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Seeking to strengthen cooperative federalism, Prime Minister Narendra Modi on Sunday said that states must have a greater role in the new body which will replace the existing Planning Commission.

The process of policy planning also has to change from “top to bottom” and “bottom to top”, he said, stressing that it was impossible for the nation to develop unless states develop.

Modi said this in his remarks at the meeting with Chief Ministers, convened to discuss the structure of the new body which would replace the Planning Commission.

Modi said the replacement to the Planning Commission must incorporate the concept of "Team India". (Source: PTI)

The meeting was attended by Home Minister Rajnath Singh, Finance Minister Arun Jaitley and chief ministers with the exception of West Bengal Chief Minister Mamata Banerjee and J&K Chief Minister Omar Abdullah.

Modi said the replacement to the Planning Commission must incorporate the concept of “Team India”, which according to him, was a combination of three teams – the Prime Minister and Chief Ministers; the Union Council of Ministers; and the bureaucracy in the Centre and states.

The states should have a key role in the new body, Modi said, adding “states sometimes feel there is no platform to express their views… there should be an effective mechanism to address inter-state disputes.”

“Can we develop a new mechanism, that plans according to India’s strengths, empowers states, and brings on board all economic activity, including that which happens outside the government,” the Prime Minister asked, as he set the tone for the discussion.

Later, Modi described the meeting as “fruitful” saying that all Chief Ministers had offered significant suggestions.

Recalling the remarks of former Prime Minister Manmohan Singh, who was associated for a long time with the Planning Commission, he said Singh himself had noted that the body has no futuristic vision in the post-reform period.

Singh, he added, also wanted the Planning Commission to reinvent itself to remain more effective and relevant in the present situation.

The Chief Ministers could be included in the body on rotation basis and the states could be given liberty to spend funds according to their needs.

Finance Minister Arun Jaitley, while briefing the media on the deliberations of the meeting, said no time-line has been fixed, saying the Centre will take a “considered view after consultations are over”.

However, there were indications that the shape of the new structure could be firmed by January 26 next year.

At the meeting, Congress-ruled states supported the idea of revamping the Planning Commission set up by Jawaharlal Nehru in 1950 but disfavoured its scrapping as they felt it can be “evolved”.

However, some NDA states and those ruled by parties like AIADMK and TRS wanted immediate disbanding of the Planning Commission.

The meeting deliberated particularly on four aspects like the fate of five-year plan system, annual plans, the flow of funds from the Centre to states as per current practice.

The 12th Five Year Plan (2012-17) is already mid-way and questions were raised at the meeting whether it could continue or not, said the Finance Minister after the formal meeting and ‘retreat’ where consultations were held between the Prime Minister and Chief Ministers without officials.

The role of knowledge institution and think-tanks in the new body was also discussed thoroughly, amid Modi’s keenness to involve technocrats and experts in such an institution.

Thrust was laid on this aspect as it will enable the role of private sector in planning and policy making.

“Changes were favoured by almost all. But there was a question whether the present structure should evolve or a new structure should be created,” Jaitley said.

He said 3-4 Chief Ministers wanted the current structure to evolve. Asked whether they were from Congress-ruled states, he replied: “You guessed it correctly.”

The Prime Minister told the meeting that the process of policy planning needs to change from “top to bottom” to “bottom to top” while stressing that it was impossible for the nation to develop unless states develop.

Invoking the spirit of “co-operative federalism”, the Prime Minister said that the current global scenario offered a chance for India to take a big leap forward.

This, he added, was possible by formulating a suitable replacement to the Commission with a view to suitably harnessing the strengths of the country.

The Prime Minister said the question of role, relevance and restructuring of the Planning Commission had been repeatedly questioned for more than two decades.