NITI Aayog: An institution to fix implementation issues

Live Mint, July 24, 2017

By Pradeep S. Mehta

NITI Aayog is responsible for monitoring and evaluating government schemes but its performance is below par

During his last monthly radio address, Prime Minister Narendra Modi appreciated the importance of constructive criticism in strengthening democracy and the government’s performance. Enough debates do take place in the country on these aspects though some are too stark and/or too polite. Modi also welcomed independent evaluation of government initiatives—these messages are forward-looking.

Governments in the past have devised different mechanisms to facilitate monitoring and evaluation. An independent evaluation office was set up under the earlier regime but wound up after this government assumed office. It appears that the development monitoring and evaluation office at NITI Aayog is currently responsible for monitoring and impact evaluation of centrally funded programmes. However, we are yet to witness significant improvement in this domain.

Independent monitoring and evaluation is important but not sufficient to ensure the success of policy reforms. It aids in identifying implementation-related challenges but falls short of transforming implementation, which is the need of the hour. This was the central message of a recent debate run by CUTS International Public Policy Centre on the role of NITI Aayog in the context of changing economic realities.

It was pointed out that NITI Aayog is already engaged in outcome-based monitoring with states in sectors such as healthcare, education and water supply. It is now mooting the idea of ranking each state based on health, education and water index, and identifying “champion states”. For instance, it has developed a composite water management index, comprising several key performance indicators, with different weights assigned to indicators. This is expected to incentivise states to collect data and analyse it to make better policies.

This approach of measuring and monitoring progress through ranking and encouraging competition among states is akin to the approach adopted in promoting ease of doing business reforms. Interaction with key stakeholders in different states suggests that owing to self-ranking by states sans independent review, reforms remain mostly on paper with key concerns remaining unaddressed. Moreover, such approach might result in a race to the bottom, as legitimate beneficiaries get excluded by lowering of targets. The vision at the top level of polity and bureaucracy is unable to percolate to the middle and entry levels, resulting in limited change on the ground. Consequently, such approach of self-ranking and comparing needs to be viewed with caution.

The government needs to realize that a business-as-usual approach will work no more, and it needs a comprehensive strategy to transform implementation. Such strategy must comprise working with key stakeholders to identify implementation-related challenges and design solutions. Further, a rigorous independent ex-ante and ex-post assessment of solutions is necessary. Experts suggest that significant improvement in the ability to implement policies and projects in the states, cities, and at the centre can considerably add to citizens’ well-being and could even add about 2-3% to the country’s gross domestic product (GDP), without any additional resources.

Impediments to implementation include capacity constraints, inadequate resources, lack of incentives to perform, no disincentives for non-performance, absence of policy and regulatory clarity among others. These could differ with sector, geography and demography. Identifying such impediments is a tough ask, which would require NITI Aayog to have many more eyes and ears on the ground. To this end, NITI Aayog could leverage available local skills for providing independent inputs and feedback.

Similarly, NITI Aayog will need to design customized solutions depending on the impediment. For instance, a policy or regulatory bottleneck could require regulatory impact assessment to identify superior regulatory alternatives; convincing incumbents and potential losers for reform could require implementation of transformation change methodology; and customized training could be needed to deal with capacity constraints. In designing these relevant solutions, NITI Aayog should bank on external experts.

There could be vertical and horizontal coordination challenges which would require NITI Aayog to act as catalyst to enhance implementation capabilities and improving outcomes, rather than merely measuring them. Further, data plays a key role in identifying causes and designing solutions. Agencies grappling with implementation should not be burdened with additional responsibilities of data collection and analysis. Independent agencies could be engaged to collect granular data and design different scenarios.

It is high time that NITI Aayog realizes that it needs to metamorphose into an organization which can transform implementation of policy reforms in the country. It should be in a position to garner available independent expertise and capacity to objectively analyse specific governance or development challenges in a non-partisan manner, and design and implement solutions at different levels of governance. Over time, it must create a repository of best practices for dealing with implementation challenges, based on case studies from around the world. This strategy can aid NITI Aayog to achieve its objective of transforming India. Surely, the management of NITI Aayog is capable of rising to these challenges.

Pradeep S. Mehta is secretary general of CUTS International.

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