(Bloomberg) -- Arvind Panagariya, vice chairman of the government's key policy planning body and a senior economic adviser to Prime Minister Narendra Modi, has resigned -- a development that could hurt the government's plan to boost growth in Asia's third-largest economy.
A Columbia University professor, Panagariya, 64, was the first vice chief of the policy body known as NITI Aayog. He was appointed after Modi dismantled the Planning Commission that used to set five year growth roadmaps. He will resume teaching duties by September.
“I have asked the prime minister to relieve me,” Panagariya told reporters in New Delhi.
The departure of Modi's key economic aide is a setback to improving ease of doing business as Panagariya was spearheading efforts to reduce government's role in various businesses. He was an early proponent of privatizing the debt-laden Air India which has been put on the block by the Modi administration as well as guiding strategic sales -- selling at least 26 percent stake -- of state firms.
No Easy Ride
It was no smooth sailing though. Panagariya had run into opposition from right-wing labor unions, part of the Rashtriya Swayamsevak Sangh, the ideological parent of Modi's ruling Bharatiya Janata Party. They accused him of implementing anti-labor policies and asked Modi to totally reorganize the NITI Aayog.
“It was evident that there was nothing bigger for Panagariya in the Indian government -- no ministership -- that would be worth giving up his tenure as professor, which he would have lost had he stayed on for more than two years,” said Mohan Guruswamy, chairman of New Delhi-based Centre For Policy Alternatives. “And not many of the NITI Aayog's ideas have been accepted by the government.”
The NITI Aayog, or the National Institution for Transforming India, is also advising Modi on boosting corporate spending crucial to filling a $1.5-trillion investment gap, creating jobs and on ways to keep his promise to double farm incomes. It released a three-year strategic plan earlier this year to boost “high-productivity, high-wage jobs.”
To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net, Archana Chaudhary in New Delhi at achaudhary2@bloomberg.net.
To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Unni Krishnan, Ruth Pollard
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