Answer by Niharika Banerjee:
Part one – Why was the commission made?
Simple reason being to introduce formal planning in independent India at the national level for which there was a need of a permanent expert body which could take over the responsibility of the whole plethora of planning – plan formation, resource aspects, implementation and review. Thus, the Planning Commission was set up in March 1950 with the following objectives (broadly) :-
1. To draw the blueprint of the country's development over the five years.
2. Allocation of funds to the states.
3. Evaluation of various plans, policies and programs of the Ministries.
Part two – Why does the PM want to scrap it?
As per the Individual Evaluation Office Report,
1. the Planning Commission was created in response to the challenges faced by a new economy and that the current functions of the Planning Commission be taken over by other bodies which are better designed to perform those functions.
2. the state governments have better information about local requirements and resources than the central government and central institutions and thus they should be allowed to identify priorities and implement reforms at the state level, independent of mandatory diktats from central institutions (for more de-centralisation).
3. the task of long-term economic thinking and coordination can be performed by a new body established to act solely as a think-tank within the government. This institution should be staffed with experts with domain knowledge and kept free from a ministerial administrative structure.
4. Finance Commission should be made a permanent body responsible for the allocation of centrally collected revenue to the states working with the help of a panel of advisors.
5. the Finance Ministry should be tasked with the division of funds among the various central ministries.
's edit – One of the more important reasons in recent years , if i were to take a guess , would be the emergence of PC as a directive , powerful and highly influential body with its technical divisions staffed through nepotistic ways.
It is also noted as "Super Cabinet" or a "Parallel Cabinet" as its recommendations have been perceived as binding in nature because of the people who chair the commission
Hope I am clear. Thanks for the A2A.
, , , , , , please add edits if you wish.