What is at stake in 12th Plan: Rebalancing the sequence of words " Faster, More Inclusive, and Sustainable Growth"

Issues for Approach to the 12th Five Year Plan 
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These are the interesting times for Planning Commission. This must be one of the most eagerly awaited moments in the Indian contemporary history as we witness the reports of Full Planning Commission Meeting on 21 April 2011. The Process of Formulating the 12th Plan have been accomodative, reflective on the wishes of the civil society. Even though there are issues about in what sense the term Civil Society has been interpreted. This initiative is significant in terms of very authentic questioning the existence of Planning Commission as extra-constitutional body is gaining ground by each passing day. Bibek Debroy in recent article in India Today says:

        "India's bedrock is the Constitution. Anything not in the Constitution
         should be abolished. The Planning Commission (PC) is an extra-
         Constitutional body. It was set up through executive order in 1950. It has
         no business to exist.

          Second, under the Constitution, public expenditure is scrutinized and
          approved by Parliament. As an extra-Constitutional body, PC is not
          answerable to Parliament. 

          Third, fund-flows to states take place through Finance Commission, PC
          and Central sector and Centrally-sponsored schemes CSS). We have
          diluted Finance Commission mandates since late-1960s and early-
          1970s. Union Finance Commission is the mandated Constitutional body
          for Centre-state transfers and state Finance Commissions for
          intra-state transfers. If Finance Commission's original mandate is
          restored, we won't need fund-flows to states through PC. Discretionary
          transfers to states haven't incentivised reforms in states. Annual Plan
          discussions are a nuisance. In an era of reforms, we need more
          transparency and less discretion. See how backward regions' grant-fund
          has been mis-utilised and special category status for states abused.
          This is an era of decentralization. No one knows the number of Central
          sector schemes and css. They have proliferated since late-1960s. At one
          point, the number was 455. It was pruned to 150, but have proliferated
          again. We were perfectly happy when they didn't exist, before 1960s.
          They impose Centralized templates from above, regardless of local
          conditions. This year's Budget also recognizes the Plan/non-Plan
          distinction as artificial. Even if this distinction goes, as it should, and we
          eliminate CSS, there is no need for PC. 

           Fourth, PC has been unable to push decentralized planning. In terms of
           mindsets, it makes things worse by its unwillingness to do so, as if all
           wisdom is vested from above. Witness the confusion it has created over
           poverty numbers. BPL should be determined through decentralized and
           participatory identification by gram sabhas and urban local bodies. Why
           should pc muddy waters?          

            Fifth, there are plenty of research bodies outside the Government that
           can do research now and produce data. PCs utility inthese is
           questionable. 

            Sixth, it has no imagination. It continues to produce Plan documents
            and  approach papers that are rehashes of First Five YearPlan. There
            was a time when there used to be models for growth emanating from
            PC. That was because PC had the task of directing resource flows. In
            this era of reforms, no one can direct resource allocation. It is
            determined by markets, with a role for the private sector. Several
            regulators and ministries outside PC have been empowered. What role
            can PC have now? Its projections go wrong. Had this occurred outside
            the government, PC would have been wound up long ago. PC was
            supposed to subject itself to a zero-based budgeting (ZBB) exercise,
            reinventing itself and justifying its existence. But nothing has moved.
            All that happens is PC triggers squabbles with other ministries,
            departments and states, often in public.

         
            Seventh, it is a parking spot for retired bureaucrats and failed
           politicians. The intention is not to tap their expertise. They are parked
           there because they will create the least nuisance there. In addition,
           positive affirmation and reservation quotas characterize membership.
           This is true of other commissions too. But what's true of other
           commissions is also true of this. It should be distinguished through an
           act of omission."  

Keeping in mind all the questions raised above, let us take a look at the outcomes of recent Planning Commission meeting chaired by Hon. Prime Minister.

