CHAPTER I11

ECONOMIC PLANNING IN A SCHEME O F SUSTAINABLE DEVELOPMENT

A SUMMARY VIEW O F INDIAN PLANS

The chapter opens with a discussion on the relevance of planning

as a strategy of sustainable development. This is followed by a brief history of

pLznning in India. The closing section makes a critical assessment of the overall

performance of Indian Five Year Plans.

Rationale of State Planning in Sustainable Development

Planning as a strategy of macroeconomic management has wide

acceptance today. The difference on this score is limited to the nature and extent

of planning. The question being answered in this section is: Has the advocacy of

SE) necessitated any change in the approach to planning?

There is broad consensus among the proponents of the SDP on the

point that planning has to be democratic and comprehensive. They suggest

several changes in the planning framework as conventional plans are largely based

on the Neoclassical Economics. The contrast between conventional plans and

plans that aim to achieve SD is presented in table 3.1

Table 3.:l

SD and Changes In Planning Framework

Conventional Plans

Medium1 Short term planning

Focus on quantitative results I

Limited number of variables

Poverty eradication as part of Special programme for poverty eradication. overall development

Plans under SDP

Long term planning

Main focus on quality improvement

Large number of variables

Environmental aspects exogenous

Population planning centred on Population management for human limiting size development

I Environmental aspects endogenous

I

Natural capital accorded a low High regard for preservation of natural attention

Top-down in nature

oriented comprehensive plan

Proactive government

Source: Barfelmus (1994), WCED (1987)

Bottom - up in nature

The Need for Planning

I

Advocates of SD start with the presumption that human societies

have the capacity to adapt to changing conditions. The WCED noted, "Humanity

has the ability to make development sustainable ... technology and social

organisations can be both ntanaged and improved to make way for a new era of

economic growth"'. Planning is one, if not the only, mechanism of social

management. The support for comprehensive planning is almost total in the

'strong models' of SD. In such models plans cover a range of social issues2.

Pridham and Konstudakopulos note that SD involves "setting targets for key

environmental indicators and then influencing economic activity to meet these

targets. Here planning requires a high degree of state intervention and

coordination"'. The necessity of planning may be explained from different

angles.

Avoiding 'free riding' and over use of common property resources: The traditional

societies defended their common property resources (CPRs) - consisting mainly

of forests, pastures and water bodies with their living organisms -through certain

unwritten, yet widely understood social codes of behaviour. Mechanisms existed

that effectively curbed freeriding4. With the rise of capitalism the traditional

control systems disappeared. The impact of the process is described by Baland

and Platteu on following lines: Large scale intrusion of business interest in the

domain of CPR is the rule rather than exception. The present capitalist society

with its superior technology for mobility and centralised production arrangements,

makes it both possible and mandatory for individuals to move away from their

traditional comn~unity settings. (People on the move have less regard for

preservation of CPR). Specialisation and market integration - have the effect of ? making indi~~iduals less concerned about the intimate relationships that really ru_n -- -~

~ ... ~ ~~. i underneath - the social and economic processes. Further the consumerist culture,

promoted by industry,creates in people a pressing need for cash to such an extent

that there occurs a change in their rate of time prelerence in favour of present

consumption. They become myopic, and trade resources they can somehow lay

hand upon, to obtain cash5. The gist of the argument in that unless the society

establishes clear and binding rules on the exploitation of CPR, on the basis of a

comprehensive long term plan, they will be overexploited and wasted.

Market limitations and failures: A second strong argument for planning is based

on the possibilities for market failures, distortions and shortages with regard to

certain items vital to the sustainability of development. Many aspects of the

environment are out of bounds of the calculus of money. "Where market is

unable to cost properly the non-sustainability effects of the use or abuse of

environmental assets, some kinds of standards for what presumably are the

clualitative aspects of development need indeed to be set"6. Planning in this

respect has regional, national and transnational implications. In the opinion of

Hartelmus, "the incorporation of environmental concerns in.. . planning.. . requires

the introduction of space as an explicit dimension of an integrative framework7.

