MacroScan (Printable Version) - Foreign Fingers in the Planning Commission

Most people in the country - and certainly those who have some opinion in the matter - would probably say that the Planning Commission of the Government of India has yet to embark on its work. The formulation of the next Plan is of course still far distant, but the even mid-term appraisal of the current Plan has barely begun.

The more difficult process, of incorporating the declared aims of the government (as expressed in the National Common Minimum Programme) into the Plan, is thus still quite hazy. So far, even the direction of this process is not very clear, at least from the public pronouncements made by the Deputy Chairman. Clearly, the real efforts of the Commission are only just beginning and there is a great deal to be done.

Yet even before any substantive momentum has been achieved, the Planning Commission has become embroiled in a controversy which at first sight may seem like a non-issue, but has had substantial media and political fallout, and may reduce its subsequent credibility. It has generated a debate over whether representatives of multilateral donor agencies such as the World Bank and employees of private multinational consultancy agencies should be included in Committees constituted by the Planning Commission.

The controversy began when it was announced that some Consultative Committees set up by the Planning Commission to provide inputs into the Mid-Term Appraisal would include not only a range of outside experts, but also representatives of external donor agencies such as the World Bank and the Asian Development Bank, along with employees of consultancy companies such as McKinsey and Boston Consulting.

It also became evident that such persons had been invited to be on the Committees not in their personal capacity (which in any case, would be problematic as long as they remained representatives of these institutions) but because they belonged to these agencies, specifically in order to ascertain the views of these agencies on programmes and policies in which they have an interest.

This was the first time in the history of the Planning Commission that such elements were invited to be part of Committees specially set up by the Commission. The subsequent outcry focussed on a number of problems with such inclusion, ranging from the argument that this reflected not only intellectual subservience to the feeling that this suggested a bankruptcy of national talent in this regard.

The initial reply provided by the Deputy Chairman did little to rectify matters, since the justification provided was essentially based on the facts that only 4 of the 19 Committees that had been constituted had such members; that these agencies already gave large loans to India; and that Mahatma Gandhi's famous remark about ''keeping doors and windows open'' could be applied to this case.

As the controversy continued, various leaders of the Left political parties also made statements against this move, but the Planning Commission remained adamant on this score. In the process, several things became apparent, all of which underline the complexity of the current political economy of the country.

The reaction of the mainstream English-language media was telling. This was more or less unanimous (with a few notable exceptions) in supporting the views of the Deputy Chairman of the Planning Commission and criticising the Left for being churlish on the matter. Most of the commentaries missed the basic point of the objections, as elaborated below. But in addition, they appeared to be more obsessed with highlighting differences between the Left and the government in this matter, and to even predict collapse of the UPA government. In the process, they not only presented a misleading picture of the actual issues at stake, but also used this relatively minor matter to stoke more fundamental differences.

Let us consider the actual implications of having these agencies represented in government committees. The Planning Commission argued that since the World Bank and the ADB are already actively involved in financing programmes of the Central and State Governments in several areas, this would provide an opportunity for them to share perceptions on programmes and policies in which they have been involved in an open forum, which would include others who have a different orientation and could express their disagreement. But there are several problems with this argument.

First, it is difficult to believe that these agencies could provide sound and dispassionate judgement on economic policies on which they are well-known to have very specific (and remarkably unchanging) views. Indeed, in the Indian context, the often injudicious policy advice provided by these institutions in the recent past is only too apparent. The former leaders of state governments of Andhra Pradesh, Karnataka and Madhya Pradesh (to take only three examples) should be able to testify to the adverse role of their advice.

Second, even if these views need to be heard, there is a substantial difference between requesting them to provide their opinions formally in a separate context, and providing them with a different degree of legitimacy as ‘independent'' outside experts on par with others who are genuinely independent. This provides these institutions a platform to present their views in a manner which bears the imprimatur of the Planning Commission.

The significance of this should not be underestimated. There is no question that the Planning Commission must listen to a range of views, but this should not involve simple replication of the patterns of the debating societies of the undergraduate colleges that produced both some of the current incumbents of this Commission as well as some of its critics. The Planning Commission is, above all, an organ of the Indian state - and within that, an institution with a long and proud history of nationalist endeavour. It must therefore preserve the essential identity of the Indian state: to represent and be seen to represent the Indian people.

It was within a nationalist umbrella that the Planning Commission under Nehru and Mahalanobis invited foreign economists and statisticians to assist in the process of nascent Indian planning. They were chosen not because they were representatives of donor agencies but because of their established individual expertise. All of them were eminent economists usually based in universities abroad. The issue therefore is not of ''foreignness'' per se but of preventing the intrusion into the Indian state of elements which are effectively controlled by foreign states (and particularly the US).

It is in this context that the argument that such donor agencies in any case make inputs into the decision-making process ''informally'' and that therefore it is better to induct them formally into Committees, makes little sense. Of course, governments have to deal routinely with international donor agencies and even foreign-based consultancies with very different interests. But doing business is quite different from legitimising their inclusion into officially constituted bodies of the Indian State.