" Eleventh Plan Experience
• GDP growth likely to average 8.2% over 11th Plan: short of the 9%
  target, but remarkable given the global crisis and drought
• In the 10th Plan GDP growth averaged 7.7 %
• We have also seen progress on inclusiveness: Agricultural growth,
  Poverty Reduction, Education, Health, Upliftment of SCs/STs,
  Minorities etc.
• However progress on inclusiveness less than expected. We are likely
  to miss Millennium Development Goals (MDG), except perhaps on
  poverty
• Inflation has accelerated in the last two years
• Current international environment is very uncertain
      Global pressure on food, oil and other commodity prices
      Financial conditions & exchange rates are likely to be volatile due
      to sovereign debt related problems in Europe/US, and readjustment
      of extra-ordinary monetary/fiscal easing

About consultations 
" We have commenced a very wide consultative process on the
  challenges for the 12th Plan
• Over 900 CSOs across the country have participated, as well as many
  industry associations and ‘think tanks’
• Internet being used for first time to reach out to broader community
  including several hundred sectoral experts
• Planning Commission has launched a dedicated website
  http://12thplan.gov.in This site is also linked to Facebook. 32,000
  netizens have visited these two sites and have left many insightful
  comments
• A series of regional consultations with States are planned in May
• Dialogue with other stakeholders continues."

Key Messages from Consultations
• Strong demand from all sectors of society to improve Implementation,
  Accountability and Service Delivery
• Citizens Groups broadly support the stated objectives of existing
  government programmes. However, the design and institutional
  arrangements are weak. Greater devolution and empowerment needed
• Government programmes need a new architecture: greater
  localisation, break-down of silos, feedback from citizens, and
  mechanisms for learning and sharing of best practices
• A major contribution to economic growth now comes from the private
  sector. A policy environment that supports this dynamism is therefore
  important
• Create environment for nurturing enterprise, improving markets,
  supporting innovation, providing access to finance and inculcating
  respect for common pool resources
                                                                       
Twelfth Plan Objectives
• Basic objective : Faster, More Inclusive, and Sustainable Growth
• Is 10% growth feasible? Realistically, even 9% will need strong
  policy action. Could aim at 9.0 to 9.5 percent
• Energy, Water and Environment present major sectoral challenges. Can
  we address them without sacrificing growth?
• Can we find resources to create a world class infrastructure?
• For growth to be more inclusive we need:
        Better performance in agriculture
        Faster creation of jobs, especially in manufacturing
        Stronger efforts at health, education and skill development
        Improve effectiveness of programmes directly aimed at the poor
        Special programmes for socially vulnerable groups
        Special plans for disadvantaged/backward regions
     
Desirable changes                                                        
• Social Mobilisation: People should be active agents of change. Flagship
  programmes need to provide human and financial resources for social
  mobilisation, capacity building and information sharing
• Professionally managed delivery organisations are needed with clear
  mandates and accountability. We need much better mechanisms for
  convergence of government departments on systemic issues
• Devolution can be effective only if the autonomy of PRIs/ULBs is
  increased and their human resource capabilities improved. How can the
  Centre help?
• Mechanisms need to be created at all levels to understand the needs of
  vulnerable sections of the society and inform policy-makers
• Diagnostics of Failure and Mainstreaming of Success: horizontal linkages
  need to be created for exchange of information and best practices
• Institutional mechanisms for conflict resolution, particularly for land and
  water."


Planning Commission has identified 12 challenges for the 12th Plan.
These are:
                  Enhancing capacity for growth
                  Enhancing skills and faster generation of  Employment
                  Environmental and ecological sustainability
                  Decentralization, Empowerment, and Information
                  Technology and innovation
                  Securing the energy future for India
                  Accelerated development of transport infrastructure
                  Rural Transformation and Sustained Growth of Agriculture
                  Managing Urbanization
                  Improved access to Quality Education
                  Better preventive and curative healthcare
                  Economic Turbo Chargers


The list of challenges will not end here but these are broad challenges identified. The elements of challenges must be discussed. Before taking break from this piece let us ponder over what Mihir Sharma from Indian Express said when he wrote a well timed OpEd. He said:

               " Policy-making’s central problem: how the machinery of administration has obsolescence built-in, how it is creakingly failing to adapt to a new and more complex era. Our government is run by generalists. And there’s no chance of that changing any time soon. But now, each ministry and department, state or Central, is expected to try and frame policy with market-supporting, quick-reacting precision. Much blunter instruments — licences, restrictions, diktats of one sort or another — are out. The economy is an even denser tangle of 

connections than the one that planners in the ’50s tried to reduce to a large matrix of inputs and outputs. 

