Who’s Afraid of NITI Aayog?

FOR A TRADE unionist, Virjesh Upadhyay is rather calm and collected, even under work stress. But when he talks about the National Institution for Transforming India (NITI Aayog) and its myriad recommendations to the Government of India in various sectors, especially for easing labour laws and for disinvesting sick public-sector units, the general secretary of the Bharatiya Mazdoor Sangh (BMS) can’t hold back his anger. CK Saji Narayanan, the newly elected national president of the BMS, who talks about ‘reconciliation’ in place of ‘aggression’ on the part of trade unions, discloses to Open that BMS, the country’s biggest trade union, has passed a strongly worded resolution at its national conference in Kanpur (held from May 22nd-24th), asking the Narendra Modi government to ‘totally reorganise’ the think tank formed in early 2015 with Columbia University economist Arvind Panagariya as vice- chairman. Baij Nath Rai, a BMS veteran, contends that nobody within this two-year-old entity that replaced the decades-old Planning Commission, has an ear to the ground. “These guys are misguiding the government and are only interested in the welfare of private sector honchos,” avers Narayanan. Lakshma Reddy, a senior Hyderabad-based BMS functionary, can’t agree more. The overarching mood at the high-level Kanpur conclave of the powerful trade union affiliated to the Rashtriya Swayamsevak Sangh (RSS) is that NITI Aayog currently comprises only ‘ivory- tower dwellers’ who also end up being ‘standoffish’. Leaders of the Swadeshi Jagran Manch also state that NITI Aayog is functioning like a ‘super cabinet’, hurling directives at ministries on a ‘whim’. They are upset that senior officials at NITI Aayog aren’t even ready to have a dialogue with them. Accusations have also emerged that NITI Aayog gets ‘orders’ from a ‘very senior Government official’ and is used to push reforms inside a Government that wants to effect a pro-poor posturing for political reasons. In the process, the organisation has effectively become a turf for a proxy war between the formidable Swadeshi-trade union brigade within the Sangh Parivar and the Union government.

Reforms have often birthed enemies, within and without. But what puts NITI Aayog in a precarious position, admits an insider, is the lack of ‘inter-personal skills of its vice-chairman’. Panagariya, an academic of repute and a newcomer in Government, has often been accused by even other members and senior officials at NITI Aayog of ‘being too sensitive to be in Government’. While Panagariya has expressed hope, in a 2016 interview with Open, that he wants the newly created entity to be far more cohesive that it was, officials Open spoke to claim that it is easier said than done. Panagariya had responded to a question about improved cohesion within the organisation. “I surely expect the interaction among staff and different verticals to intensify greatly in the coming year. I am thinking of creative ways by which we can break the tradition of different parts of the organisation working in silos. We also want to bring greater cohesion to the leadership to take advantage of potential synergies. So the answer to your question on greater interaction within the body is a resounding yes,” he said.

More than a year later, at least three officials at NITI Aayog that Open spoke to say that they didn’t see the draft of the much- touted ‘Three-Year Action Agenda’ until the day before the April 23rd meeting of NITI Aayog’s Governing Council. “The agenda, which is part of the ‘Fifteen Year Vision, Seven Year Strategy and Three Year Action Agenda’ of NITI, was immediately questioned by the state chief ministers and others who were present at the meeting. It was the prime minister who saved NITI embarrassment by saying that it was only a draft and suggestions from the members would be incorporated later,” said a senior NITI Aayog official. Panagariya didn’t respond to questions from Open. Earlier, many states had lashed out at NITI Aayog for dispatching circulars to IAS officers, calling it a violation of federal values of this country. Kerala Finance Minister TM Thomas Isaac had mocked NITI Aayog for being ill-informed and inexperienced. “NITI Aayog is only an advisory body with limited powers,” he said in an interview.

Going beyond its brief is a charge against NITI that persists. And it isn’t just the trade unions, anti-reform agitators and the Swadeshi brigade who are piqued by the absence of any dialogue before NITI Aayog thrashed out its recommendations. A state minister said that NITI Aayog’s instructions are “often encroachment on to the powers of the ministries”. However, a NITI Aayog official says that some ministries “first agree with our suggestions and later complain about encroachment on to their turf. That makes no sense”. The railway ministry has not had the best of relations with NITI Aayog when it comes to discussions on divesting various units under Indian Railways. “The ego clash is mild because ministries concerned now know very well where the actual directives come from,” says another official close to the matter.

Other recommendations by NITI Aayog also touched a raw nerve. While Nripendra Misra, principal secretary to the Prime Minister, didn’t respond to requests for an interaction on the issue, charges abound that senior bureaucrats in the Government are employing NITI Aayog to help meet the economic targets of the Government—and that includes vexed issues such as new labour laws that attract investors and sale of ailing state-owned enterprises. An official with NITI Aayog would only say that “we are ready to stick our neck out for the Government but political pressures keep mounting every passing day”.

