Commentary/Mani Shankar Aiyar

Planning is not just a socialist concept. It is a capitalist tool too

Chidambaram has quarrelled with Dandavate - and leaked it to the press. The Cabinet has resolved the quarrel - and leaked that too to the press. The National Development Council has been convened for January 16 -- and this has been announced in the press. The Ninth Five Year Plan is on the anvil -- and all this milna-bichachadna is par for the course.

The question is: Should the country be at all discussing an Approach to Ninth Plan which is par for the course, no more than a warming up of the approach papers of the past with the numbers updated to take account of inflation? For the document Dandavate has drafted could have been drafted by Mahalanobis. Do we not need a Manmohanised Plan for the Era of Manmohanomics?

Frankly, I do not know what exactly Manmohan Singh would prescribe by way of planning for Manmohanist goals. But I do know that we cannot be internally consistent in our economic policies, unless we recognise that the role assigned to the market in Manmohanism is so significantly different to what we have known in the last eight plans. That unless this paradigm shift is taken as the very basis of the Ninth Plan approach, the dysfunction between Yojana Bhawan and Raisina Hill, which led to Rao calling virtually no meetings of the Planning Commission during his entire tenure, will only grow.

And before you start applauding Rao's wisdom in consigning the Planning Commission to Jurassic Park, reflect that many of the most successful market driven economies have had the most elaborate apparatus to plan capitalist growth paths. This apparatus sets the parameters within which markets function efficiently, which means competitively, sensitively, flexibly.

It was macro-economic planning that took the United States under FDR out of the Depression and into the American century; which staged the Japanese economic miracle after World War II; which wrought the South Korean transformation into an East Asian Tiger; which pulled France and Italy from the position of the sick men of Europe into market leaders; and fuelled in Britain the Thatcher revolution. Planning is not just a socialist concept. It is a capitalist tool too.

Unfortunately, this is not a truth that could have dawned on Madhu Dandavate -- for some minds are mired in Laski and open to no later truth. I have not seen the approach paper - which will presumably remain for another fortnight at least, till the NDC meets, a closely-guarded state secret. But reports in the media indicate that we are back to the same old tried game of numbers. What the size of the plan will be, what are the projected growth rates, savings rates, investment rates, the assumed incremental capital: output ratio, etc, etc, etc.

That all such numbers have proved in the past to be fantasies takes away none of the zest from the game. Like pinball enthusiasts, planners keep pumping with glazed eyes the lever of the One Arm Bandit, praying one day, some day, to hit the jackpot. I sometimes think the only purpose of planning in India is to set term papers for economics (hons) students!

We cannot leave it at that any longer if we are to take India into the 21st century. For remember just one number -- the Ninth Plan will take us into the 21st century: 1996 to 2001 AD. The path to the next millennium is being charted by a hydra-headed minority at cross-purposes with itself. Hence, the easy resort to the number games of the past instead of innovative thinking for the future.