Plarzning as a rneans to set rules of co-nzanagement: Management of natural

capital by government may create several problems. Likewise community level

(i.e. participatory) management will not lead to optional results in some cases. In

this context it is suggested that "the state-based and community-based models of

regulation can be combined in numerous and imaginative waysn8. In such an

arrangement, rural communities or user groups tend to be regarded as the primary

base for resource management, with the state setting broad goals. The process

involves a reshaping of state intervention so as to institutionalize collaboration

between administrators and resource users, "which will end those unproductive

situations, where they are pitted against one an~ther"~. In order to be successful,

co-management must operate within a framework - a plan- where the government

integrates the needs and concerns of the user groups, early on in the designing

stages of the resource preserving strategy. The plan should supply the technical

information required and contain a scheme of incentives for promoting right

hehaviour. Provision of transparent principles for conflict resolution is also

important. A plan, which is complete in the above respects, will induce greater

cooperation from public. They will then regard plans as symbols of the

government's seriousness and commitment to the causes it profess.

Interrelated decisions and the need for coordination: Most modem states have

multiple levels of government - central, regional and local. Each of these may

have different subdivisions (ministries, departments etc.). A proper coordination

between the various levels of governments and their different organs is necessary

for achieving the objectives of SD. A plan that coordinates these bodies is

inevitable for efficient decision making on numerous 'trade-off questions and "to

take advantage of synergism's through win-win ~trategies"'~. SD requires the

identification and enforcement of wider responsibilities on each wing of the

government which needs meticulous planning. It being a multi-objective concept

spanning social, cultural and political aspects, a proper relationing of its different

components through a plan is called for".

'Diflerentiated responsibility' and the need for social intervention: The concept of

'shared but differentiated responsibility'- a slogan coined by NGO groups from

south during the Earth Summit(1992) - underscores the need to take into account

the non-uniform accountability of various actors in the damage to environment as

well as their responsibility towards its correction". The idea can be extended

beyond the environmental issues to many other aspects of SD. The policy

implication of the concept is that society has to charge on those who have more

(and those who benefit more from resource depleting growth) the major part of

the social cost of the adjustments needed for SD. This is however not an easy

item to implement as the measure will give rise to a lot of debate and stiff

bargaining. In such situations it is desirable to have a well-defined set of rules and

procedures that help the parties concerned to reach amicable solutions. These

nlles may have to be periodically reviewed as the situation changes. Planners who

are in a position to take a long run, impartial view can ideally perform the task.

Admittedly the process can be effective only if the planners enjoy a fair level of

independence from the executive.

International action and globalplans: Bartelmos, while considering the nature of

'interlocked world markets' and 'inter locking planetary crises' called for the

development of new planning and policy techniques. 'The time has come to

delegate some of the national powers to supranational arrangements and

institutions". To be practical - as of now this is an utopian scheme - a global

plan should precede the above process. To be able to fulfill their responsibility,

countries should have their own plans, that incorporate measures aimed at

fulfillment of the committed agenda.

Challenges to Planning for SD.

A major problem, especially in matters related to environment, is

that "the territorial competence of authorities ... do not always match with the

affected environment or the sources of environmental For eg. Global

bodies may be granted the power to issue legislation but not the competence or the

practical instruments to foster compliance. Another issue is related to the fact

that "comprehensive integration of non-monetary variables has not been

commonly applied in development planning and policies, due to conceptual as

well as statistical problems"". A third serious problem is the non-inclination of

governments in democracies to look beyond the immediate future. "The typical

approach at the national level has been to add an environmental chapter in

national development plans ... The shortsighted nature of medium-term plans ...

has been the principal obstacle to the effective and permanent integration of the

environment into the national socio-economic concerns and objectives"16. Yet

another obstacle to effective planning is the problems related to power delegation,

down the line of authority. "Power-sharing is at the heart of the effective

implementation of - decentralized- Sustainable deve~o~ment"~' plans. The

problem is more acute in grassroots level planning.

