by the five-year plan architect and prime minister late Pundit Jawahar Lal Nehru and plan panel leaders fly to state headquarters and hold discussions with top brasses of state and fly away after sumptuous dinner , break fast and lunch. And fly back with gifts and presentation, giving burden to state where such meeting is arranged, putting yet another financial expenditures in lakhs of rupees for arranging and hosting meetings.Instead of moving at least few rural areas of Bihar to know the ground realities, Montek had preferred for sight seeing tours of Ganga after his visit to the state headquarters.
Only one thing emerged tangible fact in the meeting that yardstick of assistance to states should be different taking into account the economic condition and backwardness of the state concerned.There are strange connotation of economic development when we go by Economic principles and development ! Planning process and its preparation should be transparent and according to the need and crunch of the states and in this process population and areas as well as development issue of each and every states should be taken into consideration.
India cannot be Europe and America notwithstanding the country is developing at fast pace where a few riches people are being immensely benefited and number of poor people are growing by leaps and bounds! One must have heard trickle down economy theory of latest internationaly known economists- they are of the opinion of economics of the country where richers and industrialists, corporates should be allowed to mint money and earn more and more money-and from their coffers -money will trickle down from them and poor will get automatic benefits -what strange views of the noted economists of international fame! Montek appears to be such type of economists, heading the planning commission of poor and developing India! Montek seems more concentrated to lobby for becoming head of International the wake di monetary Fund grace exit of present chief of IMF but brilliants economist because of rape charge!.
K K SINGH, journalist, retired from Times of India as chief Reporter and based at Patna.

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Congratulations to Mr. Anand for his great work. He has been setting the examples to youngster.
Vinay Sheel
Bangalore.