‘Rigid labour laws, strict control over financial markets behind slow growth’

India’s planning till recently has been plagued by rigid labour laws and strict control over financial markets (till 1990s).

NITI Aayog Vice-Chairman Arvind Panagariya, in his presentation to Prime Minister Narendra Modi, also said that in the agriculture sector, the governments of the past failed to curb profiteering and exploitation of farmers by middlemen.

Flaws in key social programmes such as the Right to Education Act, the National Rural Employment Guarantee Act and a poorly targeted and leaky Public Distribution System, have been the reasons for the nation’s slow growth, he added.

Panagariya further said the flaws can be corrected through proper analysis by experts, and that internal criticisms of proposed new policies should be given adequate hearing.

The Thursday meeting between the Prime Minister and NITI Aayog members was initially supposed to focus on the Vision Document for the next 15 years. However, a late evening request from Modi a day earlier shifted the focus to ‘learning from past mistakes’.

Speaking to the media after the meeting, Panagariya said: “My main theme was that India did not think about a lot of the unintended consequences of a particular legislation.”

Slow to correct Panagariya also pointed out to Modi that India has been slow to admit its mistakes and therefore slow to correct them.

“The Prime Minister told us that the Vision Document will not only chart a roadmap for India’s development over the next 15 years but also lay the foundation for the country’s growth,” he said.

An official statement added that while laying out the broad contours of India’s development path, Modi told the NITI Aayog that judicious and intelligent application of natural and human resources will be crucial.

He also mentioned the use of available land, the country’s mineral wealth and vast untapped solar potential as areas that are important for planning development.

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