The future of India’s 64-year-old Planning Commission is a hot topic. The prime minister has declared it dead. He says the country needs another institution, with new capabilities and a new orientation, to set the country in a new direction. What should the shape of this institution be? Its name? He has invited suggestions from the people of India.
A small group within the last Planning Commission (which demitted office in June 2014) had looked around the world for insights that India could apply to a new institution, to processes that other countries are using and have used to accelerate the growth of industry, jobs and infrastructure.
These countries range from Japan in the 1960s and ’70s to Korea in the ’80s and China in the ’90s and early 2000s. They also include the US today, especially the state of California, an entrepreneurial state that is the antithesis of the Soviet Union, from which India adopted the architecture of its central planning systems. Californians have felt an urgent need to improve public infrastructure, such as education, urban and transport infrastructure and the management of water resources. A bipartisan “Think Long Commission” examined the planning practices of other countries, including China, to devise a structure to guide the development of California.
The new institution replacing the Planning Commission cannot carry on trying to coordinate the states and industry with a control mindset and with the (diminishing) authority to allocate money as its source of power. It must play a catalytic role instead. It must learn to deploy processes that spur a system of independent actors — states, private enterprises, civil society — to take a course that will benefit the nation.
A systematic analysis of what India needs today and international best practices suggests that four functions must be the core of the new institution to catalyse development and growth.
One, scenario planning must supplement, perhaps even substitute, five-year resource allocation plans. Scenario planning, based on disciplines of systems thinking, enables all forces, including non-quantifiable social and political forces, to be included in an analysis of the economy. Scenarios are dynamic in the guidance they provide. They are not predictive of precise outcomes but explain the actions stakeholders should take to produce the outcomes they desire.
Two, platforms must be created to connect stakeholders so that they can learn from and coordinate with each other. For example, the states must meet each other in well-designed and well-conducted meetings, in which the Centre plays the role of active facilitator rather than issuer of money and instructions. Similarly, platforms must be created for inter-city learning and for the exchange of ideas between states and regions on how industrial relations can be improved, therebyenhancing the productivity of all enterprises in the region. Three, the best methods for systematically turning contention among stakeholders into collaboration, and confusion into coordination must be injected into the system. Such methods, introduced through the Total Quality Movement, were the accelerators of Japan’s rapid development. Such methods for stakeholder collaboration are institutionalised in Germany and Sweden, and explain the ability of these countries to steer through economic crises and maintain strong manufacturing industries even with high wages and strong currencies. Malaysia’s Pemandu methodology and Germany’s Capacity Works methodology, both for large-scale sectoral improvement with the systematic involvement of all stakeholders, were brought into India recently by the India Backbone Implementation Network, an innovative solution conceived by the Planning Commission. It is interesting to note that even in China, citizen participation in city planning has been introduced. And China has disseminated disciplines of project planning across the country. Four, the new institution for reforming systems must be a node that induces faster learning and implementation in a large network of thinking and acting institutions. It need not be — must not be — a large bunch of experts in the domains in which the country needs to improve. The solutions need not come from the expertise within the nodal institution. They will be more robust when they come from the intelligence of the entire system, in which there will be many “experts”, some with theoretical knowledge and some with practical knowledge. The role of the new institution must be to stimulate the use of this knowledge to address the challenges of the country. Its expertise must be in the design and facilitation of processes required for large “learning enterprises”. These are the four core architectural requirements for an institution to accelerate the advance of the Indian flotilla of states, private enterprises and citizens. The new institution may perform other functions too. However, it must not drift from its core purpose, which is to “guide” the progress of the country and to “catalyse” faster learning, better coordination and faster implementation. This is what an aspirational, richly diverse and democratic India needs in a Planning Commission replacement. States, Central ministries and others should go to this institution not because it has the power to give them money (which it will not) or because it has the authority to withhold and grant permissions (which it should not have, this being the prerogative of the executive). They should respect the institution because they value its foresight and the guidance it gives them for improving their own strategies and building capabilities.
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