Frustrated with a minister who didn’t get anything done but kept appointing committees, writing reports and talking about problems, Margaret Thatcher turned to him in a cabinet meeting and said “John, you know what your problem is? Your brain is not attached to your backbone”. Echoing Thatcher, the lazy explanation for the gap between knowing what India needs to do and getting it done is the absence of political courage. But I’d like to make the case that in an era of Central coalitions and regional parties, the problem is more complex. The mostly grammatical differences between poverty reduction ideas in various party manifestos for this election show that our problem is not ideas but execution. And that policy execution is largely sabotaged by a dated infrastructure for making trade-offs, resolving conflicts and crafting a shared vision of priorities between the Central and state governments. This requires a radical reboot of the National Development Council (NDC).
The NDC — a body chaired by the prime minister, with Union cabinet ministers and chief ministers as members — held its first meeting in November 1952 with 26 state representatives and three objectives: mobilising the nation’s resources for our plans, promoting common economic policies and ensuring balanced and rapid growth. India’s challenges come through in the wonderful compilation of the minutes of the first 15 NDC meetings. But by the 57th NDC meeting, held in December 2012, the drift had become obvious. It was an underwhelming affair, held in the wrong location, with too many attendees and no substantive discussions. The new government should convert the NDC into India’s top policy-making body, with the single objective of poverty reduction.
The tactical actions to energise the NDC are simple. Its ownership must shift from the Planning Commisssion to the prime minister’s office; unelected officials will never have political legitimacy or street credibility with chief ministers. The venue must shift from Vigyan Bhawan; its auditorium format, with a raised dais occupied by Central government representatives towering over state government representatives, is patronising and not conducive to the equality of a round table. The number of attendees must be drastically cut to only five cabinet ministers and two attendees from every state to improve the discussion and agenda. It must meet every year, with dates published one year in advance. Every meeting should be kicked off by a dinner hosted by the prime minister, meant only for NDC attendees, and some meetings should be scheduled as off-camera.
But the more difficult interventions pivot on making the NDC self-healing, potent and creative. We could start by creating three NDC standing committees in areas where traffic jams are currently hindering poverty reduction: infrastructure and transport, education, employability and employment, and public finance and taxes. These standing committees could meet every six months and debate difficult issues like GST implementation, making labour laws a state subject, an alternative to two thirds of the IAS officers in Delhi working on state subjects and micro-specifying the end use of 85 per cent of Central assistance, education regulation, building new cities, empowering real mayors, reviewing the relative roles of the Planning and Finance Commissions, road-mapping a move away from the plan and non-plan fiscal architecture, evolving working templates for building roads and power producer payments. These committees could invite expert members from Central and state governments, academia and the private sector, but the final recommendations must be politically owned. Each standing committee could have two NDC meeting cycles to submit a report, after which the chairmanship could rotate to another chief minister.
McKinsey recently estimated that 680 million Indians today lack the means to meet their essential needs: 57 million are excluded, 210 million are impoverished and 413 million are vulnerable. But it also estimates that reforms could help 500 million Indians cross the economically empowered consumption threshold by 2022. Any reform agenda built on subsidies or idealistic legislation is unsustainable — more people in India have cell phones than bathrooms; should we have a Right to Bathroom Act? Or should we try to understand how India got a cell phone into the hands of every Indian who wants one? We must avoid extremes because India is too big for purely local solutions and Centrally imposed solutions don’t leave room for nuance or innovation. Creating and sustaining a fertile ecosystem of prosperity needs more than spending money. Mckinsey estimates that, on average, Indians lack access to 46 per cent of the services they need and that just 50 per cent of government spending actually reaches the people. India doesn’t need more cooks in the kitchen but a different recipe. This recipe must be crafted, owned and shepherded by the new NDC.
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When I landed in the US for my MBA in 1994, there was a frontpage article in The Wall Street Journal which said that India was more interesting than important. I hope that journalist is eating the paper on which he wrote it. What is happening in India is not once in a decade or once a millennium but once in the lifetime of a country. India has made a new appointment for her tryst with destiny, and this needs a policy and political architecture which allows the Central and state governments to execute a shared vision. It has become common to say that 28 chief ministers matter more than one prime minister for India’s poverty reduction but that is probably simplistic. Great nations know that the magic lies in striking the fine balance between centripetal and centrifugal forces. As India shifts from strategy to execution, it is unclear — and irrelevant — whether the brain or backbone is the Central or state government. But it is clear that we need both. Rebooting the NDC is a great place to start.
The writer is chairman, Teamlease Services