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5-Yr Plans Not Possible in Market Economy: Arvind Panagariya-G

- NITI Aayog has right sized its staff from over 1,250 inherited from the Planning Commission to around 500. It still needs to recruit new outside talent to strengthen its think tank functions. - It has divided staff into two hubs - one for knowledge and innovation, and one as a team India link between states and central ministries. - Five-year plans are no longer relevant in today's market economy where entrepreneurs and consumers determine investment and production decisions, not central planning.

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47 views3 pages

5-Yr Plans Not Possible in Market Economy: Arvind Panagariya-G

- NITI Aayog has right sized its staff from over 1,250 inherited from the Planning Commission to around 500. It still needs to recruit new outside talent to strengthen its think tank functions. - It has divided staff into two hubs - one for knowledge and innovation, and one as a team India link between states and central ministries. - Five-year plans are no longer relevant in today's market economy where entrepreneurs and consumers determine investment and production decisions, not central planning.

Uploaded by

honey30389
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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5-yr plans not possible in Market Economy: arvind PanagariyaG

Table of Contents
5-yr plans not possible in Market Economy: arvind Panagariya-G........................... 1
S-3........................................................................................................................... 1

On the organisational front, we had inherited about 1,250 positions from the
erstwhile Planning Commission. We have now right sized it to about 500 ..............1
need to induct new, outside talent to strengthen our think tank function. ..............1
We have divided the staff of the institution in to two large hubs. One is called the
Knowledge and Innovation hub and the other the Team India hub. The former has
the responsibility to create, accumulate and disseminate knowledge, while the
latter serves as the link between states and ministries at the Centre. The
Knowledge and Innovation hub will have 12-14 verticals and they would develop
expertise in different sectors such as trade and macro, health, agriculture, rural
development, education and skill development. ..................................................... 1
Do you think five-year plans are relevant today?.................................................... 1

we have now moved to a market economy and in a market economy it is not


possible to plan the way we have been doing in the five-year plans. .....................1

Are we still using tools and approaches which were designed for a different
era?......................................................................................................................... 1

As long as there was investment and import licensing and distribution and
prices were also partially controlled, you could plan for both public and private
sectors. You had the means to determine the allocation of investment, imports
and final commodities across sectors and economic agents................................... 1

.But now entrepreneurs and consumers are empowered to make these


decisions................................................................................................................. 2
Some states complain that there is no entity that they can approach to resolve
their problems with the Centre after the abolition of the Planning Commission? ....2
It is true that the NITI Aayog does not distribute money among states the way the
Planning Commission did. But in terms of representation of interests of the states
to the central government, the complaint is plain wrong.Not only do states come
to us when they face issues with central ministries, in a departure from the
general practice under the Planning Commission, we have pro-actively gone to
the states to consult with them............................................................................... 2
reports stating that public invest ment and urban demand are now on more solid
ground..................................................................................................................... 2

S-3
Is NITI Aayog's separation from the erstwhile Planning
Commission complete?

need to take forward initiatives introduced in 2015 and launch


new ones in the coming year.

On the organisational front, we had inherited about 1,250


positions from the erstwhile Planning Commission. We
have now right sized it to about 500 and reallocated the
extra employees to other parts of the government. But, we still

need to induct new, outside talent to strengthen our think tank


function.
We have divided the staff of the institution in to two large
hubs. One is called the Knowledge and Innovation hub and the
other the Team India hub. The former has the responsibility to
create, accumulate and disseminate knowledge, while the
latter serves as the link between states and ministries at the
Centre. The Knowledge and Innovation hub will have 12-14
verticals and they would develop expertise in different sectors
such as trade and macro, health, agriculture, rural
development, education and skill development.
Do you think five-year plans are relevant today?

we have now moved to a market economy and in a market


economy it is not possible to plan the way we have been
doing in the five-year plans. This was recognized even by the
former Prime Minister Manmohan Singh who, in his parting
speech to the Planning Commission, had said,

Are we still using tools and approaches which were


designed for a different era? Have we added new functions

and layers without any restructuring of the more traditional


activities in the Commission?

As long as there was investment and import licensing and


distribution and prices were also partially controlled, you
could plan for both public and private sectors. You had
the means to determine the allocation of investment,
imports and final commodities across sectors and
economic agents. For example, we could plan how many
scooters and cars would be produced, who would get them and
at what price

.But now entrepreneurs and consumers are empowered to


make these decisions. You can no longer plan even the total
quantity of investment let alone its allocation across various
sectors.

Some states complain that there is no entity that they can


approach to resolve their problems with the Centre after the
abolition of the Planning Commission?
It is true that the NITI Aayog does not distribute money among
states the way the Planning Commission did. But in terms of
representation of interests of the states to the central
government, the complaint is plain wrong.Not only do states
come to us when they face issues with central ministries, in a
departure from the general practice under the Planning
Commission, we have pro-actively gone to the states to consult
with them.
reports stating that public invest ment and urban demand are
now on more solid ground.

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