As the year begins, so does one of the Prime Minister’s pet projects. The NITI Aayog — inaugurated January 1, 2015 — will replace India’s Planning Commission, a major change for both the country and Delhi’s revered Yojana Bhavan. The new animal is lean, mean and to those holding its leashes, fighting fit. NITI Aayog — short for National Institution for Transforming India — is a think tank for the Centre and the states.
Its primary leadership though, is more interesting. Prime Minister Modi has appointed Indian-American economist Arvind Panagariya as the body’s first vice-chairman. He is essentially then, the skipper taking this boat out into the waters, for the very first time — the job is downright tough.
But the 62-year-old has an extremely long list of achievements. He’s a professor of economics at New York’s Columbia University, has been a former chief economist at the Asian Development Bank and has spent time with all the three — the IMF, WTO and the World Bank.
He’s also doesn’t really like the Amartya Sen’s brand of economics and hates handouts. In Panagariya’s India, there will be no crying for state-backed welfare measures and certainly no weeping if you’re fired by your private-sector employer. Sample this opinion he offered in an article for Foreign Affairs.
“Labour laws relating to industrial disputes, trade unions, pensions, provident fund, and insurance have been the major obstacles to the entry of large formal-sector firms into low-skilled labour-intensive industries (for example, the textile industry). Their effect has been reinforced by the absence of proper bankruptcy laws that would allow firms to close rapidly in case of failure. In some case, firms with 100 or more workers are not permitted to make layoffs. So, go slow on pension, PF and insurance, and allow companies to shut without indemnity whenever they want.”
Panagariya’s focus on efficiency is so sharp that he’s planning to take a hacksaw to India’s “lifeline for the poor” — the public distribution system. Why? Because it’s not encouraging systemic efficiency and has become an archaic bulk that’s swallowing money meant for the poor.
Perhaps, this visceral need for efficiency comes from his upbringing. Panagariya’s father, Balu Lal Panagriya started fighting poverty early in life. He has spoken of his childhood in Jaipur in an interview to Rediff, shortly after his Padma Bhushan honour in 2012. “My father was an honest government official and always stressed on the importance of integrity. He was a self-made man and what I have learned from his life has shaped me considerably. When he decided to build a house, he did it on the outskirts of Jaipur as he could not afford land in the city.”
School too, was kilometres away. Arvind, the youngest of three brothers, struggled to reach whatever education was nearby and over the years, became good enough for father Balu Lal to suggest he take the IAS exam. However, the young Arvind chose to break out and sent out forms to Princeton, Chicago and Cornell — all three accepted him. It was 1974. His elder brother urged his father to let Arvind go, and Balu Lal, agreed. The three wrangled up a ticket and that day marked the start of a stellar career in economics.
He went on to write over a dozen books including Why Growth Matters (described as a manifesto for policymakers and analysts). He has a PhD from Princeton, currently teaches at Columbia and despite all that work, is still a phone call away for his students any time of day.
Close friend and frequent collaborator Professor Jagdish Bhagwati, described Panagariya’s style of working. “You may say people like Arvind and me are old-fashioned. In the academic world, well-known professors are so busy with everything else but teaching. Students find it difficult to reach them. But some of us are different. We take our teaching responsibilities very seriously,” he said.
But Panagariya is now facing his biggest challenge — steering an entire country of a billion people towards better profits. His years of teaching and analysis will no doubt, help. However, more importantly… Panagariya grew up here, in one of its harshest region. He is familiar with its weaknesses and strengths. This is an ocean the skipper has sailed before.
