BABU BEAT. Of plans, policies and politics

When Arvind Panagariya, thought to be the blue-eyed boy of Prime Minister Narendra Modi, announced his decision to move on from his role as Vice-Chairman of NITI Aayog barely two years and eight months into his tenure, it created a flutter. With Panagariya announcing that he was returning to Columbia University, where he served as professor of Indian Political Economy, murmurs began about whether the premier policy ‘think tank’ of the government should be headed by ‘imports’ — economists settled overseas.

Accept it or not, rajniti and niti (politics and policies) go hand in hand. There has been talk about certain heavyweights within the government not being happy with Panagariya’s economic thinking, particularly when it came to disinvestment. Also, there have been murmurs about NITI Aayog, or the National Institution for Transforming India, being reduced to a marketing agency.

Just a couple of years into its existence, why is NITI Aayog attracting controversy? After all, it was born with such lofty ideals – to replace the frayed old Planning Commission, a Nehruvian legacy. As Narendra Modi said in his first Independence Day speech as the Prime Minister, “to strengthen our federal structure, to make our federal structure vibrant, to take our federal structure as a heritage of development, a team of a Chief Minister and Prime Minister should be there, a joint team of the Centre and the States should move forward, then to do this job, we will have to think about giving the Planning Commission a look … very shortly, we are about to move in a direction when this institute would be functioning in place of Planning Commission.”

NITI Aayog was formed by a resolution of the Union Cabinet on January 1, 2015. While designing strategic and long-term policies and programmes for the government, NITI Aayog also provides relevant technical advice to the Centre and States.

Panagariya insists his decision to move on is apolitical. “The announcement is sudden, but the decision was not sudden. My leave from Columbia University was for two years, and I have already done two years and eight months here. I did try for an extension but it did not materialise,” he explains.

The question then is why did the government appoint someone who was uncertain about his ability to serve the full five-year term? Should it have looked for someone who could have stayed the full course?

Historically, during its last fifty years, the erstwhile Planning Commission saw only four five-year terms completed – one each of Pranab Mukherjee and KC Pant and two of Montek Singh Ahluwalia. As many as 15 appointees during the same period served less than three years. Against these facts, the controversy surrounding Panagariya’s departure would seem to be much ado about nothing.

“It is not fair to blame Panagariya alone,” an erstwhile member of the Planning Commission said.

But, a more pertinent question raised is whether the government cannot consider more India-based economists? Is there a dearth of good policy researchers in India?

Kirit Shantilal Parikh, former member, Planning Commission, and currently Chairman, Integrated Research and Action for Development (IRADe), says, “It will not be totally correct to say so. You have to see the larger picture. NITI Aayog has been getting inputs from foreign firms who have been willing to give advice free of cost. That doesn’t mean they are better than Indian researchers.”

According to Parikh, “Everyone wants ready-made researchers, but does not want to pay for building domestic capacities. Incentives and structure of payments have to be reworked. Government departments do not pay for infrastructure, only the staff cost, that too at rates below the market rates. It is easier to let foreign firms like McKinsey come and do work pro bono. They also love to do it because they get a huge boost on their CV. ‘Worked for NitiAayog in India’ raises the price for their other fellows.”

To be fair, Panagariya has experience in policy roles in India. He was previously Deputy Chairman of the Rajasthan Chief Minister’s Advisory Council and had spearheaded reforms on tricky subjects, such as labour, in the State.

Some key decisions of the Aayog during his stint include doing away with the Five-Year Plans and preparing three roadmaps for the economy — the 15-year Vision Document, the 7-year Strategy Document and the 3-year Action Agenda.

With the Plans being scrapped and thus no role in allocating funds to the States from the Union Budget, the Aayog worked on reforms in healthcare, education and the Smart City initiative with State Governments. It also coordinated with the Finance Ministry on subjects such as advancement of the Union Budget and merger of the Railway and General Budgets.

The other question about NITI Aayog is on political pressures. Nehruvian thought did dominate and shape the Planning Commission and its development agenda before eventually losing its sheen. Plans have been made with a populist agenda. As an erstwhile Planning Commission member says, “On a critical economic issue a minister had asked ‘have you ever fought elections’, making it clear that a politician follows a different path.”

The latest allegation doing the rounds is that NITI Aayog was working as a marketing outfit for government policies. Most associated with it believe that this is not a correct interpretation. Whatever promotional advocacy NITI Aayog gets involved with is only after a mandate comes from the government. “Judge us for our work, instead of trivia” says Panagariya, as he prepares to go back to his first love – academics – from September 1, and hands over the post to economist Rajiv Kumar.

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