On 21 April, the Union government, under the imprimatur of NITI Aayog, released a blueprint of sorts for the Indian economy to achieve a gross domestic product (GDP) of $10 trillion by the year 2032. This document, Creating a movement for change—it is a PowerPoint deck of 24 slides, not a full-fledged report—has been sharply criticized.
Some questioned the choice of terminal date—2032—which would happen to be the centenary of the former prime minister, Manmohan Singh. But, it is highly doubtful if this was the motivation for the choice of date! More seriously, most criticisms centered on the $10 trillion target and on how the government expected to go about achieving it.
An editorial in this newspaper (The long road to a $10 trillion economy, 25 April) pointed to the absence of the articulation of a “strategic path” to achieve the $10 trillion goal. It also pointed to the fact that the goal of a $10 trillion GDP hinges both on the nominal growth rate of the economy, in rupees, as well as the nominal dollar-rupee exchange rate.
Another way of making the same point is to question whether the target is envisaged in nominal or real (that is, inflation-adjusted terms), as argued by Ashok Bhattacharya in Business Standard. If the former, the target will be easily achieved, projecting recent trends forward; if the latter, it may be a tall order indeed.
Meanwhile, rounding out a trifecta of criticisms, my IDFC Institute colleague, Shankkar Aiyar, writing in The NewIndian Express, drew attention to the “big gorillas” that may bedevil the political economy of achieving the target, in particular, state capacity at the centre and the states, broadly construed.
With all due respect to these valid criticisms, they perhaps misfire altogether. The document in question is not a “vision” statement, nor is it an economic policy plan that an economist would produce. It is noteworthy, but oddly scarcely remarked upon, that the document was presented to Prime Minister Narendra Modi, not by the vice-chairperson of NITI Aayog, economist Arvind Panagariya, but by its chief executive officer, Amitabh Kant, a distinguished IAS officer who completed his tenure as secretary in the department of industrial policy and promotion before joining the NITI Aayog.
This fact points to the genesis of the report: that the prime minister tasked all of the secretaries to the Union government to produce a series of practical, actionable recommendations which would serve to improve the bureaucratic functioning of government.
The secretaries were then divided into groups of eight, each of which had a nodal individual. Finally, it fell to Kant, as CEO of NITI Aayog and thereby holding secretary rank, to pull together all of these disparate elements into a concise PowerPoint deck which could then be succinctly presented to the prime minister in eight or 10 minutes.
In other words, Kant’s involvement was that of primus inter pares among the groups of secretaries, rather than, strictly, as NITI CEO, which technically is a post-retirement position for him. Significantly, the presentation and associated document were presented and released on Civil Service Day, 21 April.
Knowing this background, it is, therefore, self-evident that the document is not, strictly, a NITI Aayog document, even though it was presented by the NITI CEO; even less is it an economic report of a type which would bear comparison to the Economic Survey, which is produced in advance of the Union budget by the chief economic adviser, at present Arvind Subramanian. Such comparisons, therefore, miss the point of the document altogether, which is better understood as a manual of sorts for the upper echelons of the bureaucracy to improve the functioning of the machinery of government.
Judged on its own terms, therefore, Creating a movement for change does a credible job of achieving what was intended, which is to galvanize the bureaucracy into making the government function better—which, indeed, has always been central to Modi’s mantra of governance, starting from his days as chief minister of Gujarat and continuing under his tenure as prime minister.
Having said this, it is a perfectly valid criticism that the actual purpose of the report has not been well explained by the government, so much so that even the leading lights of the business media are measuring it against a benchmark which was altogether unintended.
The unfortunate consequence may be that NITI Aayog gets a bum rap, which is entirely undeserved. Despite much criticism in the media, some of it poorly informed, NITI Aayog represents a significant departure from the now deservedly rubbished Planning Commission. Freed from the responsibility to dole out monies, NITI Aayog is attempting valiantly and with no little success to function simultaneously as a think tank for the government, and a friend and partner within the Union for all of the states.
It is, therefore, incumbent on those around the prime minister to better explain the mandate and intended use ofCreating a movement for change. Else, it may paradoxically retard the very process it is intended to enable.
Disclosure: The author is co-lead researcher on an “ease of doing business” survey being produced by NITI Aayog in partnership with IDFC Institute. He, however, had no involvement with the document which is the subject of this column.
