NITI Aayog and the emperor’s clothes

Live Mint, May 25, 2017

By Pradeep S. Mehta

Instead of letting the government set the agenda, NITI Aayog needs to inform the government of its failings

A clear action agenda on how policies should be implemented would have been welcome. Photo: Pradeep Gaur/Mint
About 180 years ago, in 1837, popular Danish author Hans Christian Andersen wrote the famous short story, The Emperor’s New Clothes. The story reminds us of the duties of advisers to the king, who are expected to present a clear picture to the king, and give fair and frank advice, without fear or favour. It is pertinent to revisit the story now when the Narendra Modi government is celebrating three years in office.

One of the key decisions taken by the government on assumption of office was to dismantle the Planning Commission, and replace it with a new body, the National Institution for Transforming India (NITI) Aayog. NITI Aayog was expected to act as the principal government think tank and adviser to the Prime Minister on key policy issues, which can really transform India.

Expectations unfulfilled

The Planning Commission was a non-legislative body, with significant powers to allocate finances to states, but marred by bureaucratic processes and devoid of fresh thinking. It failed to keep its ear to the ground, and did not take into account the divergent demands and capacities of states. The creation of NITI Aayog was expected to be a game changer, to infuse new vigour and rigour in the policy planning process, involve key stakeholders, and address the failures of the previous plan body. One anticipated that it would prioritize the challenges faced by the economy and hit the ground running to address them in a transformational manner.

During the last two-and-a-half years, NITI Aayog has worked on several agendas, such as the promotion of digital payments, reforms in agriculture, education and railways, helping states undertake social sector reforms. While all these issues were important, and the suggestions made by NITI Aayog critical, it appears that the institution’s agenda and priorities are being set by government diktat rather than an organic, independent thought process. Often, it risked acting as a government mouthpiece and failed to be the transformational catalyst that many, including Prime Minister Narendra Modi, wanted it to be. For instance, while recognizing the importance of competition, it walked with the government on promoting digital payments through select entities, and kept mum when government policies distorted competition.

NITI Aayog is yet to institutionalize a checks and balances mechanism to caution the government about the claims it makes, and apprise policymakers of the ground realities. While there have been a few exceptions, like Bibek Debroy’s suggestion on taxing farmers’ income, which challenged the government’s stand on the issue, such instances have been rare.

Action(able) agenda?

NITI Aayog recently released a draft three-year action agenda, which is part of a 15-year vision and seven-year strategy document. Other documents have not been released in the public domain as yet. True to NITI Aayog’s diffused working approach, the action agenda covers a wide range of issues, including the fiscal framework, agriculture, industry, services, transport, digital connectivity, public private partnership, energy, science, technology, governance, taxation, competition, environment, forests and water.

Such a wide-ranging approach is not what one would expect when dealing with imminent challenges. For example, while covering pertinent issues and providing important recommendations such as “Price Deficiency Payment” to remove distortions in the existing minimum support price mechanism in the farm sector, there is limited clarity on how, by whom, and the timelines within which such suggestions would be implemented. The recommendations have no common binding theme, and there’s an absence of prioritization.

Rather than a document infusing fresh thinking, the action agenda appears more like a document collating several policy-related recommendations provided by experts and government-formulated committees over the years. It puts limited or negligible focus on implementation challenges, bureaucratic reforms and government-citizen interaction, which is core to several good ideas remaining on paper and being left unimplemented.

Focus on implementation

Rather than focusing on policy-level recommendations, NITI Aayog would have done better had it dealt with implementation-related challenges. A clear action agenda on how policies should be implemented, the creation of a feedback loop, taking into account changes on the ground, and fixing accountability of babus, would have been welcome. In addition, it should have focused on process reforms. While many of its recommendations, such as the creation of coastal employment zones, are interesting, the costs of implementing such recommendations must be compared with expected benefits in the medium term. A comparison of the costs and benefits of different policy alternatives should be made mandatory before policy recommendations are made.

It is time NITI Aayog starts reminding the government where it is falling short and what needs to be done differently, or the government will meet a fate similar to the emperor in Andersen’s story.

Pradeep S. Mehta is secretary general of CUTS International.

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