Five-Year plans may be scrapped, says NITI Aayog VC Arvind Panagariya

NEW DELHI: The government will do away with five-year plans when the twelfth plan ends in 2016-17, NITI Aayog vice chairman Arvind Panagariya has said, ending two years of uncertainty over the fate of the development plan first initiated by Jawaharlal Nehru in 1951.

While the government has yet to decide on what will replace the five-year plan, Panagariya said one possibility is to introduce some form of medium-term fiscal framework planning.

“Fiscal year 2016-17, which will be the last year of distinction between plan and non-plan budget, coincides — not by accident but by design — with the last year of the 12th Five-Year Plan (2012-17),” he said in a live interaction with public on the intricacies of the Union Budget 2016-17.

According to Panagariya, when the NDA government had come to power the decision was made that the last two years of the 12th plan will be used as transition.

“One direction that seems to be clear is perhaps we will not be doing five-year plan,” he said.

ET had reported in January last year that the government would do away with the tradition of five-year plans after dismantling the Planning Commission and replacing it with NITI Aayog. So what next?

One possibility is to introduce some form of medium-term fiscal framework planning which entails getting some sense of what revenues will look likely over next two-three years and how then resulting expenditure will be allocated to different ministries,” he said. “This could be later rolled up further to try and see that ministries are being able to deliver through an assessment at the end of the year.”

According to Panagariya, NITI Aayog will work as an agency to mediate this because finance ministry deals with finances while other ministries deal with action.

“Somebody who is out of those must do the planning of expenditure and assessment of the delivery and NITI Aayog is the obvious choice,” he said.