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The National Development Council (NDC) was set up on August 6, 1952 by a Resolution59 issued from the Cabinet Secretariat. The first Plan recommended its formation with a very concise and suitable observation:
“In a country of the size of India where the states have under the
constitution full autonomy within their own sphere of duties, it is necessary to have a forum such as a National Development Council at which, from time to time, the Prime Minister of India and the Chief Ministers of the states can review the working of the plan and of its various aspects.”60
There were some strong reasons why the NDC was set up, which may be seen as follows:
(i) The Central Plans were to be launched in the states and the UTs with the participation of the state-level personnel. The Planning Commission was not provided with its own implementation staff (though the PC was given the responsibility of plan implementation) for this purpose. Therefore, the consent and co-operation of these federal units was a must.
(ii) Economic planning as a concept had its origin in the centralised system (i.e., Soviet Union). For India, to democratise/decentralise the very process of planning was not a lesser task/challenge than promoting development itself. Indian planning is rightly said to be a process of trial and error in striking a balance between liberty and progress, central control and private initiative and national planning with local authority.61
The setting up of the NDC can be considered as a step towards decentralised planning.
(iii) In the constitutional design of the federal rigidities it was necessary to provide the whole planning process a unified outlook. The NDC serves the purpose of diluting the autonomous and rigid federal units of the Union of India.62
The NDC initially comprised the Prime Minister of India (de facto Chairman), the Chief Ministers of all States and the Members of the Planning Commission. In the first meeting of the NDC held on November 8–9, 1952, Jawaharlal Nehru stated that NDC is “essentially a forum for intimate cooperation between the State Governments and the Central Government for all the tasks of national development”. In the words of Nehru, setting up of the NDC may be regarded as one of the most significant steps taken for promoting understanding and consultation between the Union and the State
Governments on planning and common economic policies.
Considering the recommendations of the ‘Administrative Reforms Commission’, the NDC was reconstituted and its functions redefined by a Cabinet Resolution on October 7, 1967. The reconstituted NDC comprises the Prime Minister, all Union Cabinet Ministers, Chief Ministers of all States and Union Territories and the Members of the Planning Commission. Delhi Administration is represented in the Council by the Lt. Governor and the Chief Executive Councillor, and the remaining Union Territories by their respective Administrators. Other Union Ministers and State Ministers may also be invited to participate in the deliberations of the council. In the reconstituted Council, the Secretary of the Planning Commission acts as Secretary to the NDC and the Planning Commission is expected to furnish such administrative or other assistance for the work of the Council as may be needed. The baisc nature, origin and legal status of the Council are similar to the Planning Commission. The revised functions63 of the NDC are:
(i) to consider the proposals formulated for Plans at all important stages and accept them;
(ii) to review the working of the Plans from time to time;
(iii) to consider the important questions of social and economic policy affecting national development; and
(iv) to recommend measures for the achievement of the aims and targets set out in the national plan, including measures to secure the active participation and cooperation of the people, improve the efficiency of the administrative services, ensure the fullest development of the less advanced regions and backward sections of the community and through sacrifices borne equally by all citizens, build up resources for national development.64
Though the first Plan of India was launched before the arrival of the NDC, the body had many meetings before the terminal year of the plan and useful deliberations (almost all) after due consideration were included by the government into the planning process. But after the death of Jawaharlal Nehru—the greatest champion of democratic decentralisation in the country65 the NDC had become a small gathering of only those who had the
same vested interests with only the Congress CMs participating in its meetings. The CMs belonging to other political parties usually did not come to its meetings; the government hardly gave any importance to their advice. A phase of tussle between the Centre and the states started worsening from here onward with a degradation in principles of the co-operative federalism, with every five-year plans which followed. It was only by the mid-1990s that we see the revival of the lost glory of NDC as well as that of the spirit of decentralised planning. This has been possible due to three major reasons:
(i) In the era of economic reforms, with greater dependence on the private capital made it necessary to allow states greater autonomy in economic matters. Once the WTO regime started it became an economic compulsion.
(ii) The enactment of the Constitutional Amendments 73rd and the 74th had made local level planning a constitutional compulsion.
(iii) And lastly it was the compulsion of coalition politics in the formation of the Union Government which made the Centre to favour the states.
As per the major experts on the issue of decentralised planning, the last of the above given three reasons has played the most important role. By 2002, in the area of development planning we find an enhanced level of federal maturity and we see the last three five years plans (10th, 11th and 12th) adopted by a consensual support of the NDC members.
The NDC had its last meeting held in December 2012 (57th meeting). It is believed that in coming times the NDC will be merged with the Governing Council of the NITI Aayog. The Governing Council is a better equipped body than the NDC to establish a better Union-State co-ordination.