Soon after Dr Manmohan Singh took over as India’s prime minister in May, he called his trusted lieutenant, Montek Singh Ahluwalia, to return home from Washington where he was working as the director of the International Monetary Fund’s independent evaluation office. As finance secretary in the ministry of finance in the early 1990s, the 61-year-old Oxford University-trained economist worked closely with Dr Singh, then finance minister, to conceive and execute India’s economic reforms. Mr Ahluwalia is now back in New Delhi as deputy chairman of the planning commission, a government panel that, somewhat ironically, was at the heart of economic planning in India’s socialist past.
Mr Ahluwalia says he is certainly no believer in the virtues of centralised planning. The tone of the commission’s reports in the recent past was “not exactly friendly” to the market-oriented reforms started by the government. Dr Singh’s job is to reinvent the commission to act as a think-tank on economic policy for the new government, and as a key agency for public investment. “In the past, the commission’s job was mainly to allocate funds to various ministries and government projects. There was not much evaluation done on how the money was spent,” he points out. To get a sense of the resources at the commission’s command, the budget for this year is $32bn, larger than the sum the World Bank allocates to the developing world, he says.