Planning for Development in India

Even before India attained Independence in 1947, there was

considerable agreement among her leaders,on the need for the state playing a

leading role in the economic reconstruction and subsequent development of the

economy. Jawaharlal Nehru, the most influential leader among those who

charted the path of the newly independent nation, was a strong advocate of

democratic socialism. As for the Congress party, it had declared its commitment

to socialist planning as early as 1938. There were a number of informal yet

influential 'plans' prepared by individuals and organisations belonging to the

period just preceding independencela.

The Plartnirtg Commission: The industrial policy Resolution of 6th August 1948

contained the governments resolve to embark upon a planned course. The formal

step to establish the Planning Commission (PC) was taken by the cabinet,through

a resolution on March 3,1950. In its status. the PC is an 'extra constitutional'

autonomous advisory body of experts with the Prime Minister as ex-officio

Chairman. It is charged with the formulation and evaluation of the plans. The

execution of programmes is the task of the governments at different levels. The

day to day activities of the PC is in charge of the Deputy Chairman (DC). The

post of DC was generally offered to an expert (non-politician). However, in

recent period,second -line leaders of ruling parties occupy it. The PC is assisted by

a number of permanent members. The Ministers of Finance, Human Resource

Development, and Agriculture are ex-officio members of PC. There is a Minister

of State for Planning

The PC members have collective responsibility, but each member

has the charge of a group of subjects. The commission has a secretariat consisting

of a large number of divisions, which may be classified into four types:

(i) General divisions, concerned with aspects of the entire economy.

(ii) Subject divisions, dealing with specific problems.

(iii) Service divisions, in charge of administration, accounts and general service.

(iv) Area divisions called the State plan divisions, where State plans are formulated and monitored.

Plan formulation: The formulation of a plan is an elaborate and time-consuming

process that involves consultations with elected representatives of people at many

stages. Usually the process starts two to three years in advance of the initiation of

a plan. The PC, as a first step, makes a general study of the major economic

problems of the period and also of the likely long-term changes in the crucial

parameters of growth. The findings are reported to the union cabinet first, and

then to the National Development Council (NDC), consisting of the planning

commission members and the chief ministers of federal units (States).The NDC

recommends the target and broad policy approach to be adopted. Panels of

experts are formed to go into the issues highlighted in the first stage. Based on the

panel reports, the PC prepares a 'draft memorandum' of the plan. The document is

first sent to the cabinet and then to the NDC for comments. A draft plan is made

after getting the suggestions from NDC, which is then circulated among central

ministers and state governments for their opinion.

Draft plan, once approved by NDC, is published to obtain the

reaction of the public. Both houses of parliament then discuss the draft - first

generally and thereafter in a detailed way through parliamentary committees. At

the same time,the PC interacts with various groups like the industry and exporters.

The state plans are also discussed at this stage so that possible inconsistencies

between central and state plans may be avoided. When the above consultations

are over, the PC submits a fresh memorandum to the union cabinet and the NDC.

Decision reached by the NDC, at this stage, forms the basis for drawing up the

final version of the plan. The proposal in its final form is now published. The

government presents the document to the parliament for its approval. When both

houses pass the plan, it goes to the President for his consent. Once he gives

consent the 'plan' becomes a legal document ready for implementation.

Plnn schedule: Eight five year plans were so far completed and the current plan

(ninth) is due for completion in 2002. Table 3.2 gives the time schedule of the

different plans.

Table 3.2

Indian Five Year Plans in Historical Order

1 Number Period I First Five Year Plan 1951- 1956

Second Five Year Plan 1956 -1961

Third Five Year Plan 1961 - 1966

Fourth Five Year Plan 1969 - 1974

Fifth Five Year Plan 1974 - 1979 (1978)

Sixth * Five Year Plan 1978 - 1983

I sixth Five Year Plan 1980 - 1985

I Seventh Five Year Plan 1985 - 1990 I I Eight Five Year Plan 1992 - 1997 I

Ninth Five Year Plan 1997 - 2002

* Operated only upto 1980 as the Janatha Party lost power in the general elections and the new government decided to have a fresh plan.