                      There’s a lot of talent in government. But everybody knows they can’t    handle this transition alone. Nor should they, many would argue. Policy possibilities that aren’t culled from a broad base of experiences will be too limited. And if you have just tenured employees analysing alternatives, you build in bias towards rigidity and conservatism. We don’t need a statutory body wasting its time predicting how much   steel we will need in five years. We do know what we need: an institution capable of providing genuinely independent, non-partisan ideas — yet ones that engage with the human and political aspects of the economy, rather than sterile accounting aspects of it. 

                  The biggest barriers to increasing and deepening growth, and freedom, today are political. Advice that pretends they don’t exist has little value. Where would this advice come from? Our political parties don’t debate and develop policy ideas. We don’t have a culture of think-tanks, nor does one look like developing. Universities have other reform priorities. Journalists can’t do everything. No, government itself will need to nurture and grow independent — and persuasive — sources for policy prescriptions and recommendations.Nehru’s Planning Commission was supposed to help the state be the vanguard of the economy, to provide disinterested instructions to an activist government. Now, instead, a retreating government needs the Commission, or something very like it, to be the vanguard." 

 I think, possibilities of confusion have now evaporated. 

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Fukushima Nuclear Accident Update Log

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What has changed ? From Science Policy Resolution to Decade of Innovation ?

Approaching 12^th Plan for S&T Sector in the context of Innovation Decade 2010-2020

The growing relative importance of the knowledge as a variable of production factor compared to capital, labor and physical resources has been recognized globally. At the same time it should be understood that knowledge is being created, diffused and absorbed linking global and local actors. This is giving birth to new Glocalisation Policies as far as investment in S&T/R&D/Innovation is concerned. R&D activities are increasingly mobile and globally connected. While the significance allocated to the accessibility of codified knowledge through ICT enabled network to improve the efficiency of the research being done is crucial building block of the S&T policy framework at the same time the importance of the institutions which can tap the tacit knowledge from the experts working in those fields gives additional value and leverage to this policy planning institutions to think in new directions compared to stagnated silos.

Policy should give primacy to the non-linear systemic view to look towards progress/innovation rather than judging the changing world through the prism of linear perspectives. So, creating a mesh or embedding a layer of lateral thinking in the communication within the stakeholders of policy planners should be the priority. More time should be given to learn from the studies done around capability to exploit new combinations or of pieces of knowledge is essential. Special attention should be given towards the fact that innovation rests on learning and creativity. Also, it should be realized that innovation happens through interaction amongst firms and other agents.

The knowledge used for innovation may be firm specific among which large part us private proprietary knowledge and tacit. Sectoral or technology specific knowledge may be public, codified and tacit. And generic science based knowledge may be public, open access and codified.  In today’s world where distributed knowledge base, the implications it may have for the planning of S&T policies have to be visualized for our better understanding. The kind of diversity of organizations involved in the chain of knowledge creation, diffusion and absorption; resources needed for diffusion considering the limitations imposed by IPRs; importance of local and global access capabilities, flexibilities provided by policies for experimentation, creativity and entrepreneurship and room for innovation without the traditional inputs being given too much emphasis; these are some of the factors which should be accounted for adjusting to the dynamic scenarios of S&T policy making.

The system perspective offers the holistic perspective where whole is greater than sum of its parts, where interrelationships and interactions are more important and includes norms, habits and culture of organizations and institutions. Here most important resource is knowledge and most important process is learning. Understanding the diversity of the performance of the organizations involved needs to be taken into consideration in the context of a) Enhancing the capacities to access and use distributed knowledge base, b) Quality of infrastructure supporting knowledge flows, c) Institutional strategies and link bases. In this perspective moving towards learning organization would be the right step. This step implies: a) Internal changes promoting flat hierarchies, devolution of responsibilities, multi-functional teams, new cross linking competencies, emphasis on quality management and human resource development. So shifts are expected from ‘raising resources’ to ‘promoting change’, from ‘best practices’ towards ‘context specific’ solutions, from ‘standard’ policy making towards ‘policy learning process’.  

