To plan or not to plan: that is the question -Deepak Nayyar

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published Published on Jun 12, 2016   modified Modified on Jun 12, 2016
-Livemint.com

It is not possible to provide ‘maximum governance’ with ‘minimum government’. We need ‘good government’ for ‘good governance’, says Deepak Nayyar

The erstwhile Planning Commission closed down soon after Prime Minister Narendra Modi announced the decision on 15 August 2014. Its demise was attributable partly to the ideological belief that planning is passé in this age of markets and globalization and partly to its poor performance combined with growing irrelevance.

The NITI Aayog was established in its place on 1 January 2015. Eighteen months later, it is struggling to find its niche in the government. It is definitely not a commission on policies that its name in Hindi suggests. And its search for an identity is elusive. There is no evidence, yet, that it can become a National Institution for Transforming India, the grand title embedded in its English acronym NITI.

The irony is that there is a strong rationale for such an institution in India, despite the profound changes since 1950. Market forces matter much more, both in the national economy and the world economy, which makes it essential to rethink and redefine the role of the government in a market economy. With the passage of time, sharper departmental divides and shorter time horizons are characteristics of the government, which makes it necessary to think big and to think long in terms of ideas. In principle, both these tasks could be performed by NITI Aayog, but only if it acquires the ability to think independently and the stature to command political support.

The need for an institution, which can reflect on redefining the government’s role in the economy and engage in long-term strategic thinking about development, is clear from the complexity of solutions to the problems confronting us. India is a land of multiple crises. It would suffice to focus on three quiet crises in the economy—in agriculture, industry, and infrastructure—which loom large as determinants of future prospects. Indeed, these are binding constraints on our economic performance, which need strategic thinking on what can be done and how it is to be implemented. Seeking quick fixes, or attempting to postpone the day of reckoning, can only mortgage our future.

There is a crisis in agriculture that runs deep, perhaps much worse than it was in the mid-1960s, which cannot be ignored simply because it is silent. Even so, there is little discernible cognition. Farmers’ suicides are reported in newspapers. Maoist movements are considered law and order problems. But neither of these is recognized as symptomatic of agrarian distress or a deeper crisis in rural India, where modest economic growth has been associated with negligible employment creation. The agricultural sector accounts for a small proportion of GDP (gross domestic product) although it supports a large proportion of the population in terms of livelihoods. In fact, GDP per capita in the agricultural sector has been less than one-tenth that in the non-agricultural sector for the past 25 years. Yet, its political significance shaped by its share of votes in a democracy is directly proportional to its share in the population. Its potential economic significance is also considerable since incomes from agriculture could drive economic growth from the demand side.

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Livemint.com, 10 June, 2016, http://www.livemint.com/Politics/LMG7le9RsMTKYKKFeVH1iP/To-plan-or-not-to-plan-.html


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