‘Kutil Niti’ of NITI Aayog

R Arun Kumar

NITI Aayog was constituted by the BJP government immediately after it assumed power at the centre. This brought down the curtains on the Planning Commission. The intention behind the establishment of NITI Aayog has been very clear – deepening the neoliberal reforms. It has taken upon the task of international financial institutions like the World Bank, IMF to ensure the transfer of public assets to private players, reduce the role of government in welfare activities and confine the State to cater to the ruling class interests only. The recent Three Year Action Agenda and other documents brought out by the Aayog clearly establish this fact.

The Aayog outlined its ideas for the development of India through three vision documents: The Fifteen Year Vision (starting 2017-18 to 2031-32); the Seven Year Strategy (2017-18 to 2023-24) and the Three Year Action Agenda (2017-18 to 2019-20). The Fifteen Year Vision is to transform our country into a ‘New India’, while the Seven Year Strategy aims to convert the long-term vision into implementable policy as a part of ‘National Development Agenda’. The Three Year Action Agenda, “strategically aligns India’s goals with available resources, by predicting flow of finances during the 14th Finance Commission award period” to ensure the government’s goals are translated into action by 2020. With these ‘lofty ideals’, the Aayog has recently released the ‘three-year document’.

Before going into the actual ‘action agenda’ prescribed by the Aayog, we need to understand the circumstances in which these particular ideas are being floated through these documents. Traditionally, the push for neoliberal policies had come from the international finance agencies like the International Monetary Fund (IMF) or the World Bank (WB) or similar other institutions. In the name of advice, they coerce governments to implement structural reforms for the ‘economic advancement’ of the country. These conditions are part of their loan ‘packages’. In the course of the last two decades, these financial agencies had attracted bad reputation and invited peoples’ wrath for the policies they had advocated. In an ‘image cleaning’ exercise of sorts, these agencies are now employing new methods to pursue their reform agenda.



The Asian Development Bank, in its Handbook on Public Private Partnership, clearly states: “In the mid to the late 1990s, there was a slowdown in public–private contracting in infrastructure sectors, which was largely precipitated by a social backlash against the perceived preference for the private sector over the public sector in delivering infrastructure services in developing countries….The critical analysis….has led to the design of a new generation of transactions, which are now more commonly known as PPPs”. IMF puts it more succinctly, stating that the PPPs “carry on where privatisation had left off and as an alternative where there had been obstacles to privatisation”. NITI Aayog identifies PPPs as one of the important ‘growth enablers’ in its vision to ‘transform’ India!

Implementation of reforms has become easier for the WB and their ilk due to the presence of large number of their former employees in various positions of governments in different countries. We had our own Manmohan Singh, Montek Singh Ahluwalia, Kaushik Basu earlier. Today, we have Arvind Subramanian, the chief economic advisor, Arvind Panagariya, the vice chairman of NITI Aayog till a few days back and Urjit Patel, the RBI governor, who had done time in IMF and World Bank. The CVs of many a top level bureaucracy too show that they had at one time or the other rubbed their noses at the IMF or World Bank. The present vice chairman of the Aayog, Rajiv Kumar was trained at the Asian Development Bank (ADB), where he was a principal economist, at the Confederation of Indian Industries (CII) he was chief economist and at the Federation of Indian Chambers of Commerce and Industry (FICCI), he was the secretary general. All these loyal trained personnel are unleashed so that they need not be prodded about the policies they need to implement. And loyal they are, more than the king!

The presence of all these acolytes of World Bank ensures that our country continues to remain as one of the top three borrowers from World Bank. In 2004, the World Bank had brought out an ironically titled report, ‘Making the Services Work for the Poor’. This report states that services can be better provided to the people if they are taken out of the hands of the government and handed over to market forces. The report opines that politicians and electoral process adversely affect the service delivery mechanisms and hence should be freed from these influences. It hence recommends to consider the direct client-provider relationship, which is nothing but privatisation. But the Bank has a rider here, ‘the government cannot be completely ignored and there should be some role for it’. This is the PPP model, which the NITI Aayog is advocating today. This report talks about user charges, direct cash transfers to the beneficiaries in the form of vouchers, which the Aayog too strongly advocates in its vision documents.



The changes that the Aayog today advocates in fact have their genesis in the 1990s, during the regime of the Congress, United Front and BJP governments. The Eighth Plan talked about user charges, the Ninth Plan reduced allocations for infrastructure development and the Twelfth Finance Commission called for private sector participation and recommended that the state governments and even local bodies be allowed to directly take loans from international financial agencies. Many state governments immediately rushed to the WB and ADB for loans, which had come with stringent conditions. In the name of providing technical assistance, the WB had drafted legislations to enable the private sector participation in infrastructure and other sectors for states like Gujarat, Andhra Pradesh, Karnataka and Madhya Pradesh. Similarly the ADB too had its hand in drafting many similar model legislations, encouraging privatisation.

Another method adopted by these institutions is pushing the governments to appoint consultancy firms to prepare vision documents. McKinsey prepared the vision 2020 document for Andhra Pradesh and another firm Price Waterhouse Coopers had prepared a similar document for Karnataka. WB and ADB themselves have floated or funded many such consultancy firms to suggest reforms on their behalf. The  Administrative Staff College of India was set up in partnership with the WB Institute and the Centre for Good Governance, Hyderabad was set up with WB funding. These firms prepare plans and suggest administrative, economic and political reforms to the various levels of government, starting from the local bodies to the central government. The reason provided is, the state governments do not have the necessary time or competence to prepare plans for the development of their respective states!

NITI Aayog is established to perform a similar function at the all India level. The ADB states that to implement the PPP process, concrete reform steps are needed “to support the new allocation of sector roles such as the passage of laws and establishment of separate regulatory bodies” and this needs the “appointment of a powerful champion, or driver, for the process”. This ‘champion’ will be the “focal point for public communication and information, ensures that appropriate attention is given to the main issues, works with various parties to achieve cooperation/consensus, and leads the government toward decisions. The standing, credibility, and strength of mandate of the PPP champion are strong indications of the true commitment of the government to the PPP project. Political changes and powerful vested interests can all constrain the PPP process. The government has to set out the case for PPP in a convincing and transparent manner, anticipating concerns and questions. In this way, broader support for PPP can be earned to withstand shorter-term political pressures”.

Explaining what NITI Aayog is all about, its website states: “The institution plays a leadership role in policymaking in the central government, works closely with state governments, serves as a knowledge hub and monitors progress in the implementation of policies and programmes of the government of India. The institution provides the central and state governments with relevant strategic and technical advice across the spectrum on key policy elements....and the infusion of new policy ideas and specific issue-based support”. See how close the language of both of them match!

NITI Aayog is the ‘champion’ that ensures the smooth implementation of reform process as desired by the international financial institutions. A comparison of the specific policy prescriptions of international financial agencies with those of NITI Aayog, further cements this fact.

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