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India’s total public spending in terms of GDP amounts to around 27 percent. The public money is being utilised by Union, State and local governments together through implementation of schemes and programmes or spending by the autonomous/semi-autonomous institutions. Despite several policy initiatives implemented by the successive Union and State governments, the impact of development through public expenditure could not adequately reach certain regions and a sizable number of the disadvantaged population (Dalits, Adivasis, Women, Children and religious minorities). Many studies have pointed out different reasons for lack of access to benefits out of public resources which include social exclusion, poor policy design, inadequate financial resource allocation and lack of proper planning and implementation mechanisms. However, for better utilisation of public resources the Union Government taken series of interventions to have in place the effective mechanism for planning and implementation.

After Independence, it was felt that India as a new  country would require a greater degree of understating about the different types of available resources, varied needs of the regions/States and diverse aspirations of the people.  The scarcity of different types of resources and variation in the level of development across regions, castes and religions were pointed out as fundamental challenges before the country. In 1950s, Planning Commission was established and community development programme was initiated to address the problems mentioned above. These two initiatives could not yield desired results due to centralised approach in terms of effective planning and implementation of rural development programmes. Consequently, the system of three-tier Panchayati Raj Institutions (PRIs) was introduced in 1959. The 73^rd Amendment Act, 1992 again gave an opportunity to PRIs to work as local self-government with more control over public spending and resource mobilisation. PRIs were assigned the responsibility to plan and implement projects related to economic development and social justice. In this regard, States had to transfer 29 functions with fund and functionaries to PRIs. Also, PRIs /Urban local governments had the Constitutional mandate that they would prepare the District Annual Plan through grassroots planning involving Gram Sabha/Ward Sabha. However,  since barring a few states like Kerala and Karnataka, devolution of 3Fs (Functions, Funds and Functionaries) to PRIs could not take place, therefore, the provisions of grassroots planning  with reference to  Article 243 ZD could not be implemented. For preparing grassroots planning where public expenditure is earmarked and utilized as per locally felt need, it is essential that resources flow should be predictable. However, the line departments in the district implemented the programmes without involving the PRIs and the community. Also, there was a lack of assessment of local needs.

During the last four years, planning architecture in India has seen major changes. In 2014, the national plan body called Planning Commission was scrapped and later on the category of plan and non-plan expenditure was done away with in the budgets. NITI Aayog was formed in place of Planning Commission without any mandate for planning and resources allocation. Consequently, there has been no organic link between NITI Aayog, the State Planning Boards and District Planning Committees (DPC) towards preparation of a comprehensive National Development Agenda.

In 2015-16 a new concept of Gram Panchayat Development Plan (GPDP) was introduced by the Union government for preparing holistic Plan for Gram Panchayats (GP) pooling the resources. Although, the GP level planning was already there with process of annual district plan formulation carried out by DPC. GPDP gave much emphasis on GP planning without having much connection with Block and district level planning processes. The 14^th Finance Commission (14^th FC) in its recommendations provided more financial devolution to State governments as well as the local governments including PRIs and Urban Local Bodies.  After greater financial devolution made by 14^th FC the states and PRIs/ULBs have more untied resources with them. The preparation of GPDP was made mandatory for availing the grants of 14^th FC.

GPDP could not be implemented properly, mainly due to lack of pooling of resources from other sources (Centrally Sponsored Schemes, State Finance Commission Grants, MPLAD, MLALAD and devolved fund from States). GPs are left with only 14th FC grant because the funds from devolved functions could not be transferred to PRIs. Further, many states have put conditionalities for usage of funds by PRIs provided through 14^th FC. Finally, PRIs are left with meagre amount of untied grant to make their own need based plan. Thus, barring a few states, the concept of GPDP could not succeed due to the quantum of funds eventually available to PRIs.

Recently, NITI Aayog once again gave emphasis on preparation of district annual plans. NITI Aayog launched a new programme for rapidly transforming the backward districts (Aspirational Districts) on Jan 5, 2018. It identified 115 districts in 28 States on the basis of indicators such as health and nutrition, education, agriculture and water resources, financial inclusion and skill development, basic infrastructure including access to road, potable water, rural electrification and individual household toilets. The objective of identifying Aspirational Districts is to improve Human Development Index in the districts and also help the country in achieving Sustainable Development Goals by 2030.

One of the criticisms of the guideline of Aspirational District by NITI Aayog has been that it has not assessed the capacity of planning institutions as well as the implementation challenges faced by ongoing schemes (Centre and State) and additional resource requirement of these backward districts. Also, without proper engagement of State Governments and PRIs and Urban Local Governments, this new programme may not serve the purpose. The new programme does talk about preparing the District Annual Plan but it does not mention how different would be the process of preparation of District Annual Plan. In states like Uttar Pradesh, Bihar, Madhya Pradesh and Rajasthan, the functioning of District Planning Committees and planning and implementation capacity of PRIs has been a major issue. PRIs are understaffed in terms of the positions like Panchayat Secretary, Block Development officer, planners, clerks, accountants and derivers. They are not able to prepare and maintain the data related to financial allocation, fund utilsation, physical outcomes and socio economic and educational statistics at village and block level. In Uttar Pradesh and Bihar the main department tasked with compilation of socio economic data and decentralised planning is called Department of Economics and Statistics. The statistics prepared by the Department are to be used for preparing the District Annual Plan. It has to carry out surveys for preparing the socio economic and educational statistics for the district. However, it doesn’t have adequate staff at district and block offices for surveys and data compilation.

From the assessment of several policy initiatives by the Union government, it is clear that there is a need for effective decentralized planning (As per the provision of Article 243 ZD) for better outcomes. To have effective decentralized planning, Sates have to transfer functions, funds and functionaries to PRIs as envisaged by the 73^rd Constitutional Amendment Act. As states have been given more financial resources by the Union government through the 14^th FC recommendations for devolution, Union government should do more intensive advocacy with the states for fiscal decentralization to PRIs. Further, it is a prerequisite to have a Plan body at the national level which coherently plans and recommends allocation of funds for needs and aspirations of the disadvantaged population and backward regions in the country.

 

The views expressed in this piece are those of the author, and do not necessarily reflect the position of CBGA. You can reach Jawed Alam Khan at jawed@cbgaindia.org.