On a new planning : Changing policies

Dr L Krishnamangol Singh *

It is now essential to note that there has been basic changes in the economic policies of planning with the replacement of Planning Commission by the NITI Aayog. In fact, the policy changes seek to initiate a new planning system for promoting economic growth and development in India and also in different states of the country.

Thus, a new Government at the Centre has a new vision of India and a new path to national development. In fact, the present Government does not like to follow the earlier models of economic policies. Thus, NITI Aayog has emerged as an important institution of economic and political policies with the latter reshaping the former.

In short, political changes seek to reshape economic changes of the country (i.e. India). While we admit that India's economic reforms were already started in the beginning of the 90's, focusing on planning and economic liberalisation, the earlier economic reform programmes also helped in addressing many of the parameters of macro-economic maladjustments of Indian economy, like savings and investments, inflation rate, export and imports, balance of payments, public debt, etc.

However, the earlier regulated Indian economy with the concentration of decision making power in the hands of erstwhile Planning Commission seriously affected the economic development in many states, particularly in economically backward states like the Northeastern states. Thus, planning and economic liberalisation policy became conflicting in the earlier regime dominated by the Planning Commission. In fact, the earlier institution of economic policy and planning could not address many of the critical issues of India's economic development.

It is against this background that the present Government at the Centre had replaced the erstwhile Planning Commission with a new institution known as the NITI Aayog in which all States of the Country (India) can play their roles in decision making for development of their own States within the framework of the national economic policy.

The composition and structure of NITI Aayog has also revealed that the era of command economy or controlled economy is now over, and that both the Centre and states can play active role of cooperative federalism in promoting economic growth and development of the nation and addressing the vast development issues of the country under the guiding principles of the Centre, which is different from the role of the erstwhile Planning Commission.

In fact, NITI Aayog has now opened vast opportunities for economic expansion and people's participation in development. Thus, the various national development programmes like the National Skill Development known as the Skill Development Mission have been announced, and they are now beginning to be implemented or being implemented in many states of the country.

Thus, many of the national programmes framed or formulated by the NITI Aayog, and announced by Prime Minister, Narendra Modi have opened vast opportunities for State's and people's direct participation in development for generation of employment and income, elimination of poverty and unemployment, creation of necessary infrastructures, etc.

And Prime Minister's flagship programmes like the National Skill Development (NSD), Make in India, etc., have emphasised on the supply side economics. In fact, the rationale behind the supply side of the economy is to grapple with the vast problems of unemployment by generating employment opportunities in different sectors of the Indian economy or the State's economy in the country.

And, the skill development of the growing labour force or the young people and make in India campaign are mutually reinforcing as the process of production in different sectors of the economy requires various skills of the workers. Thus, there are two levels of both make in India and skill development in the country. First, skill development is necessary for increasing the productive capacity of the domestic economy.

Second, both the skill development of the workers and make in India policy require increase in investment and inflow of foreign capital in the Indian economy. Thus, structural reforms of the Indian economy are necessary in order to integrate the nation's economy with the global economy or global nations, and increase the pace of expansion of the market economy or market forces with proper regulation of the Government for the critical sectors or fields of development.

In fact, the ultimate objective of skill development is to increase domestic supply and demand for various goods and services. It also seeks to promote export of these domestic goods to the foreign countries. Thus, the programme for skill development requires promotion of India's foreign trade in order to export the goods produced in the domestic economy or the national economy to the foreign countries.

For instance, India's transformation of Look East Policy to Act East Policy for integrating the Northeast or Northeastern region with the South-east Asian countries is a new trade strategy for expansion of India's foreign trade in the neighbouring countries, and enhancing the productive capacity of the Northeastern states of the country.

Thus, it is now imperative that various skill development programmes need to be given high priority in Manipur also in order to employ the skilled youths in different sectors of the State's economy, and enable the entrepreneurs to participate in the expansion of border trade with level playing field, and also in other non-competing items of trade.

Thus, the national programmes for skill development is intended to provide opportunities for employment and participation in international or foreign trade for the youths or entrepreneurs. It is therefore necessary to impart necessary training to them for developing their skills for various lines or fields of production, and also for enabling them to participate in international and intra-industry trade practices in order to create self-employment opportunities, and promote economic development of the States.

As there is now flexible funding system under the NITI Aayog, adequate funds need to be made available for various programmes for re-skilling the youths or entrepreneurs, and also for carrying out the various programmes or schemes of development in different states in the country, including Manipur.

It is essential to note that the present financing system under the Five Year Plans will now undergo a complete change. It can be pointed out that the establishment of NITI Aayog after replacing the erstwhile Planning Commission is not the end of Planning in India. As reported by Ratan P. Watal, Union Finance Secretary, Government of India, NITI Aayog is working on a sector-based medium-term planning framework (The Hindu, April 12, 2016, p.15). It is further reported that the new planning framework could replace five year plans. Thus, the 12th Five Year Plan would end by 2016-17( the last year of the 12th Five Year Plan).

Now, the financial approval of schemes and projects of both the central and state governments will synchronise or coincide with the award of the finance commission. This will enhance funds for various schemes of development. And the current financial year 2016-17 is the end of the 12th FYP. It is also reported that with the Planning Commission replaced (scrapped), the process of formulating a 13th FYP has not been initiated, as a consequence of which the era of five-year plans is set to end in India this year (Ibid.).

Watal, (Union Finance Secretary), further emphasised that "this, however, does not mean planning will go away". The only basic change is that there will be discontinuation of the Five Year Plans in India and new format of budget statements and accounts will be prepared (which is now being examined by a Committee) for financing various schemes and projects of both the Central and State governments.

The Central and State governments also will keep in view the differences between medium and long term growth potential or schemes. And, under the new planning framework there will be no distinction between the plan and non-plan for expenditure classification. This policy shift is intended to enhance flow of funds for various programmes of development and expenditure of the Central and State governments.

And, it is also reported that, there will still be revenue-capital distinction for expenditure classification within the framework of the constitution. Thus, under the new planning framework, schemes and projects and other development programmes can be formulated from different states and accounts or the financial requirements can be prepared in a bottoms-up manner. All these changes in the new planning framework is intended to improve the productive capacity of the economy.

It is in this context that Manipur needs to initiate various programmes for reskilling the youths and entrepreneurs in order to generate self-employment opportunities in various sectors of the economy. In fact programmes for re-skilling the youths along with technological changes in various sectors of the economy will promote employment opportunities, economic growth and development of the State.

Thus, it is necessary to identify the potentials of growth and development in Manipur and necessary training needs to be provided to the local entrepreneurs and youths for carrying out or implementing various programmes of development in the State. In fact, Prime Minister's flagship programmes like the National Skill Development are essential steps for building up the national development in which the States can also play active role for promoting economic growth and development of different states in the country, including Manipur.