'We should improve the business climate in Mumbai and Delhi, and India’s ranking would immediately shoot up.'
'I will be very surprised if growth is significantly below 6.5 per cent.'
The NITI Aayog, which has replaced the decades-old Planning Commission, promises to be fundamentally different from the earlier body in structure, role and powers. Bibek Debroy (bottom, left), a full-time member of the Aayog, tells Sanjeeb Mukherjee & Indivjal Dhasmana NITI will like to take the planning process to the district level. He says the body’s focus is not improving India’s ranking in ease of doing business but improving the overall climate for citizens, including businesses. Excerpts:
There is a word that the 12th Plan is going to be the last Five-Year Plan in India...
When there is an institutional shift, it is not merely in the name; there is also a change in the way we do things. A perspective planning division in the Commission looked at what might be India’s shape in the next 20-25 years, in terms of, say, ease of doing business, or human development indicators.
Ideally, we would like to take this exercise down to the level of blocks, even villages. But data might be a problem, so we will take the exercise at least to the district level. We (NITI) want to say, this is what we need to do at the district level for taking India to a certain level in the next 20-25 years. Also, right now, I personally feel, and so does the Aayog, that we should not be calculating poverty.
So, do you mean the structured format of the Five-Year Plan is over? Plan documents will need to get clearance from Cabinet, followed by the National Development Council. Chapters were formulated on the basis of discussions and suggestions from the working groups...
No, we will have working groups. But the constitution of working groups does not matter; the purpose for which these are used does. So, if we have a taskforce for agriculture, its purpose is to identify the things that India needs to do in agriculture, and the best ways for doing those.
For example, the Economic Survey 2014-15 has two volumes. Volume-II takes a sector-wise data-backed look of the Indian economy. This was the structure of the traditional Plan document. And, Volume-I gives broad outlines and road map. Our stuff (the new Plan document) will be more like Volume-I in nature, and not Volume-II.
Isn’t this the original idea on which the Planning Commission was conceptualised... before it got into matters like fund allocation and determining poverty numbers?
Yes, the only difference is that back then you did not have local bodies, at least constitutionally.
Suppose you are tracking ease of doing business. You might want to track the number of procedures a company has to go through in government offices for getting clearances. How will that work from the bottom onwards?
Doing business indicators are run by the World Bank. The World Bank comes and conducts perception surveys in Delhi and Mumbai, and that is how India’s doing-business rank emerges. If we as NITI, not as government, were interested in whether the rank was moving up from 150, and were to just target that, what should we logically do? We should improve the business climate in Mumbai and Delhi, and India’s ranking would immediately shoot up.
What happens to the rest of India might not have much impact on the ranking, it seems, going by the logical extension of the World Bank’s views. We are interested in improving business climate, and not only ranking. So, if there are certain laws in a state that we believe are causing problems, not only for businesses but for citizens - NITI’s focus is not business alone - we will examine those laws. Improving the overall climate is important. If we improve that, the ranking will automatically improve.
IMF has projected India’s economy to grow 7.5 per cent in 2015-16, against the Budget assumption of 8.5 per cent. Do you think IMF has rightly assessed India’s economy?
I am still more comfortable with the old gross domestic product (GDP) numbers, in terms of projections, because you need something to be occurring for a certain period of time. In terms of the old series, I would say we should get 6.5 per cent in 2015-16. So far, I can see some pick-up in the road sector.
I can see some in terms of unclogging of investment projects that were in the pipeline. I see some positivity in terms of sentiment - something so elusive and intangible that I am not going to use as argument. I will be very surprised if growth is significantly below 6.5 per cent.
In fact, IMF has given a growth projection for the next five years on the basis of the old GDP definition. It has projected India’s economy to see 6.3 per cent to 6.7 per cent annual growth in the next five years. That is much lower than the average annual GDP expansion clocked in the five years preceding the global economic slowdown of 2008. How do you assess this projection?
I do not think we can get back to double-digit growth rates till the world economy improves. The pre-2008 period was when the world economy was surging. I also think there is plenty of slack within the system domestically. But we can get 8-8.5 per cent growth. This does not mean the increase is going to happen overnight.
It is going to happen incrementally, gradually inching up. But for getting to the 8.5 per cent growth level, there is a long list of reforms to be done. There are some that require change in legislation, and there is very little that can be done through executive decisions. If you say India is going to be stuck in the 6.3-6.8 per cent growth band till these reforms are done, I will have no quarrels with that.
