Rajiv Kumar has been picked as the second Vice-Chairman of the NITI Aayog, the think tank set up by the Narendra Modi government as a substitute for the Planning Commission. An Oxford-educated economist with extensive experience in shaping the contours of public policy — both in and outside the government — Mr. Kumar is likely to take charge of his new role in September, once his predecessor Arvind Panagariya returns to academic pursuits at Columbia University in New York. He now serves as Chancellor of the Pune-based Gokhale Institute of Politics and Economics and a senior fellow at the Centre for Policy Research in Delhi and is also the founding director of Pahle India Foundation, a non-profit think tank in the capital. Reporting directly to the Prime Minister, the think tank’s Chairperson, Mr. Kumar could wield a powerful influence on the management of the economy and the Centre’s policy priorities.
What does he bring to the job?
He is more than familiar with the government’s senior Ministers and top officials, including Cabinet Secretary P.K. Sinha and Additional Principal Secretary in the Prime Minister’s Office P.K. Mishra. His word is taken seriously enough by the government to include him on the selection panel for high-profile jobs such as chiefs of regulatory bodies. But it is not the proximity, but the pragmatic policy advice he could bring to the table that would be critical for a government that has now lost two economists of global repute in the past one year (Raghuram Rajan and Mr. Panagariya). His diverse experience and vast social network within industry and the academia should come in handy. Consider this: apart from being a member of the National Security Advisory Board, he has worked at the Asian Development Bank and industry chambers CII and FICCI, and was once the CEO of the economic think tank ICRIER.
Why him?
Having met Mr. Modi first when he was Chief Minister of Gujarat six years ago, Mr. Kumar is in sync with what he calls the Prime Minister’s impressive and ‘sharp focus’ on economic development. “I was an optimist in government, but didn’t let that cloud my judgement,” Mr. Panagariya said after announcing his exit. Mr. Kumar is not only optimistic, but probably has the gumption to speak out on issues that others in the government may shy away from. Take his advice to government spokespersons, for instance — stop claiming economic victory on being the fastest growing economy and talk about efforts to expand employment instead. “Irrespective of the veracity of statistical claims…the truth is that production and employment in major sectors are either declining or stagnating. Rural distress is mounting… Such talk projects an image of a government not empathetic or aware of people’s real concerns. This can rebound badly,” he wrote in Modi and his Challenges released last year.
What could be his agenda?
Spurring the formal economy, reviving private investment and creating jobs is likely to be the mantra of Mr. Kumar, who feels all other economic priorities must make way for employment creation. Jobs are critical for Mr. Modi’s politics to meet the “exploding aspirations of his young supporters and prevent them from spilling out on to the streets in support of extremists of all shades.”
Mr. Kumar believes higher employment will automatically take the Indian economy close to double digit growth rates for the next decade. He also has strong views about India’s foreign trade policy and could push for an overhaul of the export incentives system.
Any surprises?
Bureaucrats may need to come up with better excuses, but Mr. Kumar could bring some relief for citizens as he believes the government could pare the high taxes on petroleum products to push consumption and investment demand. Last but not in the least interesting, Mr. Kumar is a firm backer for a voluntary two-year social service scheme for the youth to ensure unemployment doesn’t lead them astray. “This would have to be managed by our armed forces, as was the case with the National Cadet Corps, and have national integration as the principal objectives. The actual deployment can also contribute to building some assets in the rural sector and address rising rural distress by taking up agricultural extension work.” Wait for it.
Vikas Dhoot
