Why was the Planning Commission of India created and why does the Indian Prime Minister Modi want to scrap it?

polity governance : Why-was-the-Planning-Commission-of-India-created-and-why-does-the-Indian-Prime-Minister-Modi-want-to-scrap-it – balaji

Answer by Balaji Viswanathan:

"You don't know me. You don't own me. You don't control me," pleaded the little kid as she was dragged into the shady office.
"I'm doing this for you. And for all of us. You are becoming too independent."
"I promise, I won't do it again. I will follow all your orders."
"No, child. This is in your best interest. You must take this shot."

A violent cry filled the whole room. Then silence.
A little scribbling outside the office read, Yojana Bhawan.


67 years ago, the old school down the street got a new headmaster. While he was a good man, he didn't really believe in the capabilities of the children. He saw a few errant boys breaking furniture and wanted to clamp down the whole student body. Thus, he created a new committee drawn from some old employees of the school. Some of those members harbored a deep suspicion and hatred for the boys.

At first, this body determined what subjects to teach, who will teach and what the school's timing would be. Students found this reasonable and thought this new office is going to benefit them by doing things in a "planned" way.

Slowly, the committee acquired more powers and started controlling the whole life of the student. They meticulously planned the life of each student. They determined when you will eat, how much you will eat and what you will eat. They determined what study will work best for you. They controlled every minute of your day and every activity of your life.

By the time the students realized what they were facing, they were already locked up. They were not allowed to get out, nor were they allowed to take outside help. The students revolted. The headmaster brought heavy sticks. It was a bloodbath.

Many students didn't survive these harsh conditions.  Some needed more food than what the committee rationed them. They slept hungry & slowly died. A few others didn't like what they were doing and slept their nights crying.

The following headmasters were also good at heart, but were misguided by the committee. Seeing the students don't perform to their best abilities, they instituted even tougher discipline.  Most students gave up.

A few decades passed. A new headmaster had come and was horrified by the pitiable conditions. . He was appalled and made amends. He took out the lock & let students both go out and have outside help come. A following headmaster allowed the students to study whatever they wanted.

Later a headmaster came and finally asked the question, "what's the committee still doing? Why are they not fired yet?"


Nehru's horror house

This horror story is what happened to our economy since 1947. Like the little kids, our businesses were chained, punished and were clipped off their wings. Their creativity was brutally stamped and they were made to live in constant fear. Their investment intake & production mechanisms were deeply controlled by Licence Raj, leaving many hungry & dead.

Planning Commission is a relic of an outdated concept called the Planned economy. It is the heart of Communist economies. It relied on a fallacy that some bureaucrat knows much better about these businesses than the businesses themselves. This group of bureaucrats who have never ever run a business or sold a damn thing in their life, were telling the entrepreneurs how to do business. Just as every kid has an ambition & the strength of her own, every business has the capabilities of its own. They are all not the same.

It was formally created in 1950 at the height of a Communist movement worldwide. Nehru was enamored by the Soviet Union's ideals and thought such a centralized planning made sense for an economy as complicated as ours. He feared that the businesses doing mischief needed to be taught a lesson and need to be tightly controlled.

We know how stupid the concept is when it came to the horror school, but blindly accept those ideas as sacrosanct. Who are those bureaucrats to plan the economy? What kind of a silly notion is it to meticulously plan an economy of 1.25 billion people?

The horror created by the planning commission can be seen in the chart since 1950. South Korea, wartorn Sri Lanka and even Pakistan went ahead of India in percapita incomes. Only since 1990s we have started regaining our strength, by weakening the Planning commission.

What's a better way to do?

The successful countries around the world didn't have a planning commission. US didn't. Switzerland didn't. Neither did Sweden & various other successful countries.

Of course, they all had their headmasters who made some rules. The school created a wall and made sure the students don't escape without their notice. They also guided the students on what thing to study & provided that help. But, it was up to the students to exhibit the creativity. The school didn't force them to study, nor dictated how much time they should spend on each thing. With that increased responsibility, the students rose to flying colors.

Just as the students exhibit their creativity under enough freedom [although bounded by a few rules], people flourish under the Market economy that works by the same principle. Both in school and in the broader economy, we are increasingly coming to realize how important creativity and independence are. Thus, we are moving away from many of the chains of the past.

So long Planning Commission. Don't ever come back.

Why was the Planning Commission of India created and why does the Indian Prime Minister Modi want to scrap it?

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