Arvind Panagariya at NITI Aayog helm

Arvind Panagariya at NITI Aayog helm

Arvind Panagariya at NITI Aayog helm

Indian-American economist Arvind Panagariya, who often questioned the need for Planning Commission in a free-market economy, will be the vice-chairman of the newly created NITI Aayog (Policy Commission).

Handpicked by Prime Minister Narendra Modi, 62-year-old Panagariya is an expert in international trade.

The previous body, the Planning Commission, had a deputy chairman at the helm.
A professor of Economics at Columbia University, Panagariya had recently triggered a debate by reiterating the need to rethink the need for Planning Commission. “I think planning has become our habit. We should break that habit. We are in a market economy. It has to be planned but not by the Planning Commission but by the ministries,” he said when he was in India last year.

Panagariya has earlier served at the Asian Development Bank as chief economist and at Center for International Economics, University of Maryland, as professor of economics and co-director. Headed by the prime minister, the Aayog will have economist Bibek Debroy and former DRDO chief V K Saraswat as full time members.

Union ministers Arun Jaitley, Rajnath Singh, Radha Mohan Singh and Suresh Prabhu have been appointed ex-officio members of the Aayog while Nitin Gadkari, Smriti Irani and Thawar Chand Gehlot have been accorded special-invitee status.

The NITI Aayog which has been created as a “think-tank” to provide technical and strategic advice to the government at the Centre and states, replaces 65-year old Planning Commission which was known for its old-styled centralised planning.

In contrast, the Aayog will develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government. It will ensure special attention to the sections of society that may be at risk of not benefitting adequately from economic progress, according to the prime minister’s office.

Modi has indicated that he desires a bottom-up approach to planning where plans made at the village and block levels contribute to the formulation of bigger plans at higher level. Panagariya had recently said that India needed to restore space to markets but that there was still a need for growth in social spending in a country that has about a third of the world’s extremely poor.

“The NITI Aayog will seek to put an end to slow and tardy implementation of policy by fostering better inter-ministry coordination and better Centre-state coordination. It will help evolve a shared vision of national development priorities and foster cooperative federalism, recognising that strong states make a strong nation,” the government had said last week.