Prime Minister Narendra Modi would turn a new page in the history of India’s economic management should he decide to appoint Arvind Panagariya, former chief economist at the Asian Development Bank and current NITI Aayog vice chairman, as the governor of the Reserve Bank of India (RBI) – in place of Raghuram Rajan, who will vacate the position on 4 September.
In the history of India’s economic planning, NITI Aayog – and its forebear Yojana Aayog (Planning Commission) – is considered to be a critical institution, that was created by an executive order and not by law. Yet, it occupies a very exalted position in the government’s scheme of things.
Take for example the important tasks assigned to the NITI Aayog by the Narendra Modi government, since it replaced the Planning Commission. The Aayog, for the first time, has been assigned the task of scrutinising each of the ministries and to periodically analyse their performance, once every three months. Though the practice has just begun in the right earnest, it has already led to discomfiture in many of the ministries in the government.
Some of the Cabinet ministers are not amenable to regular scrutiny, and they find it quite humiliating to be held accountable for their words and promises of progress, made in front of the prime minister.
Additionally, the NITI Aayog’s agenda consists of carrying out major reforms in education, health and other social sectors without going through the formal bureaucratic maze. For instance, Panagariya was made chairman of the innovation committee that approved the Rs 98,000 crore Mumbai-Ahmedabad bullet train project.
Similarly, many education sector reforms – like creating world-class universities by allowing foreign investment in the education sector – are being pushed through the NITI Aayog.
But the most important task assigned to the Aayog is of drafting the vision document for the Indian economy, for the Modi government. The document, that would envisage the planning for a 15-year period, would define long-term goals for the Modi government. Remember that Modi, while scrapping the Planning Commission, had pointed out that the new body would take a long-term view of the Indian economy.
Those working with NITI Aayog point out that if one were to look at the agenda of the Aayog, it would become clear that Pangariya and his team are veritably up to their necks in responsibilities. But with Amitabh Kant joining as chief executive officer (CEO), at least the implementation of NITI Aayog-induced changes in the policies has been taken care of.
“We have not gathered any sign suggesting a shift for Panagariya, as he is totally engrossed in his work,” a senior official of the Aayog said.
At the same time, there is a hierarchical issue involved in shifting Panagriya from the NITI Aayog to the RBI. If one were to look at the records, the post of vice chairman of the Planning Commission was often held by leaders with formidable reputations.
Pranab Mukherjee in the PV Narasimha Rao government, and KC Pant in the Vajpayee regime – both one of the senior-most ministers in respective cabinets – were regularly invited to attend the cabinet committee on security (CCS), the apex cabinet forum in the government.
Similarly, Montek Singh Ahluwalia was given the status of cabinet minister and had occupied an exalted position from where he could regulate policies. At times, there have been instances in the UPA government when the finance ministry and the planning commission worked at cross-purposes. At such times, the Planning Commission often acted on the PM's behalf to keep a check on the finance ministry.
As of now, all indications suggest that the NITI Aayog has acquired an eminent status in the government, with Panagariya as its head. In the past, there have been instances of ex-RBI governors taking up assignments in the Planning Commission, but never the other way round.
In this context, if the prime minister chooses to shift Panagariya from the NITI Aayog in Delhi to Mint Road in Mumbai, he would not only turn a new leaf but could also expose himself to charges of having a cavalier approach towards the economic vision of the country.
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Updated Date: Jul 13, 2016 11:08:37 IST