The Planning Commission has recently announced its intention to prepare two documents – Vision 2025 and the 11th Five Year Plan. Plans have also been announced to strengthen the organization by increasing the number of members from the already large number of 9 to 12. With the devolution of a large number of subjects to the Provinces since the 18th Amendment, the deletion of the subject of national planning from the exclusive domain of the Federal Government, and the placing of the National Economic Council (NEC) in the list of subjects mandated to be the joint responsibility of the Federal Government and the Provincial Governments, these moves raise fears of recentralization and reopening of settled issues. On their part, the Provinces have not helped matters by neglecting the enhancement of their capacity to plan and implement, mobilize greater Provincial resources and the effective and judicious utilization of a higher share of resources made available by the 7th NFC award. Centralized planning was an important factor in the partition of the country in 1971. In this regard, Federal activism and Provincial inaction does not augur well for national cohesion.

Do we need a centralized Planning Commission?

After the 18th Amendment, the Planning Commission can no more be a centralized body.  Federal Legislative List, Part I, contains subjects which lie in the exclusive jurisdiction of the Federal Government. Before the 18th Amendment, item 32 of this related to planning – “National planning and national economic coordination including planning and coordination of scientific and technological research.” After the Amendment, the subject was included in    the Federal Legislative List, Part II. The last-mentioned List of subjects is neither exclusively federal nor provincial; it is an area of joint responsibility. In the Constitution, a special institution, the Council of Common Interests (CCI), has been created to supervise the affairs of the Federation listed in Part II of the Federal Legislative List. Article 154 (1) states: “The Council shall formulate and regulate policies in relation to matters in Part II of the Federal Legislative List and shall exercise supervision and control over related institutions.”

With the subject of planning falling in the Federal List, Part I, before the 18th Amendment, the CCI could not “exercise supervision and control over related institutions”, which are the National Economic Council and the Planning Commission. The institution of the National Economic Council (NEC) had existed before the adoption of a new, federal Constitution in 1973. It was the highest decision making body concerned with the economy and development planning. An authoritarian president headed the NEC as well as the Planning Commission (PC). The latter was a powerful organization charged with the responsibility of preparing centrally controlled plans and the former was the approval forum for these plans. Provinces were represented on the NEC as well as the Planning Commission. After 1973, planning and the Planning Commission continued to be centralized, although the plans were focused mainly on the public sector and planning for the private sector became indicative. This has radically changed after the 18th Amendment.  Centralized planning and the Planning Commission are against the spirit of the Constitution.

     Federalizing planning

Planning, in the post-18th Amendment period has to be federalized rather than centralized. The Amendment has redefined the NEC on the pattern of CCI. The NEC forms part of the Chapter 3 of the Constitution entitled Special Provisions. Before the 18th Amendment, Article 156 related to the NEC had two clauses. Clause (1) described the composition and the Clause (2) its functions. These clauses have undergone important changes after the 18th Amendment. The pre-Amendment Clause (1) read as follows:

 “The President shall constitute a National Economic Council consisting of the Prime Minister, who shall be its Chairman, and such other members as the President may determine:

Provided that the President shall nominate one member from each Province on the recommendation of the Government of that Province.”

The size and composition was left to the discretion of the Prime Minister and the Provincial Governments. In 2005, for instance, the Federal Government had 25 ministers as member in addition to the Prime Minister as Chairman. Each Province was allowed four members including the Chief Minister. In all, there were 42 members. In addition, there was a long list of Special Invitees. Clause (1) has now been made tighter:

“The President shall constitute a National Economic Council which shall consist of –

(a) the Prime Minister, who shall be the Chairman of the Council;

(b) the Chief Ministers and one member from each Province to be nominated by the

      Chief Minister; and

(c) four other members as the Prime Minister may nominate from time to time.”

There is a significantly reduced strength fixed at 13 members. Unlike the past, the Provinces have a majority with 8 members against five from the Federal Government, including of course the Prime Minister as Chairman.

While the apex planning body, the NEC, has been federalized, Planning Commission continues to be centralized. The spirit of the Constitution can be satisfied by (1) making Planning Commission, in place of the Cabinet Division, the Secretariat of the NEC and (2) by reducing the number of its members to five, one each from the Provinces and the Federal Government. Prime Minister chairs the NEC and there is no need for him to Chair the Planning Commission. The Chairman should be appointed by the CCI to represent the Federation.

PIDE as a think tank of the federal government

Pakistan Institute of Development Economics (PIDE) is now a University under the administrative control of the Planning and Development Division. With Planning Commission moving to the CCI/NEC, the Planning and Development Division can continue to deal with the development issues of the Federal Legislative List, Part I. PIDE can play the role of a think-tank for the Planning and Development Division.

Restructuring the planning mechanisms in the provinces

At present, only Punjab has a Planning and Development Board, with members in charge of the main sectors. Other provinces have their respective Planning and Development Departments. An important reason why the centralized role of planning and the Planning Commission continues, is the weak capacity of the provincial planning mechanisms. The devolution under the 18th amendment has overwhelmed them with the large segments of education and health left with the Federal Government highlighting this point. The message of the 18th amendment is that the provinces should take charge of their own planning and development. This needs de-bureaucratization and appropriate investment in human capital.

[Dr. Pervez Tahir is a renowned Pakistani Economist and has served as the Chief Economist with the Planning Commission]