Five years after being set up, NITI Aayog remains a work in progress

As the Modi govt enters its second term, NITI Aayog will need to deliver at many more levels than it so far has, more so at a time when the country faces one of its worst economic slowdowns

It was in his first Independence-Day Speech as Prime Minister that Narendra Modi announced the abolition of the decades-old Planning Commission of India and replaced it with a brand new body called the NITI Aayog (NITI is an acronym for 'National Institution for Transforming India').

A formal Cabinet decision on the move came on January 1, 2015. Noted economist Arvind Panagariya was appointed the first vice-chairman of NITI Aayog, while career bureaucrat Amitabh Kant was its Chief Executive Officer (CEO).

At the very outset, policymakers were clear that unlike the Planning Commission, NITI Aayog wouldn’t have fund allocation powers and would only play the role of a think-tank for the government while fostering a sense of cooperative federalism among states.

After spending the first few months in setting its house in order, the Aayog gradually got into the groove. The Governing Council meeting, chaired by Prime Minister Modi, along with state chief ministers, came up with some valuable insights, including a panel of chief ministers on rationalising the Centrally Sponsored Schemes (CSS), so that wasteful government expenditure could be curbed.

During the months after demonetisation, the Aayog championed the digital drive in the country and, in consultation with the Reserve Bank of India (RBI), came up with several valuable suggestions to widen the digital payment ecosystem in the country.

It also prepared a three-year vision document for the central government that replaced the Nehruvian-era legacy of five-year Plans.

However, the fact that the organisation was a pale shadow of its predecessor in influencing policy-making, both at the Centre and in states, and that it was financially handicapped, has continued to hinder its working since inception.
 

“If you ask me, NITI Aayog as a concept is very good… I mean it is envisaged as a independent evaluator of government programmes, a think-tank that gives valuable policy inputs devoid of any financial clout, which I think is a good idea, unlike the previous Planning Commission. But when it comes to implementing the ideas for which NITI was created, I feel it has woefully inadequate,” N C Saxena, former member-secretary of Planning Commission told Business Standard.

He said that when it came to independent evaluation of programmes, a lot of times it was seen that the head of the NITI Aayog took a very pro-government view. In such a situation how could his subordinates guarantee that the evaluation would be independent and rational, Saxena asked.

“Of late, the NITI Aayog has come out with some outcome reports on SDGs, but they lack quality in the sense that the rankings don’t explain the real reasons for the downfall or improvement. Secondly, most of the data used in such reports is old and outdated. Overall, I mean I’m not very happy with NITI Aayog,” Saxena said.

Panagariya's exit: the first big challenge

It was in the middle of 2017 that NITI Aayog suffered its first big challenge when its first vice-chairman Arvind Panagariya demitted office well before his three-year term came to an end, to pursue his uncompleted academic work at Columbia University.

Though Panagariya officially exited to pursue academic interests, conspiracy theorists blamed the resignation on his not-so-warm equation with the Prime Minister’s Office (PMO), open opposition to some of his views by some elements of the Sangh Parivaar due to his foreign credentials and also the limited mandate of NITI Aayog.

Some media reports said Panagariya’s silent disapproval of demonetisation announced in November 2016 had also irked people on the top.

Nonetheless, after a few days, former economic advisor in the finance ministry and another well-known economist Rajiv Kumar was made vice-chairman of the NITI Aayog.

Kumar, it was then said, was perhaps the perfect replacement of Panagariya to settle the debate on foreign-returned and domestically-bred economists and their outlook on the Indian economy.

A few months after that, one of most prominent members of NITI Aayog, economist Bibek Debroy, was made chairman of Prime Minister’s Economic Advisory Council (PMEAC), which has its office in the Aayog itself.

Kumar wants NITI to be seen as an "effective instrument of cooperative federalism". On the way ahead, he told Business Standard: "NITI will endeavour to bring new ideas and transformative initiatives in the central government. It will strive to be seen as an effective instrument of cooperative federalism in the coming years." 

Big push in the 2018-19 Budget and beyond

It was in the Budget of 2018-19 that the Aayog was recognised for what it was worth for the first time since its formation, with several recommendations made by it finding mention in the Budget in some form or the other.

NITI Aayog had a role to play in as many as six major announcements made by then Finance Minister Arun Jaitley in his Budget speech that year.

Starting with framing a mechanism in consultation with states to devising a fool-proof system to ensure farmers got adequate price for their produce, to making a national programme on ‘Artificial Intelligence’ (AI), NITI Aayog was everywhere in Budget 2018-19.

One of the most vital interventions in the field of agriculture that the Aayog has made the past few years is getting bamboo grown in non-forest areas declassified, as the tree found a very prominent mention and an allocation in Budget 2018-19.

Jaitley proposed to launch the restructured National Bamboo Mission with an outlay of Rs 1,290 crore in the Budget to promote the bamboo sector in a holistic manner.

The Aayog’s work in getting states to amend their land lease laws for giving proper rights to tenant farmers also found mention, with the finance minister directing the Aayog to evolve a suitable mechanism to allow lessee cultivators to access credit without compromising the rights of the landowners. The mechanism had to be worked out in consultation with the states.

Another big intervention that the NITI Aayog spearheaded and which found a very prominent place in Budget 2018-19 was the ‘Ayushman Bharat’ scheme, under which the Centre plans to give Rs five lakh a year to almost 100 million households for health care. Officials said much of the scheme’s framework is being worked at the Aayog.

