NITI Aayog Needs Transformation To Transform India
It was a clarion call for change.
In less than 100 days after coming to power, Narendra Modi signalled a paradigm shift - away from the government-knows-all and Delhi-will-decide template. Articulating his vision, Modi declared that the new platform would foster “creative thinking, public-private partnership, optimum utilisation of resources, and utilisation of youth power of the nation,” and promote the aspirations of states and empower the federal structure.
Naturally, the announcement triggered euphoric expectations - after all, the Planning Commission has been seen, rightly and wrongly, as the villain in the dwarfing of India’s potential for decades. And finally - a quarter of a century after PV Narasimha Rao dismantled licence raj and 64 four years and nine months after it was set up - the Planning Commission was no more.
On January 1, 2015, the government set up the National Institution for Transforming India. The stated ambition: the NITI Aayog will work towards evolving “a shared vision of national development priorities, sectors and strategies with the active involvement of States in the light of national objectives” and provide a framework of “national agenda” for the Prime Minister and the Chief Ministers to provide impetus to.
On January 1, 2017, the NITI Aayog completes two years. In a presentation, the Aayog lists its core mandate as:
- designing strategic policies and programmes
- fostering cooperative-competitive federalism
- providing knowledge and innovation support
- evaluation and monitoring of policy and implementation
Has the NITI Aayog translated the vision articulated by the Prime Minister into an agenda and action?
Where Is The Vision?
There is much documentation on the NITI Aayog website on many aspects of governance. What is missing is stirring evidence of transformative change enunciated on August 15, 2014.
One stark pointer is that the flagship programmes have mostly emanated from the PMO, rather from the Prime Minister - whether it is the Make in India initiative, Digital India, Swachh Bharat, Startup India, Skill India, Gram Jyoti Yojana, and the concept of Smart Cities among others including the Pradhan Mantri Yojanas.
What about the NITI Aayog?
What is its vision?
In May the NITI Aayog promised India a Vision Document - a structured 15-year vision along with a seven-year strategy paper - by around the middle of December. Apparently there are many versions of the vision. And there has been much revision.
In a presentation made to the Prime Minister, the NITI Aayog listed initiatives such as the Make in India strategy for the electronic industry, roadmap for revitalisation of agriculture, national energy policy, poverty elimination model… and so on. The reports trigger an inescapable creeping sense of déjà vu - the scent of the Yojana Bhavan era is unmistakable.
Take the Make in India strategy for the electronic industry. It is a 32-page advisory which swings back and forth between import substitution and export oriented strategy – reminiscent of reports churned out during the UPA regime. It sees an opportunity for India to capture market share since China is vacating space in world marts. The report then glibly concludes...
...disruptive technological revolution through robotics and 3D technologies is 15 to 20 years away.NITI Aayog Report
In September 2015, the PMO mooted a Central Public Service Delivery Act. The idea traversed the much-trodden route of committee of secretaries, drafts, redrafts.
The status: under consideration
Timeline: December 2018
It is not clear what role NITI Aayog has played in these initiatives for “transforming India”. Suffice to say the impact, to put it mildly, is underwhelming.
Big Problems. Big Ideas?
Yes, the NITI Aayog has contributed to policy - for forward looking regulation of urban taxi services, argued robustly for simultaneous polls and for making the calendar year the fiscal year, enabled the drafting of the National Medical Commission Bill, ranked states on reforms for agricultural markets, ideated on how to win medals at Olympics and helped create a basket of PSUs that could be put up for disinvestment and for strategic sale. And yes, it has also enabled a rewards contest for digitised transactions.
It is easy to mistake visibility for presence - but presence is defined by mind share in the policy domain. The question is what is detaining the bold ideas? The charter for NITI Aayog expected it to provide a framework, a ‘national agenda’ for the centre and states to take forward. Fact is, the much-expected, much-promised out-of-the-box ideas are yet to arrive.
Acquisition of presence demands that the Aayog step away from being the adjunct to ministries and states to focussing on solving the big problems with big ideas.
The issue is not about the issues that NITI Aayog chooses to work on. The crux is the scale of the ambition and the approach.
Opportunities for big ideas are galore. Every year farm produce worth crores - estimated at Rs 70,000 crore - is lost between farm and markets.
India needs Amul-II - a national grid for agri-perishables.
