Innovations and ‘Best practices’ are considered to be the life line for effective delivery of public service in any country. Innovative trends in government and administrative practices offers tremendous opportunity for good governance in India. For a better public administrative mechanism, it is important to have innovations in public institutions. Public administration also has to adapt to new market oriented approaches for the delivery of public services. It has to minimize bureaucratic delays and reduce the administrative burden, thereby enhancing public satisfaction and increasing efficiency and effectiveness of public administration. Innovations in public administration emphasizes on the role of public managers in providing high quality services that citizens value and advocates increasing managerial autonomy, particularly, by reducing central agency controls. Under this context, this article looks at the restructuring of the Planning Commission in India and re-christening it as NITI (National Institution for Transforming India) Aayog, particularly under the milieu of political economy of reform and innovations in public administration. However, any discussion on the reform process in Indian state must attend to the broader process of economic change that has been underway for decades now and which provides a background to the current phase of economic liberalization and market-based reforms that began in 1991.
Development Strategy Model in India: Crisis and Contradictions
India started with the development strategy of economic planning which envisaged for an interventionist state based on socio-economic realities of Indian politics. The national development which followed subsequently was based on complex interaction between the economic and political strategies, many of them had inherent contradictions. These were reflected, according to Francis Frankel, in the “paradox of accommodative politics and radical social change”. Another significant contradiction was visible in the Nehruvian model of development based on the conflicting ideologies of capitalism on the one hand and communism on the other. The developmental model that was pursued from then on, under a ‘democratic pattern of socialism’, came to be known as a new model for Asian and African development. On the one hand, it stood for socialistic principles of state ownership, regulation and control, on the other hand, it envisaged for liberal economic policies and incentives to private investment. At this critical juncture, in contrast to many liberals and socialists, Gandhian intellectuals advocated for a decentralized, egalitarian and cooperative order which was in contradiction to the goal of Parliamentary democracy in India. Furthermore, the dual goal of ‘economic growth’ and ‘social justice’ were also irreconcilable within the existing framework of accommodative politics. Another major contradiction was visible in reconciling the ideals of ‘political democracy’ with ‘socio-economic inequalities’. Over the years, there has been contradiction between the development strategy of ‘planning’ and the ‘market oriented’ economic framework in recent times.
Reforms and Structural Change
The national leadership’s inability to carry out radical social change through peaceful and parliamentary means led India into an economic and political impasse that prevented progress towards the goals of growth and social justice. The attempt to achieve both economic development and reduction of disparities, in the absence of basic institutional changes resulted in the worst of both worlds—achieving neither growth, nor redistribution. The socio-economic realities of Indian society which legitimized for an interventionist role of the state in the initial years after independence, has witnessed a complete transformation to a market-based regulatory state.
State led industrialization unleashed in the 1950s witnessed a ‘U’ turn in its strategy of development in the post 1990s. From a ‘nanny state’, it has been transformed into a ‘facilitator’ of goods and services. As a result of the forces of market led growth under the impact of liberalization, citizens have been transformed into consumers gaining from the process of reform and good governance. They have been given options to choose between appropriate providers at minimum cost. The result has been an accelerating pace of de-regulation and privatization, reversing the previous trend of the expansion of the public sector.
Structurally, the change has been from the rigid, hierarchical and bureaucratic form of public administration to a flexible market based form of public management. The change was not merely in the form and style. There has been a remarkable change in the role of government in the society with its focus on efficiency, consumerism and competition. This transformation in the role of the state has been theorized by Osborne and Gaebler in their path breaking publication titled, “Reinventing Government” in 1993. Its publication immediately caught the attention of anti- bureaucracy campaigners, and the publication was accorded a warm welcome, heralding the birth of a new form of public management. This new model of public management, also known as ‘Entrepreneurial Government’ envisaged for promoting competition between diverse providers of goods and services.
It is in this context that the establishment of National Institution for Transforming India (NITI) Aayog replacing the decades-old Planning Commission becomes significant. NITI Aayog is envisaged to emerge as a “think-tank” that will provide Governments at the central and state levels with relevant strategic and technical advice across the spectrum of key elements of policy. There have been wide-ranging discussions on the role and function of the new institution to replace the Planning Commission ever since the Prime Minister Narender Modi mentioned about it in his Independence Day address on 15th August 2014. Promoting cooperative federalism and giving States greater freedom in designing their development plans are two of the key objectives behind the setting up of the NITI Aayog. It is further expected to focus on quick resolution of inter-departmental and Centre-State issues to speed up the pace of implementation of infrastructure projects. It seeks to provide a critical direction and strategic input into the development process. The NITI Aayog also aims at putting an end to slow and delayed implementation of policy, by fostering better Inter-Ministry coordination and better Centre-State coordination.