The inability to see this basic distinction reflects a blurring of vision which has come about not because of some abstract ''globalisation'' but because of a blurring of interests of a section of the Indian elite with the interests of imperialism, and a consequent lack of recognition that this does not necessarily contribute to the well-being or even reflect the desires of the majority of the Indian population.

The real significance of this debate therefore has less to do with the immediate and relatively less critical matter of the number of such elements included in these committees and the like. It is ultimately about the control over the Indian state, and the official recognition that the organs of the state must represent the Indian people.

The blurring of interests among the section of the domestic elite and imperialism is a matter of serious concern. It is important not only in a general structural sense, but at this historical moment in particular, because it affects government policy at a critical conjuncture. There was a political and economic policy message of the recent elections - on which the very existence of this government is based - that cannot be ignored.

The previous government had used the advice of agencies such as the World Bank and foreign consultants, even though they were not incorporated into bodies constituted by the government, to intensify a programme of neo-liberal economic policies. This was rejected decisively by the electorate. The new UPA government officially declared its intention to change course, to reverse or mitigate the effects of several of these policies and to provide material relief to the people by addressing the problems of agrarian crisis and unemployment in particular.

A basic mandate of the present Planning Commission is therefore to re-examine past policy. But this cannot be done if the official attitude appears to institutionalise and internalise the status of the same foreign policy advice that needs to be re-examined. Perhaps the insistence on having such people remain in Committees despite all the protests is an unwilling recognition of the changed politico-economic reality, reflecting a feeling of insecurity that without such people involved, the previous arguments will not be expressed with much force. But that is essentially tilting against a political windmill.

Perhaps the most glaring evidence of this comes from Andhra Pradesh, which until recently had a state government that was following every neo-liberal tenet to the letter and completely adhering to the policy advice dispensed by the World Bank and other donor agencies. This state experienced a political earthquake, comprehensively defeating that government. As a result, Andhra Pradesh has contributed more MPs to the Congress Party at the centre, than any other state. Without this earthquake, there would be no UPA government.

The new Congress government in Andhra Pradesh has squarely laid the blame for the enormous agrarian crisis in the state on the World Bank-inspired policies which continue to cause so much damage to ordinary people. In order to arrest the appalling trend of farmers' suicides and generalised rural distress, it has called for major reversal of these policies.

It would be laughable if, in this context, the state government of Andhra Pradesh had approached representatives of the World Bank for further advice on how to undo the damage caused. But in fact it should be an equally laughable notion for the central government, for which many of the basic realities are similar. The fact that this still not realised, is an indication of the extent of political ignorance of some of the current leadership.