The National Agricultural Market could be the answer if backward and forward linkages or last mile connectivity is enabled. Recently the government has mooted an Amazon-like platform for procurement. How about one for perishables that links producers with retailers and consumers – the PPP paradigm that was promised?
At a different level there is the twin challenge of climate change and producing for an India that will host a populace of 1.5 billion.
It is no mystery that India needs alternative ideas – shifting farmers from paddy to perishables, cane to sugar beet – and a new cropping pattern that makes agriculture sustainable. Sure, the Aayog does not subscribe to the “one size fits all” mind-set but the objective need not decimate the diktat of logic.
Demography will deliver dividends upon creation of jobs and attract investments. Make in India though needs more than branding and a quantum shift from case-by-case approach to a cluster approach which leverages existing strengths.
There is a riveting opportunity in Maharashtra. The Nashik-Pune-Mumbai tri-corridor affords port connectivity within 150 km, access to airports, a robust rural economy and existing industrial base to create a special administrative zone a la Indian Shenzhen (an idea mooted by the IDFC Institute). There is also the Surat-Mumbai-Nashik triangle and other similar opportunities on the east coast.
The Aayog has had much visibility on the issue of Ease of Doing Business but has struggled to impact rankings. One can argue that India must opt out of rankings or that the World Bank should cease ranking countries given the “problematic” methodology. But the problem of delays and costs must yet be resolved.
The question that must be asked is not about speed but about the need for many of the clearances.
This demands decentralisation. The NITI Aayog is best placed to create a template for dismantling permission raj - for the Centre and the States.
Boxed Out Of The Power Matrix
Arguably the reality of a powerful PMO does impact institutional space. The challenge faced by NITI Aayog is not unique. There have been powerful PMOs earlier - right from the time Lal Bahadur Shastri conceptualised the idea under LK Jha to marginalise the high priests of socialistic pattern. When Manmohan Singh was Deputy Chairman, Rajiv Gandhi called those in Yojana Bhavan “a bunch of jokers”.
A powerful PMO though did not detain C Subramaniam, DP Dhar or PN Haksar from promoting new ideas, from ensuring their voices mattered and that the institution stayed relevant. And they led the Planning Commission from 1971 through 1977 when Indira Gandhi was Prime Minister. Indeed, DT Lakdawala defined and redefined policies and the quality of institutional advice to the government when Morarji Desai was Prime Minister.
Yes, the NITI Aayog does suffer a handicap. Unlike the Planning Commission, it does not possess the leverage of resource allocation.
Tactics apart, it is an issue that the NITI Aayog should have got concerned about at a strategic policy level. Till recently, India kept the federation going using the twin instruments of Finance Commission and Planning Commission to address critical imbalances - of earning capacity and of development expenditure. Now, after disbanding the Planning Commission and rendering the NITI Aayog into only a think tank, there is only the Finance Commission. The Finance Ministry is and will be preoccupied with the immediate, and is optically not a neutral umpire.
In a recent lecture, Vijay Kelkar - former Finance Secretary and Chairman of the 13th Finance Commission - argues that there is a strong case for the NITI Aayog to get “significant levels of resources” for allocation to states for promoting growth and mitigate imbalances. It is an argument NITI Aayog should have made ab initio, and forcefully, to acquire leverage to promote its ideas. In the political economy, what an institution can give or deny delivers heft to its evangelism.
No Seat At The High Table
In the amphitheatre of realpolitik authority doesn’t flow from the act of appointment. The power to transform stems from personality, perception and the ability to deploy that delectable instrument called “precedence”. The Niti Aayog is required to ensure “interests of national security are incorporated in economic strategy and policy”, to develop village level plans and to resolve inter-sectoral issues for accelerating development. Yet the Niti Aayog is not an invitee to the critical cabinet committees on economic affairs, security or political affairs. The invitation is not automatic. The failure to secure a seat on the high table is a failure of imagination.
It is true that the evolution of an institution is a process that needs time. Equally true is the fact that a hundred and four weeks is a reasonable enough time to define identity and establish a locus inside the Leviathan. The NITI Aayog has struggled to define itself and therefore register its presence. The NITI Aayog cannot be just any think tank. It is mandated to be the National Institution for Transforming India. And it needs transformation to deliver transformation.
Shankkar Aiyar, political-economy analyst, is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change.
The views expressed here are those of the author’s and do not necessarily represent the views of BloombergQuint or its editorial team.