Several states have alleged that after abolition of Planning Commission, its fearsome powers have now gone to Finance Ministry, leading to much more centralization. Give your opinion on such allegations.

These allegations had come in 2015-16 and are of temporary nature. The recommendations of the Finance Commission came in December, 2014 and by that time; most states had finalized their budget without even knowing the recommendations of 14th finance commission. After dramatic changes in financial devolution, the governing council had to adopt those changes. However, at that time, the Governing Council and its subgroups were not ready. Thus, for that particular year, the finance ministry decided the central schemes.
Things have changed gradually and now the governing council is meeting at regular intervals. At the same time, it’s true that function of resource allocation, has been shifted to the finance ministry. But Finance Ministry’s role is to decide how the money flows through the individual ministries. The three-year action Plan released by the NITI Aayog will be a key benchmark for the Finance Ministry while allocating resources.

Topics: GS-III: Indian Economy Issues Relating to Planning