Business Today

Institutional needs today are different from those in the past, says Arvind Panagariya

Even as NITI Aayog completed one year in January this year, there are many  unanswered questions about its exact role in the government. Business Today posed these questions to Arvind Panagariya, Vice Chairman, NITI Aayog, in an email interview.

twitter-logoDipak Mondal | March 22, 2016 | Updated 20:16 IST
Arvind Panagariya, Vice Chairman, NITI Aayog
Arvind Panagariya, Vice Chairman, NITI Aayog

Even as NITI Aayog completed one year in January this year, there are many  unanswered questions about its exact role in the government. Business Today posed these questions to Arvind Panagariya, Vice Chairman, NITI Aayog, in an email interview. Excerpts from his answers:

BT: Niti Aayog has completed one year. However, there are many doubts about the exact role of Niti Aayog in the government. Would you like to clear the air around this?

Panagariya: The key function of the Planning Commission was to allocate funds across states for state plans.  With the Finance Ministry and Central ministries now disbursing the funds directly to the states, NITI Aayog does not perform this function.  As per the Cabinet resolution creating the NITI Aayog, some key functions of the institution are (i) Fostering cooperative, competitive federalism; (ii) Designing strategic and long-term policies and programmes; (iii) Creating a knowledge, innovation and entrepreneurial support system; (iv) maintaining a state-of-the-art resource centre, be a repository of research on good governance and best practices; and  (v) evaluation and monitoring.  What the NITI Aayog has done under each of these headings in its first year can be found in the presentation on our website.

BT: Why do you think it is a better alternative to Planning Commission?

Panagariya: It is not a matter of one of the two institutions being superior.  For its time, the Planning Commission was a world-class institution. In modern times, we have come to delegate many of the economic decisions once Centrally planned by the Planning Commission and directed by the Central government have been delegated to decentralised markets and states.  Therefore, institutional needs today are different from those in the past.  We at the NITI Aayog strive to deliver the modern-day needs of the nation with the same efficiency and success that the Planning Commission did in its heydays.

BT: Do you think from the states' perspective, Niti Aayog is a welcome change given many states have always complained about the big brother attitude of Planning Commission?

I would surely like to think so.  The top leadership at the Aayog frequently visits the states and holds many consultations in the states.  I have personally visited a large number of states and consulted directly with the chief ministers and senior state officials. Symmetrically, for issues cutting across all states, we invite the state officials to New Delhi.  We have an excellent working relationship with the states.  Recently, I have written to all chief ministers indicating that the Aayog stands ready to assist them in resolving any outstanding issues with the Central government ministries.

BT: What do you think Niti Aayog has achieved in one year and what are the works that it would undertake in future?

Panagariya: Three major reports by sub-groups of chief ministers, quarterly presentations to the Prime Minister on progress on infrastructure projects, a highly influential paper on revitalisation of agriculture, draft appraisal of the Twelfth Five Year Plan, National Energy Policy (in advanced stages), a paper on the elimination of poverty (in advanced stages), National Regulatory Reform Bill, a Model Land Leasing Act (nearly ready), progress on sustainable development strategies for the North East and Hilly area, setting up of the Atal Innovation Mission and the launch of an Ease of Doing Business survey of 3,500 firms are some of the highlights of our work in the first year.  

We also comment on numerous Cabinet Notes and appraise projects. I personally pay a great deal of attention to the Cabinet Note to ensure that the policies that go to the Cabinet are sound.  Our international engagement includes G20 (with the Vice Chairman serving as the Sherpa), strategic dialogue with China and cooperation with the International Energy Agency.

In the coming year, we will bring to completion numerous ongoing activities (National Energy Policy, Model Land Leasing Law, Ease of Doing Business project, task force reports on agricultural development and poverty elimination) and initiate new ones (to be announced at appropriate times though one of them will surely be listing of PSUs for strategic sales and closure).

BT: Do you think Niti's area of operations overlaps with that of other ministries and that could create some bitterness with ministries?

Panagariya: I would like to think that we complement what the ministries do.  Through our comments on Cabinet Notes, we help sharpen policy thinking in the ministries.  In areas (such as energy) covered by multiple ministries, we contribute to policy making more directly. Where cooperation is required among ministries (such as PMKSY) and state governments and ministries, we play a coordinating role.  If occasionally we differ with the ministries, that is okay since internal debate is an essential part of healthy discourse.

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