The NITI Aayog will also initiate a national programme to direct efforts in the area of artificial intelligence, including R&D of its applications. The outfit is also working on strategic disinvestment in Central Public Sector Enterprises including Air India.

Sources said the government’s move to formulate a comprehensive Gold Policy to develop the metal as an asset class and revamp the Gold Monetization Scheme for enabling people to open hassle-free Gold Deposit Account, announced in the Budget, is also a brainchild of the Aayog.

“As the country's premier government think tank, Niti Aayog is mandated with driving cooperative and competitive federalism in addition to providing policy direction in new and frontier sectors--e-mobility, AI, among others--for accelerating growth with innovation. In this direction in the last five years, the Aayog has fostered a spirit of competition among sub-national governments through several sectoral indices--SDG, Water, Health, Education, Innovation and the Aspirational Districts Programme,” said a senior Aayog official who didn’t want to be named.

Friction following Modi 2.0

In the second term of the Modi government, NITI Aayog’s relationship with the Centre saw some changes in the first few months. Observers feel the body has been more ‘vocal’ on some issues, which has attracted criticism from union ministers at times.

In August last year, a few months after the Narendra Modi government took office for the second time, union transport minister Nitin Gadkari chided NITI Aayog saying that it had no authority to take a call on vehicle technology, as that was purely the mandate of his ministry.

In a public function, Gadkari, who is known not to mince words, said this in the context of the Aayog's rather tough stance on stopping registration of vehicles using Internal Combustion Engines (ICE), in order to promote Electric Vehicles (EVs).

The Aayog has been at the forefront of the Centre’s move to promote EVs in order to cut down on pollution and was a key driver of the FAME scheme that announced a host of incentives for the EV sector.

Sources said matters came to a head during a meeting between top automakers and senior Aayog members, where the latter took a tough stand on ensuring a timeframe for rollout of EVs, both in the two-wheeler and in the four-wheeler space, and also laid out the options that government could take to ensure that sales of vehicles based on ICE are phased out.

Thereafter, all major automakers in the country expressed apprehension on any move to ban registration of ICE-engines, while assuring that they would move on the path of a roadmap for EVs.

A few days later, union Commerce Minister Piyush Goyal in a seminar said that NITI Aayog’s views on various issues do not always reflect those of the government as it is an independent think-tank that comes up with new solutions constantly.

He was speaking in context of RSS-affiliated organisations such as Bhartiya Majdoor Sangh blaming the Aayog for killing jobs and for the sale of government assets.

Weeks before this, NITI Aayog and the Ministry of Electronics and Information Technology were engaged in a deadlock over who would take ownership of a government-proposed artificial intelligence centre in India.

NITI Aayog had circulated a Cabinet note, asking for Rs 7,500 crore over three years to set up an AI framework. MeitY's plan estimated an expenditure of Rs 470-480 crore.

In 2018, four panels set up by MeitY evaluated the use of AI for citizens, such as setting up a data platform, skilling and reskilling, research and development, and examining the challenges involving legal, regulatory, ethical and cybersecurity aspects. MeitY’s reports haven't been made public.

NITI Aayog released a discussion paper last June on the “National Strategy for Artificial Intelligence.”

New-age technologies like AI fall under the purview of the MeitY, but NITI Aayog has spearheaded several discussions on the subject. The paper last year was hailed as a good outlining of the issues to be addressed through AI, but lacked a comprehensive implementation roadmap.

That apart, there also have been other issues where the Aayog has held views diagmetrically opposite to those of the government.

Even within the organisation there have been divergent views on several critical issues.

A case in point is the government’s push for natural farming through Subhash Palekar’s Zero-Budget Natural Farming Technique.

While, Aayog vice chairman Rajiv Kumar is a known votary of the method, its senior member Ramesh Chand feels natural farming is not the only solution to avoid chemicals in food products.

Though several experts said that given that NITI Aayog is an independent think-tank, it is meant to hold opinions on various matters that could be in variance with government’s stand. However, things could take an ugly turn if the variance grows into confrontation.

Some reports indicated that the Aayog’s tough stand on economic relief measures for industry was one of the reasons behind government's announcement of a slew of measures for pushing up growth since the last several months.

But how far all these is true is open to interpretation.

One thing, which several experts said has remained constant over the last five years of NITI Aayog has been the steadfast criticism it has received from several associates of Rashtriya Swayam Sevak Sangh (RSS), the ideological fountainhead of ruling BJP.

“To me, despite all the changes and alterations here and there, NITI Aayog isn’t playing the role for which it was created to the best of its abilities, be it in fostering a spirit of cooperative federalism between states, or giving sound policy advice when it comes to economic decisions. I mean, it seems that Aayog has become too dependent on outside consultants and advisors in its decision making which it clouding its views,” said Ashwini Mahajan, national co-convenor of  RSS-affliated Swadeshi Jagran Manch (SJM).

Citing, the example of BPCL disinvestment, Mahajan said that Aayog’s report to the Central government has reportedly favoured disinvesting in BPCL, but has it taken into consideration all factors, including the price such a disinvestment will fetch for the government.

“I mean you can deliver something without looking into the Indian context,” Mahajan said.

As it enters its second-term, NITI Aayog will need to deliver at many more levels than it so far has to really leave an imprint on India’s economic trajectory, more so at a time when the country faces one of its worst economic slowdowns.