For his part, Prime Minister Modi has categorically said that the think tank’s long, medium and short- term action plans would benefit all states. “NITI Aayog is working on a 15-year long-term vision, seven-year medium-term strategy, and three-year action agenda,” he had said in April-end in his address to the NITI Governing Council. The council, which is the apex body of the NITI Aayog, is headed by the Prime Minister and includes all chief ministers and the think tank’s members. On the occasion, Modi had also outlined his vision of a ‘New India’ in cooperation with the states, which was widely reported in the media. He had flaunted the creation of sub-groups at NITI Aayog of chief ministers for centrally sponsored schemes like Swachh Bharat, Skill Development and Digital Payments as key achievements. The Prime Minister also coined the phrase, ‘One nation, One aspiration, One determination,’ highlighting the consensus achieved over the unified Goods and Services Tax legislation in the country. He also used the opportunity to call for a discussion on simultaneous Central and state elections.

A senior BJP leader captures the problem at hand for the Centre. “The Government wants to strengthen itself by strengthening its party, the BJP, across states. It cannot afford to have a pro-rich image, especially at a time when the country is passing through a slow job-creation cycle. At the same time, it has to push through crucial reform measures to be able to create future jobs. See, at a time when supporters of the BJP are lashing out across platforms, from TV to elsewhere, against the elite Lutyens’ Delhi people and in support of soldiers, the party cannot openly advocate what would be perceived as corporate-friendly measures,” he explains. “This is a major dilemma,” he adds, suggesting why it makes a lot of sense for the Government to “spoon-feed” NITI Aayog into making reform-oriented suggestions that could be implemented. Concedes a senior NITI Aayog official, “I must say the Government, after having diagnosed internecine issues, has virtually taken over NITI Aayog, sensing that there is an opportunity and also because there is a need to do some backseat driving.” In fact, high-profile bureaucrat Amitabh Kant was brought in as CEO at NITI Aayog last year to liven up things in the organisation. For his part, back then, Panagariya had said he looked forward to working with him. The economics professor and a close associate of Professor Jagdish Bhagwati had also hinted that he was aware of sporadic criticism of his leadership. Interestingly, NITI Aayog was conceived with ambitious goals, but in generic terms: ‘Through its commitment to a cooperative federalism, promotion of citizen engagement, egalitarian access to opportunity, participative and adaptive governance and increasing use of technology, the NITI Aayog will seek to provide a critical directional and strategic input into the development process. This, along with being the incubator of ideas for development, will be the core mission of NITI Aayog.’ Certainly, for such an organisation to forge ahead in the face of numerous teething problems requires a strong leader. “Look at the work allocation chart among vice-chairman and members in NITI Aayog and you will realise it is still far from being a cohesive entity,” says an official close to the matter.

Yet, much more than issues of leadership is the state of being sandwiched between a competent Government and a brash opposition within that puts NITI Aayog in a precarious situation. “It is unthinkable that the entity would make tall suggestions that benefit the pharmaceuticals lobby without getting the Government to vet it,” says a Swadeshi activist and a former BJP heavyweight. According to the minutes of the meeting held in October last year at Nirman Bhawan between NITI Aayog CEO and secretaries of ministry of health, department of pharmaceuticals and department of industrial policy and promotion, deregulation of drug pricing was discussed. Which means that NITI Aayog wants to push ahead with delinking of the National List of Essential Medicines (NLEM) from the Drug Price Control Order. To put it simply, such a move will mean the end of affordable drugs in the country. Health minister JP Nadda himself has come out saying it is a suggestion by NITI Aayog, which has circulated a draft of the proposal in his ministry. This recommendation goes against the public statements of Prime Minister Modi who has insisted time and again that the poor must have access to quality and affordable healthcare. “How come an entity that works in tandem with the Prime Minister’s Office has come up with such a suggestion?” wonders a senior health ministry official based in Delhi. “There could be more to it than meets the eye.”

S Srinivasan of the All India Drug Action Network, an organisation that advocates easier access to essential drugs for all, says implementing NITI Aayog’s recommendation is an unwise move both in terms of making medicines affordable as also politically. “If Modi is aiming for a second term, this will make a dent on the pro-poor image he is trying to project. It also gives signals that the Government has buckled to the big pharma lobby—both Indian and MNC—who think only of bottom lines but not of healthcare for all,” he says. He is of the view that the adverse effects of price control of drugs are exaggerated by vested interests. Despite price control in the Indian market, domestic sales of the pharma industry have soared from around Rs 70,000 crore in 2013 to Rs 1.2 lakh crore now, he states. “Delinking means price control is only on what the bureaucrat thinks fit. It also is to be accompanied by the dismantling of NPPA (National Pharmaceutical Pricing Authority) as such,” Srinivasan argues. NPPA monitors shortage of drugs and control prices of medicine to keep essential medicines affordable. Union minister Ananth Kumar has also opposed NITI Aayog’s recommendation.