At times, the regular planning process had to be suspended. In the

aftermath of the lndo -Pak war of 1965 and adverse weather conditions, a "plan-

holiday" was declared between 1966 and 1969. There was an undeclared plan

holiday in the period 1990 and 1992 due to macroeconomic crises in the economy.

Annual plans substituted for the five-year Plans in all these years.

Table 3.3 presents an overall view of trends in selected indicators

of the Indian economy during the plan period (upto 1993-94). Though the

planners cannot take the full credit for the progress recorded, it is true that plan

programmes had an important bearing on each one of the indicators.

Table 3.3

Trends for selected indicators - India (1950/51-1993194)

1. Index of Per capita NNP at constant prices (1950-5 1=100)

I I00 I 120 I 135 I 145 1 197 I 203*

Indicator

5. l5mployment in organised pvt. Sector (in thousand per sons)^

1 - / 5040 1 6742 / 7395 / 7677 1 -

- 1950-51

2. lndex of agricultural production (1950-5 1=100) - 3. lndex of industrial

production (1950-51=100) - 4. Gross domestic capital

formation (% of GDP)

6. Employment in the public sector (in thousand persons)

1 - 1 7050 1 10731 / 15484 1 19058 / -

1960-61

100

100

10.2

148 1 1 l:L 1 328 1 342*

198 1162 1244*

15.7 16.6 22.7 27.1 20.4*

7. Per capita net availability of cereals & pulses (grmtday)

8. Squared poverty gap index of poverty a. Rural

b. Urban

9. Literacy rate (%) Female

Literacy rate (%) Male

# Applicable to 1977-78, c - Non-agricultural establishments entploying 10 persons or rttore,

1970-71

101,ife expectancy at birth(years)

Source: Dreze, .I and Antartya Sen [1995(1998)] Table A.4, Statistical Appendix.

395

7.5

4.8

9

27

1980-81

* Provisional estimates from government of India, 1995.

32.1

469

5.5

5.8

15

40

1990-91

41.3

1993-94

469

6.8

5.4

22

46

45.6

455

6.1#

4.5#

30

56

50.4

510

2.9

3.1

39

64

59.2

474*

-

-

The rate of annual variation of the indicators other than literacy is

(1970-71 to 1990-91) illustrated in diagram 3.1. Rectangles numbered 8 & 9

depict poverty in rural and urban areas respectively.

D. 3.1 Rate of change (%) per annum selected indicators (1970-to 1990-91)

I

I

Source: Dreze and Sen (1995), Table A.4, Statistical Appendix, adapted.

Plan Performance - A critical Assessment

A full scale review of Indian plans is beyond the scope of this

study. Issues that are related to the three selected areas are taken care of in the

relevant chapters. What is attempted below is a critical assessment of India's

performance with regard to the overall growth objectives, interpreted in the

conventional sense, ie. in terms of the trend value of GDP.

Growth trend of GDP

The trend movement of India's GDP reveals a scenario of gradual

improvement,rather than one of rapid upswing as desired by planners. The period

1950-1980 saw a moderate annual increase of 3.52 per cent in GDP as against the

average plan target for the period, at about 5 per cent; the 1980s marked an

improvement - GDP growth was 5.46 per annum.19 The respective value for the

1990's is slightly higher at 5.60. Thus the overall trend value for GDP increase in

the country works out to be just 4.32 per cent p.a. Moreover many economists

regard the upward swing in GDP, gained after 1985, to be the outcome of a set of

unacceptably costly measures like large fiscal deficit, excessive borrowing and

high inflation, and hence not going to be sustainable in the long

On numerous occasions the planning commission itself has

expressed its dismay at the tardy progress that the economy had managed.

