Policy pangs set backdrop to Budget 2024
Image credit X @NITIAayog
NITI Aayog shines with policy waywardness
By Manish Anand
New Delhi, July 13: In an assertion of ‘business as usual’ swag of Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government, Union Minister for Finance Nirmala Sitharaman will present sixth full Budget in a row on July 23. She has an immediate task on hands to work out financial packages for Bihar and Andhra Pradesh.
As a part of an annual ritual, Modi listened to ideas offered by economists at a meeting held by the NITI Aayog this week. That was followed by a report by Reuters, a news agency, claiming that privatization is no more on the agenda of the government.
The NITI Aayog was the script writer of an aggressive selloff plan of the Public Sector Undertakings (PSUs). Having got a relief after getting one monkey off the back with the privatization of Air India, the Modi-led government had already forgotten the plan to privatize a select few PSUs.
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This amounts to a reversal of Sitharaman’s Budget speech in the past wherein she had laid the policy blueprint of the government with the mantra that the government will stay only in a few strategic sectors.
With privatization reportedly off the agenda, the NITI Aayog, the policy think tank, is faced with irrelevance. “The least that we talk about the NITI Aayog, it will be better,” said Amit Bhaduri, an acclaimed economist.
The greatest disservice done to the nation by the NITI Aayog is discontinuing with the “time-series” of data, added Bhaduri. “Now, you can say anything, including that 25-crore people have been lifted out of poverty,” said Bhaduri at a round-table discussion on Indian economy at the India International centre last week.
The Reserve Bank of India (RBI) claimed that the employment growth grew by six per cent in the last financial year against 3.2 per cent previously. Within days, a Gujarat viral video showed scores of youths precariously jostling to sneak into a walk-in-interview, while a few of them fell off the balcony.
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In the latter parts of the first term, the Modi-led government had sent out a message that the Centre will incentivize states for carrying out reforms. Andhra Pradesh, Bihar, Punjab, Kerala, and West Bengal – as per an RBI Report – rank among states which paid least attention to fiscal prudence.
In the backdrop of demands for special packages by Andhra Pradesh and Bihar, economists Amitabh Kundu and Govind Bhattacharjee in their joint article in The Indian Express flagged the deepening flaw in manner in which 15th Finance Commission formula of dividing devolved taxes is being shared with states.
“The eight Northeastern states and two hilly states (Himachal Pradesh and Uttarakhand), which accounted for only 5.2 per cent of the population, were assigned 10.5 per cent share of the devolved taxes, resulting in lower shares for the southern and the western states,” they argued.
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The adrift policy making of the government is further accentuated by the missing promised 100-day agenda. The NITI Aayog had also authored a few of the action plans which have now been forgotten.
“The basic flaw in policy planning is lack of understanding that India is a consumption economy. The Make in India plan will not work until there is rise in incomes of the people. The right prescription will be land reform and boost value additions in agriculture,” said Bhaduri.
The NITI Aayog was tasked with the job to encourage states for land and agrarian reforms. On both the counts, the NITI Aayog has monumental failures.
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