Planning and practice

  • As Nepal considers restructuring its NPC, Indian and Chinese experiences could prove useful
Planning and practice

Nov 16, 2014-

The role and relevance of planning commissions are being questioned across developing nations, including in Nepal. Questions have been raised largely because of two reasons. First, such commissions have not been able to deliver in the recent decade. They have become white elephants with bloated bureaucracy, useful to park ineffective or politically disliked bureaucrats or technocrats favoured by the political parties in power. Second, the relevance of old school planning has largely vanished. There is a need to look at planning and development in view of the increasing importance of markets and the need of a contemporary economy, guided by fast changing technology, quick communications, youth vision, and globalisation.

This, however, is not to belittle the contributions national planning bodies made in the initial years in shaping the development roadmap of various nations. In addition, their contribution to shaping political thought and public perception requires clear vision and goals and that planning is a serious business cannot be ignored. Also, the economic meltdown that free-for-all capitalist economies have experienced since 2008 points to the relevance of good planning and regulatory bodies for consistent growth, better distribution of income, and overall human welfare. This article briefly reviews the planning exercise in Nepal, India, and China and seeks to offer some input to the ongoing debates on restructuring the National Planning Commission (NPC).

Nepali experience, Indian plan

A central planning body was established in 1956 with the initiation of planned development in Nepal. It experienced changes in its mandates and organisational structure periodically. Currently, the NPC is under the chairmanship of the prime minister with a full time vice-chairman, seven members, and a member-secretary; the chief secretary and finance secretary being ex-officio members. It is an advisory body for “formulating development plans and policies” under the directives of the National Development Council (NDC). Periodic and annual national development plans and programmes must be approved by the Commission before implementation. The NPC also sets ceilings for the allocation of resources and monitors and evaluates plans, policies, and programmes.

On the whole, the NPC has been instrumental in establishing a planning process in Nepal. Some progress in education, health, infrastructure, and poverty reduction has been observed in the planned period of over five decades. It has functioned better when the top political leadership took strong ownership and appointed competent professionals to lead it. Overall, the achievements have been far short of potential and expectation. Plans and programmes have neither been visionary and realistic nor implemented effectively in most periods. In recent decades, the Commission has been criticised for its micro-management of development, poor monitoring and supervision, lack of visionary long-term planning, and for being a dumping ground for political cronies, deadwood bureaucrats, or unfortunate technocrats not in the good books of ministers and political leaders.

In India, Prime Minister Narendra Modi is dismantling the Indian Planning Commission to start a new think tank consisting of independent technocrats, industrialist, chief ministers, and development experts as the government’s primary policy advisory council with a focus on “co-operative federalism in long-term perspective”. The new body is expected to be under the direct supervision of the prime minister and headed by a senior politician acceptable to most states with a few experts nominated by the centre and by the states. It is expected to develop an overarching view of India’s development needs from infrastructure to security, focus on preparation of long-term perspective plans, ways to improve outcome and effectiveness of huge welfare expenditures, providing economic data and information to government agencies and enterprises. Guiding contentious state-centre and inter-state issues to provide a smooth road-map for the uniform development of the country is likely to be its mandate too, while the Ministry of Finance decides on states’ budgetary support and annual plans. Reportedly, Modi aim is to replace an institution with the dubious distinction of being a parking lot for ‘cronies’ of the erstwhile government with a council in line with China’s National Development and Reforms Commission (NDRC).

Chinese initiatives

In China, the State Planning Commission (SPC) ran its centrally-planned economy since 1952, setting ‘production targets’ for everything from steel to wheat and rolling out the Five Year Plans. The SPC was shaped into the State Development Planning Commission in 1998 to help guide economic liberalisation. With the shift to a socialist market economy, the NDRC was created under the Chinese State Council in 2003 to promote sustainable socio-economic development, guide strategic restructuring of China’s economic system, monitor and forecast macroeconomic and social development trends, and develop strategies for climate change. It has 26 departments, a huge staff, and has been functioning as a ‘super ministry’.

Lately, though, the NDRC has been criticised for its bureaucratic baggage, excess power, and its approach being in conflict with the vision laid out by President Xi Jinping to give a ‘decisive’ role to market forces in the allocation of resources. According to Peter Martin, a government relations consultant, Xi’s approach is to circumvent the NDRC and centralise decision-making powers around the top Party leadership with the creation of a new “leading small group” responsible for “general planning” and reforms. The future priority for the NDRC will be providing guidance and coordinating a shift in role “away from approvals and towards supervision”. A reformed NDRC will be “heavy on macro, light on micro; heavy on planning, light on approvals; heavy on reform, and lighter on developmentalism”. First, this will involve a significant “centralisation of power” under the top leadership, especially Xi. In the longer term, the reform process may see a major “devolution of power away from the government and towards the market”.

Restructuring the NPC

A taskforce constituted by the Government of Nepal is to submit a report for NPC restructuring by early February 2015. So far, debates are reported to have ranged from scrapping it and creating a visionary and flexible ‘new think tank’ to converting it into a more autonomous and stable entity, such as the Nepal Rastra Bank. Two points may be worth noting in this regard. First, the age of bureaucratic and micro-management-oriented planning commissions are over. Restructuring will have to build a think tank that focuses on long-term perspective planning, guiding strategic structural reforms, providing vision for overarching issues on economic growth and social welfare, monitoring, and forecasts. Also, developing strategies for gainful employment for youths, poverty and inequality reduction, human resource development in line with internal and external market demands, private-public sector partnership, domestic and foreign investments, productivity enhancement, and burgeoning trade deficit management will have to be its focus. Second, the restructured think tank will need a visionary and proactive leadership from the head of government and the top political leadership, supported by a small group of competent experts who have a broad vision for the country and the world that is changing fast.

Pudasaini is a former UNFPA Representative in Sri Lanka and Yemen and former UNFPA Country Director for the Maldives


Published: 17-11-2014 09:16

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