Comparison of India's performance with that of some other Asian nations reveals

(hat what she achieved was much below what was indeed possible, given her

resources. Countries like China, Singapore, Malaysia, Korea, Thailand and'

Indonesia could exceed India's performance (1970-90) in aggregate growth: ,,:zJ '; ,L/

(annual percentage increase of GDP) by a margin of over three percentage ' points.2' Though one should not lose sight of the fact that India achieved what '

she did under a reasonably well performing democratic system while most of the

(others had growth under more restrictive political systems, the difference is too

large to be ignored. It is obvious that the economy could not maintain the level of

efficiency that is needed to support a high growth scenario. The real output,

therefore, fell far below potential output. The pertinent question to consider is,to

what extent can the mediocre performance of the economy be traced back to the

system and strategy of planning. In order to answer the question, the different

aspects of planning such as the theoretical model adopted, the nature of

assumptions behind the strategy and the broad political factors that had a bearing

on the programming and execution of the Indian Plans, are analysed in the

following section.

Reasons for s low growth

The Mahalanobis model and faculty assumptions: When India launched the First 7

Plan there was very little empirical data she could draw upon. Theory of

economic development as well as that of planning was at infancy. Dominant ideas

of contemporary Development Economics influenced the logic of Indian plans.22

The Mahalanobis model, which provided the theoretical foundation of the Second

plan, was a variant of the Hamod-Domer theory, that involved several simplifying

assumptions. Based on very optimistic assumptions on the level of demand and

the performance of wage goods sector, Mahalanobis model (MM) concentrated on

the supply side, that too of basic and key industries. Agricultural sector was

given a low priority in the industry-led growth model.23 Very soon the weakness

of'the strategy became apparent as the output of'agdcultural sector declined in the

1960's creating a condition of excessive inflation and demand shortage for

industrial goods. Even then the planners chose to ignore the criticism raised by

people like C.N. Vakil and P.R. Brahmananda of the Bombay School.

While presenting their Wage Goods Model, the economists of the

Bombay School argued that the Indian economy was characterised by disguised

unemployment that was different in character from unemployment mentioned in

classical or keynesion theories.24 The urgent task,therefore ,was shown to be the

transfer of the disguisedly unemployed persons, to small or medium scale

industries. A non-inflationary transfer of them was to be ensured by ready supply

of wage goods, and by giving maximum priority to agriculture and small scale

industry. But the model did not find favour with Nehm who was a great admirer

of the Soviet planning strategy that glorified large scale industrialisation. The MM

may well be named Nehru - Mahalanobis model, as the former had a telling

influence on its development and popularisation. However, the comparison

between Soviet Union and India,made at that time ,was a far-fetched one.

According to Meghnad Desai, India erred in continuing with the model for well

over 35 years since its first application in 1956.'"'

Sukhamoy Chakravarthy, while tracing the factors that influenced

planning in its initial stage, observes that, in the post-independent India the

'modemising approach' and 'scientism' of Nehru had the upper hand over the

Gandhian approach, which stood for rural development and preservation of the

balance between man and nature. "Gandhi and his disciples looked more like

moralising old men than like people who could be expected to change the

direction of the society. Thus the modernising school under Nehru won the dayo2'.

Persistence of massive poverty, high unemployment and general decadence of the1

rural economy even after nearly five decades of planning, to a great extent, can bei .i :

, , i .

traced back to the failure of planners to take a serious note of Gandhian precepts \ '

which emanated from a close observation of the socio-economic reality of t h e i

nation.

The import sub.rfrtutiort strategy and the costs: Though in the 1950s the import

substitution (IS) strategy suited India's interests, an obstinate continuance of it for

too long a period proved very costly. Jagdish Bhagwati, after making a

comparative study of the performance of India and East Asian countries,

concluded that the failure to shift to export promotion(EP) strategy after 1960

denied India a rightful share of the new opportunity offered by the rapid growth of

global economy in the next two decades . East Asian countries made a break and

achieved fast progress by profiting from an activation of exports. "The critical

differences was that India turned to the IS strategy, East Asia to the EP

~ t r a t e g ~ " . ~ ' The trouble with the inward looking IS strategy is that inducement to

