Reasons For Abolishing Planning Commission.

India's Prime Minister Narendra Modi in his independence day speech declared to abolish Planning Commission. Planning Commission was established by an executive order in 1950 by India's first Prime Minister Jawahar Lal Nehru.

Reasons for setting up Planning Commission

1. Absence of adequate coordination and sufficiently precise information about availability of resources.
2. Need for a fresh assessment of finance and other resources, necessitated by integration of former Indian states. 
3. Inflationary pressure inherited from the war, balance of payment (BOP) difficulties, influx of refugees.
4. Food insecurity.
5. Dislocation of supplies of certain essential raw material placed economy under severe strain.
6. promote rapid rise in standard of living of people by efficient exploitation of resources.
7. In response to unique challenges faced by a nascent democracy and a fledging economy top down approach to planning conceived envisaging a dynamic role of central government building up economic and social order of weak states. 
8. Influence of Nehruvian socialism. Planned economy with central government responsible for a dominant portion of investment in economy.

Relevance of Planning Commission

Review of Planning Commission in 2010 identified following functions that it performed in current day and age.

1. Seeing the "big picture" and presenting it to the country.
2. Injecting fresh thinking into planning process.
3. Allocating money to states.
4. Allocating money to central ministries.

In first two functions Planning Commission act as think tank. And in 3rd and 4th point is act as arbiter for distribution of nation's financial resources.

Problems with Planning Commission

1. Concerns regarding federalism
• act as control commission rather than as a recommending body, exceeds the scope of authority which is based on a singular cabinet resolution.
• directly impact center-state relation due to Planning Commission's influence in distribution of funds.
• Balance in center-state relation with respect to financial matters reached after a long reasoned debate by forming Finance commission. Neither constitution or framers envisaged Planning Commission with administrative or control rights over distribution of funds.
• It has no constitutional mandate or legislative authority. It has lack of accountability. This is threat to federalism.
2. Concerns of Constitutional Impropriety
• PC is in conflict with the  role of Finance Commission. 
• circumvents the constitutional protections that were designed to ensure impartial allocation of funds and reduces the independence of States in managing their finances and implement developmental program. 
3. Concerns of Accountability
• members appointed  by Prime Minister, including Deputy Chairman who oversees functioning of Planning Commission. 
• Deputy Chairman is not subject to Parliamentary oversight by means of questioning in Parliament.
• Deputy Chairman is answerable indirectly through Minister of State (MoS) for Planning and Statistics. Since Deputy Chairman holds cabinet rank and outrank MoS, so effective supervision is not expected.
• It has opaque functioning.
• Independence of members is not ensured. Members are susceptible
  to pressure from PMO leading to partial functioning in allocation of funds.
4. Concerns regarding Human Resource and Organisational Structure
•  PC accused of becoming "parking lot" for IAS officers, who neither have specialized domain level expertise nor training to carry out long term economic planning . 
• Expert members have little influence over the large pools of unspecialized bureaucrats who man the organisation. 
• Non experts execising ineffective and unwarranted influence over the spending decisions and development priorities of the States. 
• Planning Commission was no diffrent from other central ministries in the way it was administered. 

The changing time has required changes in Planning Commission to stay relevant. Independent Evaluation Office has recommended for abolition of Planning Commssion. 

Now Planning Commission has been replaced by NITI Aayog.