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Govt wants efficiency and speed, patience not a virtue anymore: Amitabh Kant, CEO, NITI Ayog

Government has moved very aggressively and with great speed, and you will see speedy action happening through DIPAM.

Last Updated: Nov 08, 2016, 12.30 PM IST
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Our objective is to make India a $250-300 billion plus e-commerce market by 2030 from ~$40 billion today, said Amitabh Kant.
Our objective is to make India a $250-300 billion plus e-commerce market by 2030 from ~$40 billion today, said Amitabh Kant.
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India must move from inputs and outputs to outcomes, says NITI Aayog CEO Amitabh Kant. In an interview to the Economic Times, he says the government’s premier think tank is focusing on radical improvement in education, health and nutrition, and that the mandate from Prime Minister Narendra Modi is to push for transformational change in a speedy manner. Edited excerpts:

Does a CEO designation for you signify a corporate orientation for NITI Aayog?
The objective of the government in designating the post as CEO is that NITI Aayog should work as a corporate entity with vision, speed and efficiency. NITI is also a very trim, compact organisation. My belief is that all secretaries to government of India need to work like CEOs to drive change and transformation in India. That’s the only way we’ll make India a very easy and simple place to do business in and that’s the only way radical change in policies will take place.

We have tried to make NITI Aayog as private sector oriented in its decision-making process as feasible and this is obvious from the fact that we have brought in a lot of talent like YPs (Young Professionals), OSDs (officers on special duty) and consultants who are from top research bodies or from the industry. This infuses fresh ideas and facilitates exchange of global best practices. NITI is now a very vibrant organisation.

How has NITI Aayog brought about this change?
Prime Minister himself is driving a very result oriented outcome-based monitoring of all government schemes with clearly defined outcomes, both quarterly and annually, using a sophisticated dashboard. We have made 15 outcome-based presentations across infrastructure, health and education to the PM. We have moved away from input and output to outcomes. This has never before been done in India. NITI is also monitoring implementation of the recommendations of the Group of Secretaries. The eight groups constituted by the Prime Minister had recommended major structural changes and substantial business process re-engineering has taken place since then.

There is a perception that this change in work culture has not filtered down to much of the bureaucracy. Do you see that as a challenge?
You have had a 68-year legacy of rules, regulations, acts, procedures and controls. We had made India a highly complex and difficult place for business. In the last two years we have started dismantling this through a vast number of big structural reforms. The mindset of senior bureaucrats has radically changed, with many of them becoming champions of reforms. It will take some time for change to spread down through the entire layers of bureaucracy. There is a vigorous momentum as the drive for ease and simplicity is coming right from the top. The competition amongst states has also made a huge difference. All states have competed with huge vigour and energy to remove redundant rules and regulations.

Officials in some ministries say the Aayog is pushing too hard and there is risk of policy error. Would you agree?
Speed is of essence. We have already waited for too long. The mandate from the Prime Minister is to push for transformational change in a speedy manner. Government wants efficiency, transparency and speed. Patience is not a virtue anymore.

NITI Aayog is working across sectors. So what kind of reforms can we see in the next one-two years?
We are trying to bring in structural reforms in innovation, which in turn will help us push for reforms in the education system. There was overwhelming response for tinkering labs and Incubation Centres and the Atal Innovation Mission will drive this change. Innovation and restructuring at school level is key.

We are also involved with research and policy-making across sectors and we bring out policy notes periodically. We are working in diverse sectors including agriculture development and e-commerce. For example, the changes we recommended for the construction sector have been approved by the Cabinet and are likely to give a boost to the sector and provide a fillip to job creation. We have worked on making India an arbitration hub. We are focused on transformative actions across sectors.

How does NITI Aayog plan to ensure outcome on the policy on strategic disinvestment?
NITI Aayog was asked to work as a disinvestment commission. Within a record time of 45 days we submitted a report on sick and loss-making CPSEs (central public sector enterprises). Prime Minister’s Office has already reviewed them and action has moved forward on a number of them. This is a big step forward.

The second thing we have done is to look at strategic disinvestment. We have made very specific recommendations in two tranches for 22 PSUs (public sector undertakings) for strategic disinvestment. On this too, let me assure you that the government has moved very aggressively and with great speed, and you will see speedy action happening through DIPAM (Department of Investment and Public Asset Management).

What role is the Aayog playing in opening up the retail sector?
As CEO, NITI Aayog I am chairing an inter-ministerial committee on e-commerce. Our objective is to make India a $250-300 billion plus e-commerce market by 2030 from ~$40 billion today. However, the challenge for us would be to increase the number of digital transactions, and strengthen our warehousing and logistics infrastructure in the country as this would in turn boost e-commerce. The second challenge is to take e-commerce to all nooks and corners of India. All these are issues we are looking at right now.

