"NITI Aayog fails to give proper direction to the economy through India Action Agenda" : Agarwals

The agenda has been widely appreciated in media, by economists and others. However, the NITI Aayog has failed to give out of the box solutions. Most of the actions suggested are opinion based rather than on logical derivation considering the targets.
 
 
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NOIDA, India - Oct. 21, 2017 - PRLog -- The agenda for India set by the highest and most powerful think tank of the country suffers from several weaknesses opined Prof. J.D. Agarwal and Prof. Aman Agarwal, Economists and Professors of Finance, Indian Institute of Finance in a comprehensive article published in the latest issue of Finance India, Vol. 31 No. 3, September, 2017 issue released recently.

The agenda does not identify goals and also constraints. Leaving long term vision to be done at the IInd and IIIrd stage is not justified. Vision and goals in the short run i.e. for the next three years has to be defined first, priorities assigned and constraints to be taken care of.

NITI Aayog has also not included in its agenda, the possible implications and estimates of GST, the most important indirect tax reforms of independent India. Its estimates and effects on revenues of central government, State Governments for the next three years and the actions required to tune GST opined Agarwals. GST is likely to have positive effects on the life of people, trade, industry, inflation despite temporary disruptions and problems faced by traders.

According to Agarwals, any Action Agenda either for a country or for a firm or even for an individual has to be in quantified form setting up achievable goals through systematic and logical goal setting and assigning priorities and financial and resource implications. UN millennium goals could have been a good index for determining the agenda in the quantified form.  NITI Aayog Agenda  has been prepared taking into consideration very well informed opinion of various experts from different fields. Research findings of various specialized Institutions or universities on which government of India has spent crores, could have been of  great help.

NITI Aayog should have identified goals set with the requisite financial implications and government and non-governmental efforts. Traditional view held since independence that the government is the sole authority to achieve growth and development and marginalizing peoples' role and participation in the process has to have new look.  There has to be clear departure from the incremental approach of the past. It should be more towards stimulus than adjustment. Government should act as facilitator than provider or obstructionist.

Various parameters based on the PM's vision and the emergent needs of the economy should have been identified opined Agarwals. Some of the parameters could have been macroeconomic  aspects of dynamic and growing India. The present status and the targets of various parameters should have been stated on the very first page of the Agenda. Some of these could be  Growth rate; fiscal deficit; revenue deficit; increase in the  income of farmers and other marginalized people of the country; Tax GDP ratio; reduction in  unemployment rate; increase in the Growth of various sectors, elimination of diseases, reduction in mortality of children, women and India's sovereign rating and all those parameters taken into consideration by successive finance commissions from time to time.

The NITI Aayog has ignored completely banking and financial sector and reforms needed urgently. Government's efforts to have as many as 30 crore bank accounts under Jan Dhan Yojana opened in the last 3 years as part of financial inclusion is admirable. However, Banking reforms to strengthen banking free from NPAs and tuning to the need of capital adequacy ratios as per BASEL III norms are urgently needed. Prime Minister Modi's call for  cashless economy or less cash economy lays greater focus on increasing role of banking, insurance and financial sector in India.

NITI Aayog has very well identified the priorities to education, health, agriculture, rural development, defense, railways, roads and other categories of capital expenditure but should have given ordinal or  cardinal ranking to these priorities so that meaningful results are achieved but all of these cannot and should not have equal priorities. NITI Ayog has given very useful suggestions for the agriculture and the rural economy. Most of these as part of Action Agenda are being implemented for a long time but could not give desired results. It can be validly expected that an out of the box innovative proposal should have been made to achieve the mission of the Prime Minister  to double the incomes of the farmers. Heavy doses of  capital investment and Extensive agriculture reports needed in the agriculture sector opines Agarwals. Banks are shy of financing tools, equipments, technology, seeds, fertilizers, etc. in the agriculture sector as the small and fragmented farmers do not have any reach to senior bank executives and the ways and means industry adopts.

According to Agarwals, it is surprising that NITI Aayog has shown satisfaction to the unemployment rate of 5% and 8 % and shown a concern for under employment. Its proposal as Action Agenda is far from being practical. Unemployment in India and also in the rest of the world  is a matter of serious concern. It requires to be handled innovatively. NITI Aayog also silenced about the financing of these projects while Financing part cannot be ignored and the effects of harnessing Energy and its uses, having direct effect on development.  NITI Aayog has very well identified  various aspects to bring about reforms in Civil services. However, it has not touched the sensitive area of lack of accountability and corruption. According to Agarwals, people deserve delivery of service. There is a need for Citizen Charter.

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