Themes > Current Issues	28.09.2004


Foreign Fingers in the Planning Commission

Jayati Ghosh

Most people in the country - and certainly those who have some opinion in the matter - would probably say that the Planning Commission of the Government of India has yet to embark on its work. The formulation of the next Plan is of course still far distant, but the even mid-term appraisal of the current Plan has barely begun. The more difficult process, of incorporating the declared aims of the government (as expressed in the National Common Minimum Programme) into the Plan, is thus still quite hazy. So far, even the direction of this process is not very clear, at least from the public pronouncements made by the Deputy Chairman. Clearly, the real efforts of the Commission are only just beginning and there is a great deal to be done. Yet even before any substantive momentum has been achieved, the Planning Commission has become embroiled in a controversy which at first sight may seem like a non-issue, but has had substantial media and political fallout, and may reduce its subsequent credibility. It has generated a debate over whether representatives of multilateral donor agencies such as the World Bank and employees of private multinational consultancy agencies should be included in Committees constituted by the Planning Commission. The controversy began when it was announced that some Consultative Committees set up by the Planning Commission to provide inputs into the Mid-Term Appraisal would include not only a range of outside experts, but also representatives of external donor agencies such as the World Bank and the Asian Development Bank, along with employees of consultancy companies such as McKinsey and Boston Consulting. It also became evident that such persons had been invited to be on the Committees not in their personal capacity (which in any case, would be problematic as long as they remained representatives of these institutions) but because they belonged to these agencies, specifically in order to ascertain the views of these agencies on programmes and policies in which they have an interest. This was the first time in the history of the Planning Commission that such elements were invited to be part of Committees specially set up by the Commission. The subsequent outcry focussed on a number of problems with such inclusion, ranging from the argument that this reflected not only intellectual subservience to the feeling that this suggested a bankruptcy of national talent in this regard. The initial reply provided by the Deputy Chairman did little to rectify matters, since the justification provided was essentially based on the facts that only 4 of the 19 Committees that had been constituted had such members; that these agencies already gave large loans to India; and that Mahatma Gandhi's famous remark about ''keeping doors and windows open'' could be applied to this case. As the controversy continued, various leaders of the Left political parties also made statements against this move, but the Planning Commission remained adamant on this score. In the process, several things became apparent, all of which underline the complexity of the current political economy of the country. The reaction of the mainstream English-language media was telling. This was more or less unanimous (with a few notable exceptions) in supporting the views of the Deputy Chairman of the Planning Commission and criticising the Left for being churlish on the matter. Most of the commentaries missed the basic point of the objections, as elaborated below. But in addition, they appeared to be more obsessed with highlighting differences between the Left and the government in this matter, and to even predict collapse of the UPA government. In the process, they not only presented a misleading picture of the actual issues at stake, but also used this relatively minor matter to stoke more fundamental differences. Let us consider the actual implications of having these agencies represented in government committees. The Planning Commission argued that since the World Bank and the ADB are already actively involved in financing programmes of the Central and State Governments in several areas, this would provide an opportunity for them to share perceptions on programmes and policies in which they have been involved in an open forum, which would include others who have a different orientation and could express their disagreement. But there are several problems with this argument. First, it is difficult to believe that these agencies could provide sound and dispassionate judgement on economic policies on which they are well-known to have very specific (and remarkably unchanging) views. Indeed, in the Indian context, the often injudicious policy advice provided by these institutions in the recent past is only too apparent. The former leaders of state governments of Andhra Pradesh, Karnataka and Madhya Pradesh (to take only three examples) should be able to testify to the adverse role of their advice. Second, even if these views need to be heard, there is a substantial difference between requesting them to provide their opinions formally in a separate context, and providing them with a different degree of legitimacy as ‘independent'' outside experts on par with others who are genuinely independent. This provides these institutions a platform to present their views in a manner which bears the imprimatur of the Planning Commission. The significance of this should not be underestimated. There is no question that the Planning Commission must listen to a range of views, but this should not involve simple replication of the patterns of the debating societies of the undergraduate colleges that produced both some of the current incumbents of this Commission as well as some of its critics. The Planning Commission is, above all, an organ of the Indian state - and within that, an institution with a long and proud history of nationalist endeavour. It must therefore preserve the essential identity of the Indian state: to represent and be seen to represent the Indian people. It was within a nationalist umbrella that the Planning Commission under Nehru and Mahalanobis invited foreign economists and statisticians to assist in the process of nascent Indian planning. They were chosen not because they were representatives of donor agencies but because of their established individual expertise. All of them were eminent economists usually based in universities abroad. The issue therefore is not of ''foreignness'' per se but of preventing the intrusion into the Indian state of elements which are effectively controlled by foreign states (and particularly the US). It is in this context that the argument that such donor agencies in any case make inputs into the decision-making process ''informally'' and that therefore it is better to induct them formally into Committees, makes little sense. Of course, governments have to deal routinely with international donor agencies and even foreign-based consultancies with very different interests. But doing business is quite different from legitimising their inclusion into officially constituted bodies of the Indian State. The inability to see this basic distinction reflects a blurring of vision which has come about not because of some abstract ''globalisation'' but because of a blurring of interests of a section of the Indian elite with the interests of imperialism, and a consequent lack of recognition that this does not necessarily contribute to the well-being or even reflect the desires of the majority of the Indian population. The real significance of this debate therefore has less to do with the immediate and relatively less critical matter of the number of such elements included in these committees and the like. It is ultimately about the control over the Indian state, and the official recognition that the organs of the state must represent the Indian people. The blurring of interests among the section of the domestic elite and imperialism is a matter of serious concern. It is important not only in a general structural sense, but at this historical moment in particular, because it affects government policy at a critical conjuncture. There was a political and economic policy message of the recent elections - on which the very existence of this government is based - that cannot be ignored. The previous government had used the advice of agencies such as the World Bank and foreign consultants, even though they were not incorporated into bodies constituted by the government, to intensify a programme of neo-liberal economic policies. This was rejected decisively by the electorate. The new UPA government officially declared its intention to change course, to reverse or mitigate the effects of several of these policies and to provide material relief to the people by addressing the problems of agrarian crisis and unemployment in particular. A basic mandate of the present Planning Commission is therefore to re-examine past policy. But this cannot be done if the official attitude appears to institutionalise and internalise the status of the same foreign policy advice that needs to be re-examined. Perhaps the insistence on having such people remain in Committees despite all the protests is an unwilling recognition of the changed politico-economic reality, reflecting a feeling of insecurity that without such people involved, the previous arguments will not be expressed with much force. But that is essentially tilting against a political windmill. Perhaps the most glaring evidence of this comes from Andhra Pradesh, which until recently had a state government that was following every neo-liberal tenet to the letter and completely adhering to the policy advice dispensed by the World Bank and other donor agencies. This state experienced a political earthquake, comprehensively defeating that government. As a result, Andhra Pradesh has contributed more MPs to the Congress Party at the centre, than any other state. Without this earthquake, there would be no UPA government. The new Congress government in Andhra Pradesh has squarely laid the blame for the enormous agrarian crisis in the state on the World Bank-inspired policies which continue to cause so much damage to ordinary people. In order to arrest the appalling trend of farmers' suicides and generalised rural distress, it has called for major reversal of these policies. It would be laughable if, in this context, the state government of Andhra Pradesh had approached representatives of the World Bank for further advice on how to undo the damage caused. But in fact it should be an equally laughable notion for the central government, for which many of the basic realities are similar. The fact that this still not realised, is an indication of the extent of political ignorance of some of the current leadership.



© MACROSCAN 2004