{"id":229612,"date":"2015-01-09T21:47:23","date_gmt":"2015-01-09T16:17:23","guid":{"rendered":"http:\/\/www.tehelka.com\/?p=229612"},"modified":"2015-01-09T21:47:23","modified_gmt":"2015-01-09T16:17:23","slug":"the-rajniti-behind-niti-aayog","status":"publish","type":"post","link":"https:\/\/tehelka.com\/the-rajniti-behind-niti-aayog\/","title":{"rendered":"The Rajniti Behind Niti Aayog"},"content":{"rendered":"

\"yoj_bhawan\"
\nAt the stroke of midnight on\u00a015 August 1947, Jawaharlal Nehru gave his \u2018Tryst with Destiny\u2019 speech. His third line was: \u201cA moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance.\u201d
\nIt is ironical and possibly, no coincidence. Since 2013, and specifically after he became the prime minister in May 2014, Narendra Modi has claimed that it was that same \u2018moment\u2019 for India today, when old politics has to give way to a new one, when the decades-old Nehru-Gandhi-Congress mindset will disappear, and when a new age of efficient and transparent governance will arrive.
\nOne of Modi\u2019s moves to achieve these objectives was the rechristening of the Planning Commission as NITI Aayog. The change in name, and the reorganisation, heralded the end of Nehruvian economics. On paper, it implied the triumph of politics over the planning process. Says Abheek Barua, a consultant at ICRIER, a think-tank: \u201cIt signifies the end of planning as we have known it for over six decades.\u201d
\nIt is true in theory. Over the past decade or so, the Planning Commission, under Montek Singh Ahluwalia, its former deputy chairman, had become almost dictatorial. It disbursed funds from the Central Plan pool to the states as per its whims and fancies. A policy planner, who attended several meetings between Ahluwalia and the states\u2019 heads, explains: \u201cIn one of them, he shouted at a chief minister, who asked for more funds. He said, \u2018You could not spend last year\u2019s allocations. And you want more\u2019?\u201d
\nThe commission\u2019s A-team decided how much funds would go to which states and for which sectors. It determined which of the chief ministers\u2019 pet projects got a lease of life. The chief ministers, and their finance ministers, were at the beck and call of officials in New Delhi\u2019s Yojana Bhavan.
\nObviously, the overall direction came from the then prime minister, Manmohan Singh, who was close to the deputy chairman, and his pro-reforms loyalists. But the details were decided by the commission. Claims an observer: \u201cThe process was centralised. The chief ministers had regular run-ins with Ahluwalia, most of which were in vain. Even Modi faced the music when he was Gujarat chief minister (see page 26).\u201d
\nAfter Modi became the prime minister, it was clear that it would mean the end of the road for Ahluwalia and the commission. NITI Aayog was the former\u2019s \u2018inclusive\u2019 answer to a power-shift from the institution to chief ministers. In its new avatar, the states\u2019 rulers would put their heads together to decide how much money they can grab for their states, and the mega dream projects. The vice-chairman (earlier deputy chairman), Arvind Panagariya, will be a figurehead as far as distribution of funds is concerned.
\n

\"Power
Power shift\u00a0<\/b>In the era of NITI\u00a0Aayog, CMs will\u00a0enjoy more leeway\u00a0on how to grab\u00a0additional funds, Photo: PIB<\/figcaption><\/figure>
\nIn essence, experts dub it a political move, which has to be viewed through the lens of political economy. To aspiring chief ministers, especially from the BJP, it is a huge carrot. If they can guide the party to massive victories in the forthcoming Assembly elections in states such as Delhi, Bihar, West Bengal and Uttar Pradesh over the next three years, they are likely to be in NITI Aayog\u2019s good books. Huge wins in these states is crucial for Modi, if he has to transform his dream into reality.