invest is limited by growth of home demand - in the Indian case this crucially

depends on satisfactory performance of agriculture. In fact, agricultural growth

was small and erratic which kept the demand for final products low and

unpredictable. This in turn had a depressing effect on investment. A paradoxical

situation of a poor country not being able to invest its saving thus emerged. Gross

fixed capital formation as percentage of GDP, on the average lagged behind gross

1990s".~~

domestic savings in the period 1950-1980 and for a number of years in the J

Slow progress in GDP may be partly explained by the failure to

maximise growth potential. Upto the mid 1980s India had adopted a policy of

restricting direct foreign investment (DFI). According to critics this denied the

economy an easy route to technological upgradation and employment growth.

Instead the country opted for modernisation through . . borrowings fr0.m

international market and multilateral in~titutions.'~ - Pumped - - - into an inefficient

public sector, this money did not produce the expected result. As observed by

Desai, "without a change in the economic structure and incentives .... the money

was fritted away in low yield projects"3~ leading to the severe debt crises of 1991.

'The domestic industry, protected as it was from international ~ competition, ~ . .. had

little incentive to undertake efficiency enhancing improvements. Most of the

studies on the trend of total factor productivity (TFP) in the Indian manufacturing

sector report negative growth values, through some recent studies report positive

,values for later years. Evidently this factor contributed in no small measure to the

sluggish growth of India's GDP.

Growth through public sector-a programnle that failed: In the opinion of

Chakravarthy, planners erred in holding simplistic and too optimistic a view on

the power of the planning machinery and the public sector. "Insufficient attention

has been paid to the problem of how to obtain resources for public investment

purpose while encouraging the growth of incomes in private hands". From mid

1950s,substantial investments flowed into the public sector; a considerable portion

of the money for this was obtained through deficit ~ ~ financing and borrowings. For

a variety of reasons the sector remained inefficient and the accumulated losses of

the public sector made "a significant contribution to a macro crises in 1980's. In

addition, they crippled the efficiency of the private sector too, since the public

sector enterprises supply, infrastructure inputs such as electricity and

t.ransportation over which they were granted monopoly of production"32

Ineflciencj~ of Implementation: The problems related to defective strategy were

accentuated by the absence of an efficient execution mechanism. In India,

planners are in an unenviable position as they have little control over the

implementation process and are often ignored when critical policy changes related

to the economy are made.33 Policy making in a large country featured by extreme

diversities (agro-climatic, social and cultural) in beset with problems. It is not L' 1 I - r

possible for eg.,to assume that the same economic stimulus will produce similar -

response throughout the country.34 There are three levels of Government and the

charge of execution of plan programme is unevenly distributed between them.

The required coordination does not materialise often "either because messages

(are) faulty or because they (are) transmitted with delay or (go) contrary to the

specific interests of the actors involved ..."35 The states regularly complain of

under funding and powerlessness; more or less the same complaints are raised by

local governments against states. Electoral equations influence project and fund

allocation. It is no wonder that plans produce only a feeble impact on the economy,

and growth remains sluggish.

'So@ state' approach and overplay of vested interest: The democratic socialist

model that India adopted suited to the requirements of the well trenched vested

interest groups. Land reforms were delayed, and when finally implemented in the

1960s they left much to be desired. The retrogressive structures remained largely

untouched. "There was a tolerance towards income inequality, provided it was not

excessive and could be seen to result in higher rate of growth than could be

possible o the rwi~e" .~~ There was a reluctance to implement measures that could

predictably invite the displeasure of influential sections. As a result the

government desisted from substantially taxing agricultural incomes, scaling down

subsides and downsizing public sector - measures that could have relieved the

cash crunch of the exchequer and at the same time spurred efficiency. The failure

of planning is essentially related to the absence of political will. There was no

constructive cooperation among dominant political groups. In this respect it is

worth noting that in all cases where nations achieved remarkably, with the

exception of the petro-dollar-rich Middle East, quick and sustained growth

followed changes at the structural level. In the recent period, the positive effect of

large investment in human capital also has played a critical role ". By failing to

