Three weeks back, the National Development Council (NDC) met in Delhi to approve the XIth Five Year Plan, for the period 2007-2012. The council was constituted in 1952 under the chairmanship of the prime minister, and with chief ministers and key cabinet members on board, with the broad mandate of effecting a coordinated approach between the Centre and states. In recent times, it has met to approve a mid-term appraisal, a draft proposal, or the final version of a Five Year Plan. Chief ministers, and more so representatives from states under President’s rule or Union territories, routinely read out extracts from well-prepared but boring speeches. This is interspersed by interventions from the finance minister, the deputy chairman of the Planning Commission and a closing statement by the prime minister. At the end of the deliberations, the document under consideration is invariably adopted. These meetings have become increasingly ceremonial if not mechanical. The council was designed to foster dialogue between the Centre and the states, more so at a time when a heterogeneity of governments in office reflect varied perceptions. Would it not be more meaningful if, assuming that the documents under circulation have been read, the prime minister can foster a dialogue on some key concern? If dissenting views emerge these could be taken in stride as part of an on-going review process, particularly for a mid-term appraisal. This can encourage dialogue on some of the contemporary issues in public domain. Illustratively, what could these issues be? • First, the issue of poverty. True, an expert body is looking into this matter. While considering its recommendations and decision thereon will take time, what happens in the interim? How are states expected to meet entitlement obligations for a much larger number of identified poor than the CSSO data would suggest? The transitional burden in many cases may not be small. Besides, seeking the views of chief ministers on the core issue of poverty can be more meaningful than relegating this exercise to an expert committee. • Second, the issue of rising public outlay and deteriorating quality of public expenditure. This goes far beyond the legitimate concerns of states that the share of the State sector as part of the Gross Budgetary Support has significantly come down. It is true that Centrally Sponsored Schemes which primarily benefit the states have absorbed this increased outlay. However, the rationale of continuing with over 100 CSS schemes (even after the so called rationalisation) is far from clear. Once a scheme has been initiated, vested interest between the Central ministry and the counterpart state organisation build a strong compact seeking their indefinite perpetuation. Surely it is possible to have independent scrutiny going beyond such vested interest. Over the last two years, many flagship programmes like the National Rural Employment Guarantee Scheme (NREGS), Bharat Nirman, insurance benefit for the unorganised sector and others aimed at the rural economy have been initiated. The outlays on these programmes are staggering. Isn’t this an appropriate time to revisit the 100-odd ongoing Centrally Sponsored Schemes and to re-examine their purpose and quality of expenditure? • Third, the issue of redressing regional inequalities. The prime minister has several times mentioned that growing regional and income divides impairs social cohesiveness. Are the current strategies — centrally sponsored schemes, backward district programmes, and ongoing infrastructure activities — adequate and responsive to redress this concern? Improved governance, of course, has multiplier benefits, and while periodic elections and meeting well-defined templates for access to financial entitlements does generate pressures, are these adequate? How to, for instance, escape the vicious cycle of competitive populism given the electoral cycle? • Fourth, subsidy rationalisation. Ensuring better targeting of subsidies to confer benefits on intended beneficiaries, minimising diversion and misuse and rationalising the subsidy structure has been under discussion for long. This is the area where progress has been erratic and marked more by regression. Everybody agrees that whether it be the Public Distribution System for foodgrain or kerosene or cross subsidy in electricity, there is need for change. Building consensus with states — and in many cases action lies with them — would be central to any forward looking subsidy strategy. This would also moderate action by some states which can jeopardise some limited gains which may have been made by others. • Finally, the whole issue of Centre-state relations. Many of the present structures of consultations were designed at a time when homogeneous governments at the Centre and the states were taken for granted. Heterogeneity of governments, however, raise suspicion of discretion and playing favourites at a time when the political dynamics would deserve financial devolutions to become increasingly formula-driven. States feel that proposals that have serious bearing on them are often decided without adequate consultation. Changes in the political power dynamics deserve innovative approaches on Centre-state dialogue. The National Development Council needs to reinvent itself. Ceremonial meetings are no substitute for more meaningful dialogue.