\nAs we have witnessed over the past few months, NDA-2 was forced to take the ordinance route to push through several reforms like changes in the land acquisition Act, and privatisation of the coal and mining and deep-rooted changes in the insurance sectors. This was primarily because the BJP and its allies don\u2019t have the required numbers in the Rajya Sabha. Only a continuation of the Modi momentum in the Assembly elections can help the party to elect more members to the Upper House and change its composition.
\nFor the existing chief ministers, NITI Aayog may become the stick to beat them with if they misbehave. The same way it happened during the Planning Commission days. Although the states\u2019 heads can now directly participate in the planning process, instead of previously being given doles, the show\u2019s director is Modi. The reason: with the wings of the vice-chairman and other full-time members clipped, the chairman (i.e., the prime minister) will become the ringmaster of this planned money circus. All roads, for the state politicians, will lead to 7, Race Course Road.
\nIt is an ironical twist to the tale. Over the next few years, the planning process may become more centralised and dictatorial than it was before. Modi\u2019s projects \u2014 bullet trains, smart cities and PPPPs (Public-Private-People Partnerships) \u2014 may attract attention and investments.
\n
\"Fall
Fall guy\u00a0<\/b>Montek often took\u00a0the flak for policy
initiatives proposed\u00a0by the Manmohan
government, Photo: Tehelka Archives<\/figcaption><\/figure>
\nSays Bartun Mitra, an economist: \u201cThe basic difference between NITI Aayog and the Planning Commission seems to be that the former is under the Prime Minister\u2019s Office, with the pm as an active chairman setting the agenda. Earlier, the prime minister was ex-officio chairman, who did not directly set the agenda. It seems to be a reflection of the extreme centralisation that has been taking place under this government.\u201d
\nIn such a scenario, what will Panagariya, his core team and scores of officials in NITI Aayog do? According to Barua, Panagariya and the new full-time members \u2014 Bibek Debroy, an economist, and VK Saraswat, former DRDO chief \u2014 will become advisers to the government. One of NITI Aayog\u2019s objectives will be to track the big economic and investment picture. It may sketch the country\u2019s vision, or where India will want to be in 2024. (Modi has claimed that he would remain in power for a decade!)
\nMany experts feel that this should be its main task. Neither the Planning Commission nor NITI Aayog should have anything to do with the allocation of Central resources. First, as Debroy pointed out in the past, it was a non-constitutional body, which was set up through a government resolution in 1950. Thus, it was not accountable to either the Cabinet or Parliament. Second, in a federal structure, the states should have equal powers to demand funds, and spend it in the manner that they desired. Finally, Ahluwalia emerged as an extra-constitutional authority, who reported to the prime minister.
\nOthers disagree. According to Mitra, the question to be asked is \u201cwhether NITI Aayog will be asked to generate ideas, or become a vehicle to drive the prime minister\u2019s agenda? If it is the former, then the earlier National Development Council (NDC, which comprised all the chief ministers and heads of Union Territories) could have been a more appropriate forum. If it is the latter, NITI Aayog, Planning Commission or NDC wouldn\u2019t be necessary. For instance, Indira Gandhi typically didn\u2019t need such institutions\u201d.
\nPanagariya can also become Modi\u2019s \u2018fall guy\u2019 like Ahluwalia was for Manmohan. Each time, the former prime minister wanted to test new ideas, he would ask the Planning Commission to float a policy balloon. In a paper or a speech, the deputy chairman would put it in the public domain. If the balloon was pricked, or the idea criticised, Ahluwalia would take the flak. If it was accepted, the prime minister would claim the credit. This was especially true for controversial decisions such as the drafting of PPP agreements.
\nEach time the states, Central ministries and private parties had problems with the PPP contracts, they went after Ahluwalia, who would sometime defend the commission and sometimes admit that the clauses in the agreements needed to be revised. Similarly, the deputy chairman\u2019s statements on the income levels of BPL (below the poverty line) families turned controversial. However, in both cases, neither experts nor the media attacked the upa-1 and 2 regimes.