effect structural changes and by not taking proper care of the measures for the

development of human capital, India is in a handicapped position with respect to

growth. This brief overview of Indian economic growth leads to the conclusion

that even irt the convenrional sense, progress was mediocre. /

Globalisation and the Changed Role of the Pianning Commission

With the initiation of the globalisation process and the

accompanying structural adjustments, the PC was faced with new challenges. A

debate has ensued on the very relevance of PC:. Those who hold that the PC has

lost its relevance, argue along the following lines: -

. With globalisation, the power of domestic control systems has declined or

disappeared. The MNCs, are in a position to influence the international

agencies like World Bank and the WTO. In the process the very autonomy

of governments in LDCs is at risk. Further, the emergence of a virtually

independent global regime of international finance and the domination by

MNCs in vital areas like information technology and knowledge, make

decision making very complex. Trend prediction is beset with problems

and in such a scenario, plans can not be properly made at

s In India, originally, the PC played the role of the controller of private

sector. It possessed a number of instruments for regulation, many of

which are now non-existent or impaired. As one commentator recently

noted: "the planning commission's old occupation is gone. The reform

process has released forces, which are often beyond the control and often

the comprehension, of Yojana Bhavan. It no longer has even such limited

means as i t had in the 1980s to reshape policy ... How can it set any

credible growth targets when so much depends on the caprices and

calculations of private investors at home and abroad"39.

Evidently, the drastic changes in the macro - economic front have

necessitated complementary alterations in the organisation and modus operandi of

all major institutions, including the PC. In fact, a paradigmatic shift is called for

in the role of Planning Commission from being an agency engaged in detailed

planning to one broadly indicating the required line of action. The fact that such a

c:hange was, indeed accepted, was made clear in the eighth plan document

prepared just after the declaration of the new set of policies. The supporters of the

new policy see such a shift as desirable and long overdue. Dandekar, for eg., in a

paper prepared for the PC, has dealt at length on the modalities of this change.

Going a step further he has suggested the merging of the PC with the Finance

commission. He concluded with the suggestion that, even the indicative function

of the PC will be ineffective in a situation where the private sector has alternate

'private' sources of information, based on which they can plan their future. To be

of some significance, "the Planning Commission will have to prove that it has

better information and greater economic expertise for the purpose"4'. The

relevance of the planning commission will be determined in the future, by the

e.rctent to which it can adapt to the new challenging situation.

Areas of Sustainable Developments in Indian Planning

The Planning system of India embraces practically all areas and

activities of the national economy. It is virtually impossible to cover all of them

in sufficient depth through a research programme of the present type. A decision

was therefore taken to concentrate on a selected number of areas in sustainable

development, which deserve the immediate attention of planners and the society in

general. Prior to the final decisions on the key issues for inclusion, a short list of

the critical problems was compiled. In the researchers perception, the following

qualified to be included is such a list.

1) Programme for a rapid and sustained reduction in population

2) Sincere attempt for eradication of poverty

3) Urgent measures to tone up the country's environment

4) Institutional changes that support sustainable development

5) Systematic planning of resource conservation, particularly those related

to land and water.

6) Revamping the system of National Accounts or the issues related to

greening of SNA

The first three aspects appeared the most urgent social issues for

immediate tackling and were duly selected for further analysis. Areas mentioned

as item number 4 and 5 in the above list are indirectly covered while the problem

related to these crucial areas are discussed. That the areas highlighted here are

critical issues was recognised by the United Nations when it announced The

Fourth International Development Strategy (for the 1990s). The priority areas

identified were eradication of poverty and hunger, population, environment and

'human resource and institutional development' 42. Of these the last issue is

indirectly mentioned and the first three are treated at considerable length. As

mentioned in the methodology section of chapter one, the discussion is patterned

in stages - first, the plan programmes as revealed by the official documents are

summarised. A data section, where latest available information on the 'success'

of programmes is illustrated, follows this. The final section consists of critical

assessment of plan policy. The major evaluation criteria are provided in the

opening section of chapters IV, V & VI, and obviously they are patterned after the

ideas contained in the sustainable development model. (covered in chapter 11)

Chapter Reference

WCED (1987): Our Common Future, New Delhi: Oxford University Press, p.8

Baker, Susan et.al. (eds., 1997): The Politics of Sustainable Development, London: Routledge, pp. 15-16.

