Merger of Planning with Finance Department

H C Katoch

It is a historic decision that is taken under Governor’s rule to join the Planning with Finance Department. This administrative decision is learnt to have been taken to save time for decision making for different issues particularly for conveying the approvals both Finance and Planning Departments that involves movement of files and suffer from administrative hassles. It ensures cutting inordinate delays in developmental activities. The required concurrence of Planning and Finance will be under one Head of both the Departments. The creation of Planning Department dates back to the year 1952 when the first Plan was prepared for the period 1952-57. If we go back to the era of planning process, USSR conceived 7 year plan period and our country preferred to keep it only for 5 years. While the other countries of the world had opted for Capitalism and Communism to base their economies for planned development, our country made a mix of these two economic concepts and adopted mixed economy. If we trace back to the planned economic development, it was the first plan prepared by Government of India with deficit financing of Rs. 500 crores. Our First Five year plan was Rs. 11 crores only. This plan focused on Agricultural development as we were importing wheat under PL 480 from United States of America. Our agriculture out put started accelerating and finally we dispensed with import from USA. The second Plan fixed deficit funding of Rs.1200 crores and it was focused on growth of Industry. The third plan deficit was increased to Rs.4800 crores to develop Power sector. The economy could not absorb this deficit and prices started rising. Thus to run the economy background of economic is very essential. This differentiates the functions of the Finance and Planning Departments. When we see in the context of economic development, it is the planning process that considers economic parameters and frame strategy and approach for the increased output in every sector of the economy. The Planning process at Block level where we have planning cadre apparatus to carry forward this developmental process is a landmark in the history of our state to address the localized issues of development. Thus planning is a huge cadre with vision of development using its parameters that have been developed over the years of over 6 decades and more. Our unit of development would further go down to village level in due course of time and that will be the last goal of economic development.
As regards Finance Department, the cadre is well trained in accounting system and knows well to apply the financial procedure as contained in the books like financial code and other allied books on financial rules and regulations, but have no base to apply economic parameters or make economic analysis as is done by the cadre of the statistics and economic department. If we see the different wings of economics and statistics department that look after analysis of states economy like preparation of State/District Gross/Net Domestic Product estimates, evaluation of schemes, and project appraisal or conducting of economic survey and other numerous functions like price index that are directly connected to state’s economy are unique for any other development Department including Finance Department. Planning Department is the mother of all the Departments of the State. Even study of the digest of Statistics tells us about many indicators that are directly related to our planned economic development. It is different issue how far the approach papers prepared are really put into practice.
I had the privilege to be a part of working group for preparation of approach paper for 11th Five Year plan, and later on to participate as delegate in the Chief Minister’s team in the Planning Commission at that time where we had direct interaction with Montek Ahulwalia the then Deputy Chairman Planning Commission Government of India where issues concerning the economy of our state were discussed and I could discuss the crucial social issue of effect of armed conflict in our State where numerous children were affected and need of Psychatric Hospitals was raised. Similarly on other developmental activities, we could highlight the economic perspective of our state.
The cadre of economics and statistics comprises postgraduates in the discipline of economics, commerce and statistics and now computers trained who have the capacity to understand and undertake different assignments. Finance department cadre has only the knowledge of the printed laws, books and procedures etc. The identity of the economics and statistics cadre with varied functions is unique. Management of this cadre under Finance department would hit the uniqueness and may demoralize them. However, when the Government has taken the decision and still in the process of implementation, it is suggested that good exercise has to be done to allot functions not purely on administrative grounds, but on technical and professional line to do justice to the cadre of economics and statistics. The planning and development cadre may be not made subservient to the finance department by eroding its basic structure and powers. However, the administrative head of Finance Department could be Commissioner/Secretary Planning and Finance assisted by two Advisors of a) Planning and b) Finance at Apex level who will be looking after Planning Cadre and Finance cadre respectively and finally reporting to the Commissioner/ Secretary Planning and Finance.
(The author is former Director
Planning J&K Government)


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