The NITI Aayog will create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and partners. It will offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda. In addition, the NITI Aayog will monitor and evaluate the implementation of programmes, and focus on technology upgradation and capacity building. Prime Minister Narender Modi has noted that one of the objectives of NITI Aayog is to establish a dynamic institutional mechanism where eminent individuals outside the Government system could contribute to policy making.
The NITI Aayog is not expected to undertake the five-year Plan process, and has removed allocation of Plan funds from its domain. Unlike the Planning Commission, the new body does not have the power to allocate funds to states or to recommend plan budgets to the finance ministry. Yet, it still handles the infrastructure division that was set up at the Planning Commission to monitor the performance of infrastructural projects.
NITI Aayog aims to accomplish the following objectives and opportunities:
– An administration paradigm in which the Government is an “enabler” rather than a “provider of first and last resort.”
– Progress from “food security” to focus on a mix of agricultural production, as well as actual returns that farmers get from their produce.
– Ensure that India is an active player in the debates and deliberations on the global commons.
– Ensure that the economically vibrant middle-class remains engaged, and its potential is fully realized.
– Leverage India’s pool of entrepreneurial, scientific and intellectual human capital.
– Incorporate the significant geo-economic and geo-political strength of the Non-Resident Indian Community.
– Use urbanization as an opportunity to create a wholesome and secure habitat through the use of modern technology.
– Use technology to reduce opacity and potential for misadventures in governance.
The NITI Aayog aims to enable India to better face complex challenges, through the following:
– Leveraging of India’s demographic dividend, and realization of the potential of youth, men and women, through education, skill development, elimination of gender bias, and employment.
– Elimination of poverty, and the chance for every Indian to live a life of dignity and self-respect.
– Reddressal of inequalities based on gender bias, caste and economic disparities.
– Integrate villages institutionally into the development process.
– Policy support to more than 50 million small businesses, which are a major source of employment creation.
– Safeguarding of our environmental and ecological assets.
Caveats and the Road Ahead
Innovations in public institutions call for bridging the gap between the citizen’s expectations and delivery of public services. Deliberations are being carried out by NITI Aayog on how to make the implementation of Centrally Sponsored Schemes more effective. As a departure from the erstwhile policy of ‘mapping poverty’, the new body would look at other social indicators prepared by Socio-Economic Caste Census to assess the impact of social schemes on the poor. Capacity building and enabling communities will go a long run in effective implementation of these policies in the future.
It also faces the challenge of bridging the digital divide between the haves and the have nots. Digitalisation and e-governance provides a direct ‘interface’ between citizens on the one hand and administration on the other. It aims at achieving citizen centric ‘responsive’ government and adds ‘transparency’ to the administrative procedures. It will be critical in building up of a robust and efficient knowledge network for innovation and strategic thinking.
The new institution is faced with the dilemma of providing a harmonious blend between the demands of ‘economic liberalization’ and ‘governmental regulation’ amidst a vibrant private sector emerging and posing a threat to the monopolizing tendency of the ‘Leviathan’. Grass root planning and harmonizing it with the state level and national planning is also going to be a daunting task. How to disseminate knowledge and convert it into successful practices would be a formidable task before the new institution.
So far as evaluating the proposed function of NITI Aayog, its role in disbursement of funds has been subject to criticism. There are three main channels through which funds get devolved from Centre to the State—through the finance Commission; planning Commission; and discretionary transfers. The elemination of the Planning Commission would mean that planned transfers would now be fated out through the finance ministry. This would entail both a definite reduction in the total magnitude of transfers and a possible increase in the Centre’s control over State’s plan.
NITI Aayog has been accused of leading towards greater centralization of power because of the abolition of National Development Council (NDC) and its replacement by Regional Councils. These Regional Councils are likely to be a purely formal political body concerned with ‘political alliances’ rather than ‘planning’ on the basis of developmental issues. These regional consultations replacing NDC meetings are more likely to be political occasions where the states would be at the mercy of the Centre.
According to Prabhat Patnaik, “the transition from the Planning Commission to the NITI Aayog reflects the completion of the transition from a state professing anti-imperialism to a neo-liberal state”. Nevertheless, success of NITI Aayog in transforming India will depend upon its nature and effective functioning, power and position of those in the authority and the quality of the people who will lead the institution forward.
(Sonu Trivedi teaches at Delhi University)