Columbia economist Panagariya wants government to give top priority to boosting

Arvind Panagariya, former vice-chairman of NITI Aayog

Columbia economist Arvind Panagariya, who is the former vice-chairman of NITI Aayog, the Indian government’s top policy think tank, says the new government must give top priority to boosting the country’s economy and signal a strong commitment to reforms and fiscal consolidation during the first 100 days of its governance.

“During the first 100 days the new government must show strong commitment to fiscal consolidation, inclusive of borrowing by off-budget public entities such as Food Corporation of India, to ensure that private sector is not starved of investment funds,” Panagariya told India Abroad from New Delhi in an email response to questions about the new government’s priorities.

Panagariya, who had served as the first Vice Chairman of the NITI Aayog from January 2015 to August 2017, expressed inability to speak in details about the tasks ahead for the new government due to his severe time constraints, but emphasized areas requiring attention during the first 100 days.

This includes privatizing on average one public sector unit per week, which he said is feasible, since more than two-dozen PSUs already have the cabinet approval. Panagariya also said the government should accelerate cleaning up of NPAs (non-performing assets) and infuse capital into Public Sector Banks (PSBs) to ensure that healthy credit growth returns.He also called for privatization of Air India.

“We should also create a new entity with charge for negotiating trade agreements and place it in the PMO along the lines of the USTR in the United States,” Panagariya told this correspondent.

Talking about longer term reforms, Panagariya called for overhaul of higher education, replacing the UGC Act by a modern National Higher Education Commission Act, which grants the authority to govern higher education institutions (HEI) to a governing board of each institution, opens the door to foreign universities, automates entry and exit of universities and colleges with minimal regulatory barriers, and provides for quality assessment of all colleges and universities with private accreditation agencies permitted.

Among his other prescriptions are creating a new entity with charge for negotiating trade agreements and place it in the PMO along the lines of the USTR in the United States and also wholesale reform of labor laws, land laws relating to acquisition, conversion of land from one use to another and tenancy and rental laws.

“Creation of entrepreneur-friendly Coastal Employment Zones covering areas of 500 km or more with a great deal of autonomy, including the power to write their own labor and land laws” are also something the government should consider.

Panagariya said he personally believes it would be good if the government in its first 100 days gives “a very strong signal for its commitment to reforms.”

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