\nPanagariya and his bureaucratic team can emerge as a new pillar to support nda-2\u2019s reforms. With its focus on de-bureaucratisation, business-friendliness and effective governance, NITI Aayog may come up with innovative views on how to fast-track growth and development over the next 5-10 years. It can borrow from global best practices and policies, and finesse them to suit India\u2019s requirements. It can provide a theoretical framework, which can then be implemented nationally or state-wise.
\nThe flip side is that while the chief ministers jostle with each other, and plead with Modi for money, NITI Aayog can become redundant as a policy think-tank. Although Modi takes his own decisions and depends on his loyalists, he is known to seek advice from differing sources, and not be dependent on a single institution or individual. Therefore, NITI Aayog will have to compete with others like the National Institute for Public Finance and Policy in the ongoing battle for ideas. Within the organisation, there could be ego clashes between Panagariya and Debroy, both of whom are close to Modi.
\nThere are other question marks on the future of NITI Aayog. The government press release said that the institution will have a chief executive officer, whose name hasn\u2019t been finalised. What will this CEO do in an organisation that deals with policies? Is this a prelude to transform it into a management structure that global consultancy firms, say McKinsey & Company, have? McKinsey, which has experts from different domains, is headed by a global managing director. More importantly, what will be the relationship between the CEO and the vice-chairman? How will their responsibilities be divided without internal tensions?
\nIf the planning process has to change, and run smoothly, other changes need to be put in place. For example, there are rules and formulae on how the Central resources pie can be divided among the states. One of them is that if a state is unable to spend its annual allocations in a specific year, the money given to it the next year can witness only an incremental hike. Will this change? If it doesn\u2019t, the country will witness the same criticisms by the chief ministers, as was the case in the past.
\nIn the near future, the Centre will allot more of its revenues to the states, which will be able to spend them directly without Central intervention or diktat. As recent experiences prove, the centralised Plan Fund is getting squeezed rapidly; in the past few years, it shrank by over 30 percent. In such a scenario, the medium-term relevance of either the Planning Commission or NITI Aayog is contentious. Seen from this perspective, is there a five-year planned strategy that Modi has in his mind?
\nTo understand this, one has to explore the seeming contradictions in Modi\u2019s style of governance, and refer to the four lectures on \u2018Integral Humanism\u2019 delivered by Deen Dayal Upadhyaya in 1965. Modi claims that the late Sangh Parivar ideologue is his mentor on governance-related issues. Thus, what Upadhyaya said on the centralisation of the planning process is important.
\nOn the one hand, Modi loves to control decision-making. But, on the other hand, he wants to give an impression that his style is inclusive, and involves others. Between this private stance and public posture, NITI Aayog falls bang in the middle. In the short run, the organisation may be used as a tool to keep policy formulations within the PMO. But as this centralisation grows, he will make moves to possibly disband NITI Aayog, and convince people that his focus is decentralisation.
\nThis is where Upadhyaya fits in. In one of his lectures, he observed: \u201cCentralisation and monopolisation have been the order of the day for all these years, knowingly or unknowingly. The planners have become prisoners of a belief that only large-scale centralised industry is economic and hence without worrying about its ill-effects, or knowingly but helplessly, they have continued in that direction.\u201d Instead, he argued in favour of de-centralisation, which he claimed was one of the two words \u2014 the other was Swadeshi \u2014 \u201cwhich can briefly summarise the economic policy suitable for the present circumstances\u201d. This is the line Modi will repeat when NITI Aayog no longer exists, may be by 2019.
\nletters@tehelka.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

NITI Aayog is the last nail in the Nehruvian economic coffin. It signifies the end of planning as we have known it for over six decades, says Alam Srinivas<\/p>\n","protected":false},"author":78,"featured_media":229616,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[56],"tags":[9218,316,3366,8918,9226,9227],"_links":{"self":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/229612"}],"collection":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/users\/78"}],"replies":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/comments?post=229612"}],"version-history":[{"count":0,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/229612\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/"}],"wp:attachment":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/media?parent=229612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/categories?post=229612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/tags?post=229612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}