Interview/ Amitabh Kant, CEO, NITI Aayog
What has changed in the past two years?
We are growing at a rate of 7.5 per cent. India is an oasis of growth in a barren economic landscape. But, the challenge is to grow at 9 per cent to 10 per cent for three decades or more.
You have to make India a very easy and simple place to do business and scrap a number of rules. We have jumped up 12 positions in the ease of doing business. A lot of procedures and regulations have been simplified, not only at the level of the Central government, but also in the states.
How is the Centre encouraging the state governments?
We have challenged the states and created a sense of competition among them. For the first time in India a third party, the World Bank, was used last year to evaluate the performance of the states and we ranked the states. The first and foremost is the ease of doing business.
What are the steps the government took to attract foreign direct investment?
The government has laid a lot of focus on improving the quality of infrastructure where there has been a major transformation. The last two years have seen an increase of 39 per cent in roads, 56 per cent in award for construction, 75 per cent in the commissioning of railways lines and 65 per cent in capital investment. In airports, the passenger traffic is up by 21 per cent.
Major reforms were introduced in Department of Biotechnology, in LPG and kerosene. New licensing policy has also been announced. We have taken up an ambitious target of 175 gigawatts. Solar tariffs have fallen by almost 30 per cent.
Which programme would you single out as working towards transforming India?
Make in India. Without it, do you think we would have had a 48 per cent growth in FDI inflows? How has India beaten China as the number one destination [for FDI]? Without Make in India, we would never have been able to beat China.
How important is FDI?
In a globalised world, India becomes an integral part of the global supply chain. To do that, you have to open up your economy. We have opened up a number of areas such as defence, insurance and railways. FDI in India has increased by 48 per cent whereas globally it has fallen by 16 per cent.
What about the transformation in governance?
There has been greater consistency, predictability and clarity in our policies. There has also been transformation in administration.
And in the economy?
It has moved from being only a subsidy-based economy to a more efficiency-based economy. Eight groups of secretaries were asked to work on different aspects to ensure economic growth, with inclusion and equity. These groups submitted their reports on the basis of which all the departments have made their action plans. These action plans have been put together by Niti Aayog. We are monitoring and reviewing them. There are sharp increases in total factor productivity.
How are the implementation of plans for transformation monitored?
The prime minister holds regular outcome meetings to review the performance. The presentation is on the targets, what has been achieved and what more needs to be done. The performance of different ministries is analysed. And on the basis of outcome-based monitoring we have created a dashboard, which is then used to evaluate the performance.
What is Prime Minister Narendra Modi's involvement in meetings?
He is very patient. He has an understanding [of what states want] because he has been [Gujarat] chief minister for 12 years. He is analytical and asks a lot of sharp questions. He has created an atmosphere where states are trying to learn from each other.
What is the level of involvement of the various ministries?
Take Make in India, for instance. Twenty-five ministries are involved. One of the things we do at NITI Aayog is to have a dashboard that records performances. Anyone achieving 95+ per cent is green, anyone achieving 90+ is yellow, less than 90 is red. We share it with the prime minister, the ministries and the states. Nobody wants to be red.
How have the states responded to this exercise? Are they on-board?
When you challenge the states, you also have to support them. I have seen Jharkhand, Chhattisgarh radically improving in the ease of doing business. There has been a revolutionary movement for a change in mindset.
How serious were the legacy issues?
Almost every sector was at a standstill. Coal, power and telecommunication sectors were at a standstill. At least these sectors have come back to life. All these sectors have been revived.
However, we have not been able to reverse the labour laws framed in the 1970s. We have not been able to undo the complicated land laws, which are anti-farmer anti-growth and anti-business.
Manufacturing continues to be under stress...
Forty-five per cent of FDI is coming into manufacturing. That’s a very high number. SMEs are not under stress. Yes, companies and banks have over leveraged themselves. This budget has put in a lot of resources into creating domestic demand in roads and ports. I am seeing a huge growth in demand for consumer goods.
There is a perception that India is a difficult country.
India is a difficult country. It is. But, in the past two years, we have made it simple. Now, India is number one in many things. And, we will see the transformation in the next eight to ten months.
We are still too slow in branding and marketing. We are not promoting ourselves adequately enough as an investment destination. We need to do that more vigorously.
Is it easy to effect transformation when there is a global slowdown?
No. It is always tough, because of your legacy of the past 68 years is very complicated. Without doing away with that, we can get into a bigger mess. The legacy issue is enormous, I can't put a percentage to it. The country was not only moribund, but we were taking wrong decisions, too, as an economy.
When will the achche din come?
Achche din is just a phrase. I don’t want to get into the politics of it. To sustain a growth of 7.5 per cent, we are carrying out structural reforms, which will pay us richly when global growth picks up. Jobs will automatically be created if you continue growing. India must continue to grow for a long time. A lot of these things are in progress and we are on the right track.
Your views on the prime minister.
He has a hands-on approach and has a good understanding of most of the things. He is a very patient listener, and brings in his experience when we ideate. He is one of the few people who take decisions on administrative measures quickly and fairly, on the basis of merit.
This government could easily have stopped the Aadhaar movement. The prime minister knew that it was a game changer for India and did not let it get politicised. He feels that while you are not removing subsidy, you need to make it targeted and the only way you can do that is through the Aadhaar. So, he realises what is good and pushes that. He follows up on everything.
With a very strong and centralised PMO, questions are raised on Modi being a team player.
That is not true. When I was secretary, Department Of Industrial Policy & Promotion, I drove the change. I sent 17-18 notes for cabinet approval, and they were all approved. But yes, the prime minister expects his ministers and secretaries to follow up and deliver. The secretary delivers when he realises the political system is clear about what they want to achieve. The horse is as good as the rider. If the rider is not able to ride, things go haywire.
Modi is pushing for faster and quicker change. In fact, he is trying to change the mindset. When we say smart cities, cities don't turn smart on their own, people's mindset has to change, they must become change agents. We expect the prime minister to do everything, from cleaning India to building toilets because he spoke of them.