24 October 2019

Editor's Space

Vision, Strategy, Action

 

The paradigm shift in the Niti Ayog’s new style of functioning at three different levels – starting with a fifteen-year long-term vision, a seven-year medium term strategy, and a three-year action plan on the ground, will bring about a decisive positive change in its style of planning and functioning. Contrast this with the earlier Five Year Plan whose time span from planning to implementation was too short to actually implement the policy on the ground, leaving a legacy of missed targets and backlog of pending and stuck projects in the infra sector. The three different levels of functioning make sense because it gives the Ayog a long term flexibility at all three levels so it can tweak policy and its actual implementation on the ground in accordance to problems encountered with an eye on obtaining concrete results.

 

The strategic shift in the Niti Ayog’s perspective was announced last month by Prime Minister Narendra Modi at the third meeting of the Governing Council of Niti Aayog, when he called upon the states to speed up capital expenditure and infrastructure creation to foster economic growth. The PM pointed out that while there has been a 40 per cent increase in overall fund allocation to states between 2014-15 and 2016-17, the percentage of funds tied to central schemes has declined from 40 per cent to 25 per cent.

 

The Niti Ayog’s synchronicity of Vision, Strategy, Action, in that order – needs to be seen in the current context of consequences faced due to delayed project execution in the infra sector. According to a report released by the State Bank of India (SBI), at its third Conclave on Banking and Economics, ‘Laying the foundations of India’s Growth,’ approximately 1,076 projects, worth at least `150 crore each, have incurred a cost overrun of 12.5 per cent. A third of the projects have been delayed and the time overrun was as high as 11 years in a coal project. The report calculated that during commissioning the original estimate for the 1,076 projects was `12.7 trillion, which has now escalated to around `14.3 trillion, a 12.5 per cent increase over the original cost. For larger infrastructure projects, the cost overrun is even more.

 

The Ayog’s new Niti will definitely expedite and ensure timely project execution.

 

Happy Reading!

 




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