The changing framework of innovation makes it compulsory to understand that innovation significantly differs from R&D. R&D indicators leave out many unmeasured sources of innovative activity. This is crucial in the context of the increasing awareness of the role of innovation as a non-negotiable ingredient for economic development. In this changing scenario along with the understanding of the systemic actors, emphasis on learning, diffusion and absorption of knowledge is very crucial. So, mobility of tacit knowledge becomes key performance factor.

Traditional policy was viewed in the framework of innovation being only in the terms of R&D; focus on research and technology development, technology transfer mechanisms and institutions created for that purpose, institutions for knowledge creation and diffusion. The shift in learning gained from the traditional approaches has given new insights into the new directions in which the attention needs to be focused. Now innovation must be understood in terms of economic exploitation of new combinations by including broad set of activities including design, organizational, behavioral etc. More attention is necessary to be given for how process of absorption of knowledge is taking place and how to strengthen the absorptive capacity.

S&T/Innovation Policy seems to be dominated by linear tools addressing inputs in the innovation process rather than functioning of the system involved. This system involves actors like R&D institutions, higher education institutions, universities, industry, MSMEs, government think tanks, corporate initiatives, policy bodies, market driven strategies etc. The problem became more serious when individual isolated actors were supported rather than identifying networks of the actors. Therefore policy instruments necessary and addressed to changes in behavior for innovation dealing with strategic, informational, organizational requirements or real time need. So, there is lack of strategic approach in the system.

So challenge for R&D/Innovation policy is to organize complementarities and synergies between policy areas by designing effective policy mixes. Defining this policy mix remains the pivotal task before approaching any strategic plan of S&T/Innovation scene ahead. There should be proper combination of policy instruments which interact to influence the quantity and quality of R&D investments in public and private sectors. The instruments are categorized by all programmes, organizations, rules and regulations with an active involvement of the public sector, which intentionally or unintentionally affect R&D investment.Interactions are carved out by influence of one policy instrument continuously being modified by co-existence of other policy instruments in policy mix. Influences on R&D investments are either direct originating from R&D policy field or may be indirect coming out of all policy instruments from any other policy field.

Here few relevant issues must be probed and explored about how this policy mix should be designed.

a) Challenges for National Innovation System/Sectoral Innovation 

    System/Regional Innovation System

b) Policy objectives

c) Gaps between challenges and objectives

d) Instruments (both R&D and Non-R&D)

e) Gaps between objectives and instruments

f) History of the policy in that perspective

g) Identification and location of the actors involved

h) Balances within the policy portfolio

i) Modes and ways of interactions

j) Governance framework

Considering all these factors the emphasis should be on building on the clusters of the competence. These clusters will be responsible for dialogue creation, multilateral exchanges, establishing a capable nodal point, creating mechanism which will be responsible for multiple supports, consistent process of evolution of learning support etc and reduce the repetition of the experiments and inculcate the sense of sharing of experiences in order to achieve maximum possibility of arriving at a plan which can be workable and enabling all to contribute in that.

So, policy mix design has to be derived from acknowledging the stakeholders pressure, considering the international/successful/contextual benchmarking, learning from previous policy implementation, method of policy evaluation and thus moving towards defining, articulating the policy strategies. There are always present the competing rationalities across policy fields and different schools of thoughts, short termism in resource allocations, new public management and coherence in all the initiatives and finally individual ambitions verses grand vision.

Thus the success of new policies and initiatives depend on ability of the new institutions in creating new knowledge, the ability of prospective framework of institutions in diffusion of knowledge and the topology of the elements of the network enabling them for better absorption. The directives under policy need to have “open borders” between traditional fields of policy intervention, various forms of knowledge production and diffusion and the evolution of industry experience in dealing with the new and old problems. So, defining new strategic policy intelligence where monitoring and evaluation of the approach of the policy and responses coming from the stakeholders from time to time, need of sound analysis of the structural and informal issues in congruence and keeping in mind the long term vision and also being committed to inclusive policy design processes.

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