Why Arvind Panagariya couldn't become Montek Singh Ahluwalia for NDA-2

NITI Aayog vice-chairman Arvind Panagariya’s move to relinquish his post might have come as a surprise to many given that he was considered a key advisor of the Narendra Modi-lead National Democratic Alliance (NDA) government, but for many it was just a matter of time, due to the peculiar nature of relationship between the Aayog and the government.

Post-disbanding of the Planning Commission of India, in 2015 NITI Aayog was constituted as a successor to the over six-decade-old organisation though with much less powers; but quite larger domain and a unique relationship with the government.

The Aayog was free to give advice to the government, but none of it was binding on it and without the financial might of a Planning Commission it had limited means to enforce them both on the Centre and state governments.

The organisation, which was expected to spearhead India’s reform agenda and give cutting edge and path-breaking ideas, ended up acting merely as executor of ideas and initiatives decided somewhere, many experts noted. 

That said, the Aayog did introduce some good ideas and initiated reforms within its limited scope and domain. Among them reforming the agriculture markets, laws to legalise land leases in states, preparation of the three-year action agenda, working with the states to rejig the Centrally Sponsored Schemes (CSS), initiating reforms in educational and technical institutions, spearheading the digital drive and setting up tinkering labs in schools are few notable moves.

Although many of the reform measures were instructed from the top and executed by the Aayog, it handled them efficiently.

The ministries and departments, which are the nodal agencies for execution of NITI Aayog’s ideas, sometimes went along with it; while at other times were not so amiable. The Coal Ministry’s reported objections to the draft Energy Policy is a case in point.

Panagariya after initial hiccups in dealing with a well-settled bureaucracy and administration found his going rather smooth.

Insiders said he did initially find it difficult to get the rank and pay of a cabinet minister, which was settled later on. It also put in place a well-settled hierarchy in NITI Aayog and brought it somewhat on par with the erstwhile Planning Commission.

In the Planning Commission, the deputy chairman was of cabinet rank and attended all cabinet meetings and was authorised to give expert comments on most cabinet notes.

But, apart from a cabinet rank, Panagariya never enjoyed the proximity and personal rapport that his predecessor Montek Singh Ahluwalia had with the then prime minister Manmohan Singh. In the case of the later, the closeness came from years of working together in different positions within the government.

The rapport also ensured that Planning Commission’s voice was heard much more sincerely in the corridors of power, something which the new vice-chairman will need to address quickly if he wants to make his mark. 

Ahluwalia left his job at IMF to become the deputy chairman of Planning Commission in 2004 while Panagariya left his vice-chairmanship of Niti Aayog to rejoin Columbia University.