Planning Commission Replacement Must be 'Lean and Thin': Economist
New York: A replacement for the Planning Commission must be "lean and thin", a top Indian-American economist has said, even as he listed fiscal consolidation, and trade and FDI liberalisation, as key areas the government should focus on to return to high growth.
Arvind Panagariya, Professor of Economics at Columbia University, termed as "brave" the decision by Prime Minister Narendra Modi to do away with the 1950-dated institution and said the body that takes its place should start "anew".
Addressing a gathering at the Chazen Institute of International Business here, he suggested that Mr Modi should put in "as lean and thin a team" for the planning body's replacement with 10-12 people and "lots of resources so that they can draw on the experts as necessary" and then periodically that team should meet with the Prime Minister and Finance Minister.
He further said the new body should have "in the background enough research agenda (on) how to design the reforms taking into the account the political economics".
Mr Panagariya, however, cautioned that the replacement of the Planning Commission should start "anew" as reforming the existing one would ultimately have the "same players" and that "needs to get changed".
Discussing the policy package that India should put in place to revive growth, he said a "reform menu" for
the country should include fiscal consolidation, trade and foreign investment liberalisation, amendment in the Land Acquisition Act, labour market reforms, privatisation and decentralisation of higher education.
He said while fiscal consolidation is underway, some movement has also happened in foreign investment under the new government which has opened the defence sector up to 49 per cent and insurance from 26 per cent to 49 per cent.
He, however, said that in his view, the government could have opened the insurance sector even more for foreign investment. Mr Panagariya also pointed out that there is need to reform the labour market as many of the labour laws are "incredibly constraining".
Making a strong case for amending the Land Acquisition Act, the economist said the act is "incredibly draconian".
"If everything under the current law goes smoothly, (there are) no challenges by NGOs, courts, it will still take five years (to acquire land). Nobody will dare initiate land acquisition under those circumstances."
He listed infrastructure development and privatisation as key areas that require immediate government attention.
On higher education, he expressed pessimism and said the sector seems to be going in the wrong direction.
"Indian system is highly centralised. What India needs is decentralisation" in the education sector, he added.
Mr Panagariya further said while these are the set of reforms that need to be done, there are issues that can go wrong and "implementation" is the key problem.
While Gujarat as a state succeeded by improving governance and controlling corruption, "at the Centre, we need policy changes", the economist added.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
