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Is the NITI Aayog going beyond its brief and shooting from the hip?

NITI Aayog
In the run-up to the Global Mobility Summit last week, organised by the Niti Aayog, its officials were concerned that some central ministers and state ministers would give the event a miss. In order to forestall such an eventuality, the Aayog rung up the Prime Ministers’ Office to ensure their presence. It helped.

Niti Aayog has, of late, been getting into the hair of some of the departments of the BJP government, regulators and even some of other supporting cast of institutions. Ergo, the calls to the PMO. (See Box: Lip (dis)service) The latest of those episodes came in early September, when Rajiv Kumar, vice-chairman of Niti Aayog, hinted in an interview that it was the action of former Reserve Bank of India (RBI) Governor Raghuram Rajan in recognising bad loans from banks more vigorously, and not demonetisation, that had slowed growth.

Vice chairmen of the Planning Commission, Niti Aayog’s predecessor, have been more circumspect in taking on the RBI, confining themselves to observations on the interest rates. Kumar’s comments were, instead, on the role of the RBI as a banking sector regulator.

Former senior government officials Business Standard spoke to, said while the Aayog has enough operating space to speak on diverse topics, some of the communication often gave the impression that the positions were not the considered views, but were made off hand.

Pronab Sen, who was a Principal Advisor in the Commission with the rank of secretary, said the observations in his time would be first fleshed out among the members before being made public. “I am not sure if this is the practice being followed now as well,” he said. Agreeing with him, Nitin Desai, former under-secretary general at the United Nations said some of the positions also “create space for the PMO to avoid the flak”.

In April this year, Kumar waded into another controversy with the 15th Finance Commission headed by N K Singh. At the annual session of Confederation of Indian Industry, Kumar said, “I think it is clear the formula (for devolution of taxes to states) has to include some performance-based criteria, so that those states which have done better in certain parameters should, of course, not be punished”. As a member of the Commission subsequently remarked on condition of anonymity, the position has put them on the defensive.

Again, the Aayog has little to do with the allocation of tax revenue among the states, which is the remit of the successive Finance Commissions. States make competing claims, each pitting a position that suits them the most. Experts agreed that it made sense for the Niti Aayog to give its opinion on tax issues preferably as a written document, given the huge sensitivity of the topic. “The erstwhile Planning Commission wouldn’t make public comments as much as NITI’s leaders are making. It would send its views to the ministry or government agency concerned. However, with the rise of social media, it has become the habit of policy-makers to comment frequently and publicly. For example, it was not the culture of government previously for ministers and secretaries, etc to tweet,” noted Arun Maira, former member of the Commission.

As Anup Pujari, former secretary, mining and now a visiting professor at Harvard Kennedy School puts it: “Some (members of Niti Aayog) are delightfully articulate and hence get wider coverage and attention. Their views, like anybody else’s, must be scrutinised and critiqued, not just accepted (at face value).”

An example of such critique was on display in March, when Ramesh Chand’s paper on agricultural crop prices ran into opposition from the Swadeshi Jagran Manch, an RSS affiliate. The Aayog member’s paper, “Ensuring MSP benefits for farmers”, had examined the impact of a sharply higher minimum support price for all agricultural crops committed by the Centre. His report concluded this would raise farm gate prices by about 15 per cent, which would stoke inflation. The Manch was incensed enough to call the conclusions “a blatant lie” in a letter to the Prime Minister.  

Ashwani Rana, general secretary, BMS, the trade union affiliate of RSS, said, “The Aayog often prescribes policies without talking to us, the stakeholders. They talk on everything.” This view was supported by the retailers’ body, the Confederation of All India Traders. They took on the CEO of the Aayog, Amitabh Kant, accusing him of being “much away from the ground realities of e-commerce business conducted in the country”. It was a somewhat fair argument, says Sachin Chaturvedi, director general of RIS, a Delhi-based think tank.

Pujari says it is impossible in the nature of things for two government departments to hold identical views on any subject. “The members are professional and offer their views based on their research. Obviously, it cannot please all, neither should it aim to,” he says.

Maira also said: “Like the look-out on the hill-top, it is its duty to point out risks and opportunities for the country that it can see from its vantage point.”

To be fair, all these and more are controversies that have emerged from the role ascribed to the Niti Aayog, as a think tank for the government. As Sen put it, there is really nothing beyond their remit. Maira concurs, saying, “It is the only institution of the government which is in a position to take a holistic forward view.”

“At the core of NITI Aayog’s creation are two hubs—The Team India Hub leads the engagement of states with the Central government, while the Knowledge and Innovation Hub builds NITI’s think-tank capabilities. These hubs reflect the two key tasks of the Aayog”, is how its website defines its role. Government managers involved with Niti Aayog during its formation put it more simply. They said it was broadly modelled on China’s National Development and Reforms Commission that dominates the policy agenda of Beijing, to which the ministries play a subservient role.

While Niti Aayog has not earned the same billing, its attempts to examine government policies often as an in house critic, as in the case of electric vehicles, has possibly got under the skin of other agencies. The government’s work to defend its employment creation record has been spearheaded from the Aayog. The labour ministry run EPFO and ESIC was asked to share their data with the Aayog directly instead of routing those through the ministry. It led to the creation of India’s first monthly payroll data exercise.

These exercises show its salience in the political structure with the support of the Prime Minister’s Office, say officers. None of its prescriptions has been asked to be revisited by so far, unlike the Planning Commission’s fate under the UPA. The ministers thus, showed up for the Global Mobility Summit.

Differing Takes

1. Drug pricing: Swadeshi Jagran Manch accuses Niti Aayog and others of trying to sabotage the Prime Minister’s vision of making medicines accessible to the poor at affordable prices: “Aayog is lobby centre to push the agenda of multinational corporations” —May 2017

2. E-vehicle policy: Ministry of road transport and highways asks Niti Aayog to cut down multiple missions distracting work on the zero-emission vehicles. Asks for minister to be made chairman of body to decide policy—“A small group of experts and officers under Principal Secretary/Cabinet Secretary may be constituted to frame a more focused approach towards electric mobility” — March 2018

3. Demonetisation: “(NPA) rose to Rs 10.5 trillion by the middle of 2017, because under the previous RBI governor Mr Raghuram Rajan, they had instituted a new mechanism to identify stressed NPAs. This continuously began to rise” — Rajiv Kumar, September 2018

4. State taxes: “It is clear the formula (for devolution of taxes to states) has to include some performance-based criteria so that those states which have done better in certain parameters should of course not be punished” — Rajiv Kumar, April 2018

5. MSP for farmers: “We at Swadeshi Jagran Manch find the report (by Ramesh Chand) titled 'Ensuring MSP benefits for farmers' and the statement…to be a blatant lie, and adds insult to the injury of farmers” — SJM, April 2018

6. E-commerce policy: “It looks that such bureaucrats (Amitabh Kant) are more interested in foreign companies rather than domestic trade and industry. The Confederation of All India Traders strongly condemn such mental state of the bureaucrats and it is beyond expectation” — CAIT, August 2018

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