New Delhi: Prime Minister Narendra Modi said a new institution will replace the 64-year-old Planning Commission, of which he is chairman, since it had outlived its utility today.
"In a short time, we will initiate a new institution that will work in the place of the Planning Commission," Modi said in his maiden speech from the Red Fort on Independence Day.
"A new institution with a new spirit," is what he promised, in line with the recommendations made by an international committee set up by the plan panel itself. Indications are that such an institution will be a think tank.
Being a former chief minister who had to himself knock on the doors of the commission for money, Modi said the importance of federalism in India was increasing and institutions must address this reality.
"This is a good thing (growing import of federal structure). We have to strengthen it," he said, adding:
"Today, the times have changed from the era when Planning Commission was created."
The announcement was received with a positive spirit by the industry.
"Creative thinking is required for building a new India with public private partnership and optimum utilisation of resources and power to the states," the Confederation of Indian Industry said.
But the Congress party slammed it. "This appears to be an attempt to centralise powers in the hands of one individual," said senior leader and former minister Ghulam Nabi Azad.
The commission was set up to deliver on the Directive Principles of State Policy of the Constitution, which calls for people's welfare by securing and protecting a social order with justice and equity.
India's first prime minister Jawaharlal Nehru thought this can be best addressed with a plan economy with goals set over five years.
Formed by a resolution of the Government of India March 15, 1950, the commission started presenting the Five Year Plans from 1951 -- disrupted a few times by the India-Pakistan war and drought.
Currently, the panel is overseeing the 12th such plan, 2012-17.
Prime Minister Nehru was its first chairman, with Gulzarilal Nanda as the deputy and V.T. Krishnamachari, Chintaman Deshmukh, G. L. Mehta and R.K. Patil as members.
According to officials in the know, Modi never had much of a regard for the commission and considered it a relic of the command economy that India tried to emulate from the then Soviet era.
Several states have complained that the plan panel, which more or less approves their annual plans, misuses its discretionary powers, even acting taking biased politically-motivated decisions.
The panel's redundancy was also the conclusion of the Independent Evaluation Office set up by the commission itself under Ajay Chibber, a Stanford-educated former assistant secretary general of the United Nations.
"It is clear the Planning Commission in its current form and function is a hindrance and not a help to India's development," said the report which became quite controversial as some said it had exceeded its brief.