Pridham G. and D. Konstadakopulos (1997): "Sustainable Development in Mediterranean Europe", in Baker, Susan et. al (eds.), op.cit., p.134.

Baland, J.M. and J.P. Plateau (1996): Halting Degradation of Natural Resources, Oxford: FA0 and Clarendon Press, pp.3 12-3 14.

Ibid., pp. 280-282.

Bartelmus, Peter (1994): Environment, Growth and Development, London: Routledge, p. 108.

Ibid., p.88

Baland and Platteau (1996), op.cit., p.346.

lbid., p.347.

Bartelmus, Peter (1994), op.cit., p.29.

WCED (1987). op.cit, p.63

Liberatore, Angela (1997): "The Integration of Sustainable Development Objectives into EU Policy Making", in Baker, Susan et.al. (eds.), op.cit., p.122.

Bartelmus, Peter (1994), op.cit., pp. 149-150.

Liberatore, Angela (1997), op.cit., p.117

Bartelmus, Peter (1994), op.cit., p.107.

Ibid., p. 126.

1'7. Ibid., p.149.

Jain, Anilkumar (1986): Economic Planning in India, New Delhi: Ashish Pub. House, Chapter I.

Panda, M.K. and Kirit S. Parkh (1997): "Macroeconomics scene", in Parikh, K.S. (ed.), India Development Report, New Delhi: Oxford University Press: p.28 (table 1)

Ibid., pp.37-40

Rangarajan, C. (1998): "Development, Inflation and Monetary Policy", in Ahluwalia, 1.J and IMD. Little (eds.), Indian Economic Reforms and Developntent, New De1hi:Oxford University Press, table 3.1, p.60

Chakravarthy, Sukhamoy (1987): Development Planing-the Indian Experience, New Delhi: Oxford University Press: p.4

Ibid., pp.17-18

Desai, Meghnad (1998): "Development Perspective - Was There an Alternative to Mahalanobis" in Ahluwalia & Little (eds.), Indian Economic Reforms and Development, New Delhi: Oxford University Press, pp. 42-45

Ibid., p.41

Chakravarthy, Sukhamoy (1987), op.cit., pp.7-8

Bhagawati, Jagdish (1998): "The Design of Indian Development" in Ahluwalia and Little(eds.), lndian Economic Reforms and Development, New Delhi: Oxford University Press, p.28

Panda and Parikh (1997), op.cit., table. 3, p.28

Desai, Meghnad (1998). op.cit., p.47

Ibid., p.47

Chakravarthy, Sukhomoy (1987), op.cit., pp.17-18

Desai, Meghned (1998), op.cit., p.34

Thimmaiah.G. (1997): "Changed Role of the Planning Commission", Hindu Survey of Indian Industry 1997, pp.34-35

Chakravarthy, Sukhamoy (1987), op.cit., p. 45

Ibid., p.40

Ibid., p. I0

Dreze, Jean and Amartya Sen [I995 (1998)l: India-Economic Development and Social Opportunity. New Delhi: Oxford University Press, pp.32-44.

Shukla S.P. (1988): "Restoring Autonomy in the Management of the National Economy", Economic and Political Weekly, (Jan.10). pp. 23-24.

Shyamlal (1996): "The Decline of the Planning Commission - Facts and Fiction", The Telegraph (daily), Dec.12, p.10.

Datta, Babatosh (1992): Indian Planning at the Cross Roads, Delhi: Oxford University Press, (Introduction).

Dandekar, V.M.(1994): "Role of Economic Planning in India in the 1990s and Beyond", Economic and Political Weekly, (June 11). p. 1459.

Bartelmus, Peter (1994): Environment, Growth and Development, London: Routledge, p. 108