A new agenda for NITI Aayog

The National Institution for Transforming India or NITI Aayog will have a new vice-chairman from September 1. As he takes charge, it is only appropriate that some attention is paid to the path that it should follow in the coming months under a new leadership. A reasonable starting point for that exercise is to first assess the original objectives that the Narendra Modi government had in mind while setting up the NITI Aayog in January 2015 after winding up the Planning Commission that served the nation from March 1950 to August 2014.

What the prime minister said on this issue in his Independence Day speech in 2014 is worth recalling here. He said the Planning Commission had played a role in promoting economic growth, but it had outlived its utility in the present context. “So, I am saying from the ramparts of Red Fort that it is a very old system and it will have to be rejuvenated… Sometimes it costs more to repair the old house, but, it gives us no satisfaction. Thereafter, we have a feeling that it would be better to construct a new house altogether and therefore within a short period, we will replace the Planning Commission with a new institution having a new design and structure, a new body, a new soul, a new thinking, a new direction, a new faith towards forging a new direction to lead the country based on creative thinking, public-private partnership, optimum utilisation of resources, utilisation of youth power of the nation, to promote the aspirations of state governments seeking development, to empower the state governments and to empower the federal structure,” Mr Modi announced.

The Cabinet resolution adopted in January to set up the NITI Aayog recounted almost all these objectives and added that the new body should serve as a think tank of the government — “a directional and policy dynamo”. It should provide governments at the Centre and states with strategic and technical advice across the spectrum of key elements of policy, including matters of national and international import on the economic front and the infusion of new policy ideas and specific issue-based support.

Significantly, the Aayog was expected to ensure that no single model from outside was transplanted into the Indian scenario, even though positive influences from the world could be incorporated into its thinking. “We need to find our own strategy for growth. The new institution has to zero in on what will work in and for India. It will be a Bharatiya approach to development,” the Cabinet resolution added.

A few objectives of the Aayog stand out from what Mr Modi said in his Independence Day speech and the subsequent Cabinet resolution. It must encourage public-private partnership in pursuing growth models for the country. It must empower the federal structure of the country and work in cooperation with the states. It also wanted the Aayog to be cautious about transplanting a single model from abroad and be discerning enough to understand what worked for India and what did not. Not entirely unconnected with this was the idea that the Aayog must explore a Bharatiya model of development. Finally and perhaps most importantly, the Cabinet resolution underlined the need for it to act as the government’s think tank.

Encouraging a public-private partnership model to promote growth is as laudable an idea as empowering the federal structure and working with states to further their growth prospects. However, they are easier said than done. Introducing a public-private partnership model in the functioning of the Aayog will require a much more liberal approach in dealing with non-government agencies than has been displayed so far. The work in this area has been patchy and it will require some effort on the part of the new vice-chairman to increase the involvement of the private sector in discharging its role as the government’s think tank. 

Empowering the federal structure and working with states to help them with advice on promoting growth has turned out to be an even bigger challenge. The Planning Commission had the leverage of funds allocation to ensure adherence to the prescribed policies. In the last 32 months, the Aayog has tried to reach out to the states with its policy advice. But the results could have been better. Yes, the three-year action agenda document lists many policy imperatives, collated from among the views from them, but whether these will be implemented is a moot point. There is a need for a more durable and effective mechanism for the Aayog to make some headway in increasing its engagement with the states and making it effective. 

The most troubling challenge will be to devise a Bharatiya model for governance and development. What after all is a Bharatiya model? How are these different from any other model that is in use? It would be advisable for the new vice-chairman to avoid getting trapped in this slogan of a Bharatiya development model, although there were disturbing messages conveyed by him on this front soon after his appointment. Does it really matter whether the cat is white or black as long as it catches mice? 

Finally, the Aayog should strive hard to evolve itself into becoming an effective and active think tank for the government. This is going to be the most difficult challenge as its performance as a think tank will be in conflict with the current structure and headcount. Some headway has been made in reducing its manpower. From about 1,200 employees three years ago, the Aayog today has just about 670 people on its rolls. More downsizing will be necessary and the quality of those who are retained or hired must be upgraded to a level that should help the Aayog play the role of a think tank. These are legacy issues but must be faced with a clear action plan. One way out would be to expedite the process of sending back those on deputation to their parent departments or ministries unless they are specifically required in the Aayog.

The good news is that the government has not slashed the outlay for the Aayog hugely even though the manpower count has been cut almost by half. At about Rs 73 crore of annual revenue expenditure, the NITI Aayog should hardly feel constrained for lack of resources while discharging its role as the government’s think tank.