Reaching out to people after Jan Dhan Yojana has been a challenge. Is it possible to leapfrog to a cashless society instead of trying to improve the existing system?
Currently there are 1.2 million Point of Sale terminals in India. One way is to raise it from the current level to 20 million terminals.

Another big breakthrough is Unified Payment Interface – that has the potential to leapfrog. UPI is the biggest technological breakthrough for India as all transactions can then be done on mobile. India will be the only country with a billion biometrics, UPI and a billion mobile phones. This will radically reduce cost of transaction.

How is the Aayog pushing for such a digital revolution in the country?
There are three potential game changers. These are UPI, spread of Internet and JAM (Jan Dhan Yojana, Aadhaar and mobile connectivity) trinity, all of which can be tapped via increasing smartphone penetration and which is already happening now. The key for India to become a $10 trillion economy by 2030 is to use technology to leapfrog and the only way it can happen is when we take several measures to promote digital payments. At present ~78% transactions are in cash. We need to make India a cashless, paperless society by 2025.

What is the Aayog’s growth projection for this year and why?
With good monsoon we should be heading for 8% growth, but the challenge for us is to ensure that private investment revives in a big way. For that to happen it is important that we start penetrating export markets. We need to vigorously push for exports. Look at Japan, Korea, China – none of them have grown for long periods without exports.

What should India do to improve exports?
India’s share in global trade is a mere ~2%. Wage rates in China are rising at high rates and hence companies in China are looking for alternative destinations. India is a logical destination. Instead of having a trade imbalance of $53 billion with China we should ensure that all the companies that export to India should actually start manufacturing in India. Our aim should be to move from ‘Made in China’ to ‘Invested by China, Made in India’.

NITI Aayog does not have the mandate to distribute funds to states. So how is it pushing states for execution?
We have done immense amount of work to prepare Performance Indices for States on learning outcomes (education), health outcomes and water management. We are extending this to areas like agriculture. In all these areas, states will be ranked on performance during the course of the year. We will put their performance in public domain exactly as we have done for the Ease of Doing Business rankings. We will challenge the states but we will also support the states through a series of workshops, best practice sharing, etc.

What is NITI Aayog’s role in planning vis-à-vis its predecessor, the Planning Commission?
We are working on a 15-year vision document, a seven-year strategy and a three-year action plan which will coincide with the recommendations of the Finance Commission. NITI Aayog has to draw a vision document which is transformational and not incremental. It will also be in sync with the UN’s Sustainable Development Goals. We will cover non-traditional areas like full potential from our coastlines via holistic, sustainable development, renewable energy, internal security and defence, etc.

What are the other potential areas where the Aayog can play a decisive role?
There are two unique areas which NITI Aayog is working on. One is Sustainable Development Goals and the other is sustainable development of 10 islands in India to promote integrated development. That’s a huge task but it has the potential of transforming India in an innovative, creative and sustainable manner.

What are the challenges in infrastructure development in the country?
A lot of infrastructure movement is being driven by the government and through public investment. Several held up projects have moved forward after the intervention of project monitoring group in the cabinet secretariat. But the challenge for the country is to revive private investment now. This would require us to push for greater credit flow to the private sector. Banks also need to expeditiously clean up their NPAs (non-performing assets).

How is the Aayog playing the role of a bridge between the Centre and the states?
NITI has done away with the plan process (both the five-year and annual plans) as well as the process of allocating resources. This has enabled us to create completely new energy. There is a lot states can learn from each other simply by observing best practices, which can have massive impact. We have prepared a compendium of best practices of states. We are also supporting states through detailed project reports, feasibility studies and transaction advisors. Our aim is to assist them with best global expertise.

Does that provide enough monitoring canvas to the Aayog?
Once the government has decided to allocate 42% of tax resources to states, our objective should be to handhold and facilitate states by providing them with technical support and then assess them in terms of outcome-based monitoring. In a vast country like ours we should not get into the processes they adopt. We should give them freedom and flexibility to operate and monitor only outcomes. India must move from inputs and outputs to outcomes.

What is the template for the social sector?
One of the big things NITI is doing is to help institutions achieve international standards across social sectors. It will be extremely difficult for India to grow without radical improvement in social sectors – education, health, nutrition. Our focus is on these sectors. Our institutions are outdated. You can’t deliver 21st century change with 19th century institutions. We need to redesign them in a similar manner as we are tackling the revamping of the Medical Council.

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