Paying the Price
Arvind Panagariya’s contrarian line of thought and ‘passive approach’ are being cited as reasons for his exit.
Panagariya’s contrarian line of thought is being cited as the reason for his exit
The exit of NITI Aayog Vice Chairman Arvind Panagariya may have surprised many, but the writing had been on the wall for a while. Although Panagariya, a free market economist, said the Columbia University is not willing to extend his leave, he could not meet expectations of people who matter, including those in the Prime Minister’s Office ( PMO). In the last 27 years, Panagariya is the first head of a government think tank to resign before the tenure of the PM expires (Jaswant Singh did it in 1998, but to join the cabinet). The tenure of the vice chairman runs concurrently with the term of the PM.
Within days of Panagariya resigning in early August, the government appointed conservative economist Rajiv Kumar in his place. NITI Aayog, which replaced the erstwhile Planning Commission, was set up to bring in bottom-to-top thinking, make decisions more practical and increase participation of state governments.
Neither BJP officials nor cabinet members commented on his exit, but in private they admit that Panagariya’s tenure was lacklustre. But his colleagues couldn’t hide their ‘excitement’. Fellow member Bibek Debroy took a potshot with this tweet: “The foreign influence wanes, so read the weather vanes. Filthy lucre of a foreign land/ Has sullied many a hand/ And fogged the brains.” He was backing vice chairman designate Rajiv Kumar’s comment that the influence of Indian-American economists was fading away as part of the ongoing transformation in the government. Panagariya is the second US- based economist to go, after former RBI Governor Raghuram Rajan.
Panagariya was criticised for NITI Aayog’s passive approach. “The biggest reform the NDA government brought in is GST. A government think tank should have brought in a paper of the probable challenges the country might have to face and the ways to tackle it. This would have smoothened the way for implementation of this tax reform,” says Kashmiri Lal, national convener of SJM –and one of the fierce critics of NITI Aayog’s working.
But his exit is being seen as a ‘transformation’ in thinking in government quarters. Panagariya couldn’t hide his ‘unhappiness’ last year at the pace of reforms in the NDA government. But his critics see this as his lack of understanding of the diversity of India. They say his ideas and reports couldn’t shape the NITI Aayog’s line of thought. Critics attribute this to the lack of leadership or the split in the thought process. However, Panagariya has denied dual power centres within NITI Aayog.
Panagariya burnt bridges with the RSS, post NITI Aayog’s report on contentious issues, including GM crops, disinvestment and health care. “All along, we opposed jobless growth. It was hard for us to implement many of his recommendations,” says a cabinet minister. “Our economic philosophy revolved around production, employment and distribution, but nothing much was done,” he adds.
Although the government accepted his proposal for a strategic sale in Air India and the stake sale of various PSUS, it continued to strengthen many others. The oil ministry has been asked to work out the mergers of ONGC with HPCL, and Indian Oil with OIL. The PMO had asked NITI Aayog to look into the viability of sick state- run companies. Instead, it handed over a list of companies that could be closed down, says Ashwani Mahajan, co-conveyor of SJM. “Certain PSUS might be making losses because of legacy issues. Our idea is to revive them wherever possible,” says another minister. ~
His exit is being seen as a ‘ transformation’ in thinking in government quarters