While some NITI Aayog officials attribute ‘labour aristocracy’ to the wave of criticism against them, their opponents argue that the indifference of NITI Aayog officials to the poor man’s concerns is to blame. Panagariya didn’t reply to specific questions on BMS’ charges against NITI Aayog. The union’s outbursts against NITI had started many months ago, after NITI Aayog came up with a proposal to privatise Air India and shut 28 PSUs. BMS and various other trade unions had accused its officials of being in a hurry to sell the country.

Meanwhile, a handful of officials who have watched India’s liberalisation moves over decades state that there is nothing new in the Government getting NITI Aayog to forge ahead with reforms. “In many cases, NITI Aayog is doing what the Prime Minister’s Economic Advisory Council and the Deputy Chairman of the Planning Commission were doing while Manmohan Singh was in power. Let’s not forget that Manmohan Singh had faced a BMS- SJM kind of opposition to reforms from the camp led by Congress President Sonia Gandhi, who was advised by a Leftist-dominated National Advisory Council,” one of them says. C Rangarajan was the chairman of the PM’s Economic Advisory Council and Montek Singh Ahluwalia Deputy Chairman of the Planning Commission. What compounds matters is that NITI’s ‘stern’ directives to ministries have not gone down well with a lot of netas and babus, he adds. To be fair to the new entity, various ministries have been sloppy in furnishing reports about their plans of action for the year ahead and repeated reminders from NITI Aayog have ticked off some top officials and politicians. “It is not our fault that they don’t have any plans,” says a NITI Aayog official. Besides, as a think tank, NITI Aayog has come up with various policies and many of them have been lapped up by the Government. They include plans to make the most of the country’s long coastal lines; modernising agriculture; leasing and land legislation; major recommendations to refurbish the economies of Northeastern states; digital wallets; educational incentives; targets in sports and so on. “The roadmap for various major policies has been submitted by us and the Government is very pleased with the work,” says the official. “When it came to genetically modified crops, we should have stated that it was up to the farmers to decide on adopting new agricultural practices or not. That would have settled the matter,” says this official about the controversy that was generated over encouraging GM crops. NITI Aayog had recommended the use of GM seeds made by an Indian company. A Reuters report quoted a NITI note to the Government saying, “There is some concern that GM seeds can be monopolised by multinationals, which may then exploit farmers… But this concern is readily addressed by limiting GM seeds to those varieties discovered by our own institution and companies.”

Whatever that is, BMS’s renewed attack on NITI Aayog through its resolution finalised on May 24th underscores the frustration that Sangh affiliates have about a clutch of reform initiatives. Speaking to Open from Kanpur, Saji Narayanan said that the resolution doesn’t name any individual, but blames intellectuals’ “lopsided” in their approach for pushing “defective policy initiatives”. The resolution, he said, questions the rationale of viewing foreign direct investment as the sole criteria for assessing the robustness of our economy. The BMS resolution, according to him, calls for “thoroughly reorganising NITI Aayog” and instead having in its place “people-centric” governance. “Even if the labour laws are being changed, it has to be in line with international guidelines (ILO),” the BMS leader said, emphasising that NITI’s priorities are low on “social goals” and high on “corporate appeasement”. As regards strategic disinvestment, he maintains it is a national shame that “our national wealth is handled injudiciously”.

Historically, BMS had attacked what it called “anti-poor” policies of the Centre. BMS leaders and various others had also attacked AB Vajpayee’s ministers publicly—Yashwant Sinha often bore the brunt of the criticism. Vajpayee himself had come under attack. The late Dattopant Thengadi, RSS ideologue and BMS founder-president, had campaigned vigorously against Vajpayee’s reform moves. Thengadi, according to a report in 1999, had even described Vajpayee as a “petty politician playing into the hands of his policy advisers with doubtful credentials”. Thengadi, who enjoyed tremendous clout within the Sangh, said so at a BMS national convention in Nagpur. According to news agency reports from that year, Thengadi had alleged that Vajpayee was surrounded by “self-serving” advisors who are doing the bidding of vested interests. “National interests should be protected by all, irrespective of party affiliations,” Thengadi had said. Interestingly, both Thengadi and Vajpayee were buddies since their ABVP days.

“They don’t make the likes of Thengadi these days. But then his spirit lives on inside organisations like BMS. Its current leaders may not have the stature that Thengadi had to take on a titan like Vajpayee, but they have leaders who can adapt easily to situations. That explains why they have targeted NITI Aayog. Effectively, they are opposed to anyone who agrees with NITI Aayog,” says an RSS pracharak and former BJP leader.

It is not just a leadership crisis. Multiple odds are stacked against the two-year-old, ambitious venture called NITI Aayog.

Amitabh KantArvind PanagariyaBJPIndian economyNITI AayogPlanning CommissionpolicyRSS