With Rajiv Kumar at the helm, NITI Aayog is safe; powerful PMO, swadeshi lobby may pose challenges for him

All those who were worried that Arvind Panagariya’s exit from the The National Institution for Transforming India, also called NITI Aayog would mean a setback for the still unfinished economic reforms process can heave a sigh of relief. In Rajiv Kumar, who has been named as Panagariya’s successor, the NITI Aayog once again gets to be headed by someone who believes in markets and an open economy even as he concedes that the state has a role in certain areas. So there will be continuity at least in terms of the ideological moorings of the NITI Aayog. Beyond that, of course, there are stark differences between the first and second vice-chairpersons of the body that replaced the Planning Commission. Kumar is no ivory tower academic plucked from a foreign university, a charge that could be levied against Panagariya (though he has been a keen and perceptive observer of the Indian economy). He has worked in India through much of his career – with government, think-tanks and industry. So, he knows things work and don’t. Though Panagariya had studied the Indian economy closely from Columbia, he was essentially a trade economist. Kumar has a more all-rounder reputation, having dealt with foreign trade, financial sector, liberalisation, issues facing the Indian industry. He has a comprehensive view of the developmental challenges facing India, a trait that will be useful in his current role. In the run-up to the 2014 elections, he and long-time associate Ramgopal Agarwala worked on a blueprint for economic policy for Prime Minister Narendra Modi. The result was a book, Resurgent India: Ideas and Priorities, authored by them and Rajesh Shah, which sets out what can be done over a 10-year period. It covers everything from macro economic issues, to sectoral issues including agriculture, health and education as well as governance and federalism. Kumar is also someone who will be a better administrator than Panagariya was. Panagariya tended to be aloof and did not quite take the whole NITI Aayog along with him. Nor was he able to deal with an assertive chief executive officer who was a dyed-in-the-wool bureaucrat, was familiar with The System and had his own equation with the Prime Minister’s Office (PMO). Kumar, too, is affable and soft-spoken like Panagariya but, according to an economist who knows both, will be able to carry people with him better than his predecessor. [caption id=“attachment_3898727” align=“alignleft” width=“380”]  File image of Rajiv Kumar. Twitter @RajivKumar1[/caption] Like Panagariya, Kumar too is a small town boy, in a sense, from a middle class family where education was highly valued. Panagariya grew up in Jaipur. Kumar spent his first 11 years in Lucknow and then, being a bright student, got a scholarship to the prestigious Modern School, Delhi. His next stop, St Stephens. Here, he got caught up in the romance of the Naxalite movement, much to the consternation of his parents. But it didn’t take long for the disillusionment to set in and sanity to prevail. He returned to academics and got a PhD from Lucknow University and a D. Phil from Oxford University. This needs mentioning if only to show that Kumar’s ideological transition from Marx to the market was not a bookish one, but one that stemmed from close encounters with reality. His belief in the markets is a nuanced, rooted one. Kumar has an ideological affinity towards an open economy and free markets, but he is unlikely to float or entertain off-the-wall ideas just for the sake of ideology. At the Federation of Indian Chambers of Commerce and Industry (FICCI), he would not just blindly advocate policies but would insist on the recommendations being based on solid empirical research. It didn’t always endear him to the corporate bigwigs, though. Kumar’s first big challenge could well be to get a sense from the Prime Minister what he expects the NITI Aayog to be. What could stand him in good stead is that he appears to have a sense of what India needs. In his book, Modi and his Challenges, Kumar talks about the three simultaneous transition – economic, political and social – that India is going through and how India needs to work on its own model of development. “India cannot succeed by following some weather-beaten development model or economic theology. Neither the Washington nor the Beijing consensus can be adopted wholesale in India. There will inevitably have to be an Indian model that is derived from the ground realities upwards.” The think tank he and Agarwala founded is called PAHLE India Foundation. Next, he will need to get for himself freedom to shape NITI Aayog in the way he wants. Possible roadblocks could emerge from both within the NITI Aayog as well as a powerful Prime Minister’s Office (PMO. Kumar’s affable nature could be put to extreme test. His knowledge of how things work and don’t work will have to be supplemented by making things work. Dealing with the swadeshi lobby will be another challenge. Pangariya tended to ignore them and other stakeholders in specific areas, which ended up going against him. Kumar is not likely to do this, but he will have to be more careful and diplomatic and take care to have wide-ranging consultations. There are certain issues on which the Sangh Parivar is unwilling to compromise and these are not always compatible with the liberalised economy Kumar believes in. One question that has been repeatedly asked since his name was announced was – Is he a yes man? Kumar is not a confrontationist but he is known to stand up for what he believes in. That has led to problems at both the Confederation of Indian Industry (CII), where he was chief economist, and later at FICCI. In his newspaper columns, he has expressed his disappointment at the slow progress on economic reforms by the government. He has not shied away from saying the Prime Minister must speak up on the vigilante attacks and the various cases of lynchings. Will getting a prestigious post in the government change him and make him a Yes man? Time alone will tell. For now, NITI Aayog is in good hands.