Why cooperative and competitive federalism is the secret to India’s success

india19

(Naveed Ahmed, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Amitabh Kant, NITI Aayog


Competitiveness is an idea that has stood the test of time. From early macroeconomic ideas of comparative advantage and competitive advantage, our understanding of the determinants of competitiveness has evolved considerably. More recently, the concept of national competitiveness and regional competitiveness has come into the mainstream.

India can only achieve its ambitious growth targets by enhancing competitiveness at all levels of government. As the literature on competitiveness notes, there exists a powerful connection between economic and social development – improving competitiveness requires investment in both. This, in turn, requires coordination of our economic and social policies across various levels of government.

Consider India’s experience with the Goods and Services Tax (GST), for example. To implement this reform consensus among states had to be built. Now, we have the GST Council, with states as equal members who are part of national fiscal policy.

 

Agriculture, an area which remains unreformed in India, offers a similar picture. The Indian constitution has placed agriculture in the domain of state governments. Again, to institute reforms, coordination and consensus-building are required to unlock the agriculture market in India. NITI Aayog has played a vital role in bringing agriculture reform to the fore. This led to the Prime Minister establishing a “high-powered committee of chief ministers” to recommend reform in Indian agriculture markets.

While the coordination of policies across various levels of government requires cooperation, the role of fostering a sense of competition among sub-national governments cannot be ignored.

We have seen many success stories in this regard – take India’s improvement in the World Bank’s Ease of Doing Business (EoDB) Index. We have jumped 65 positions in the EoDB rankings. Given our federal structure, states have led the institution of many reforms. This was made possible through the creation of an EoDB Index for Indian States and the release annual rankings to indicate areas in which they are lagging. This sense of competition prompted corrective action and made India a much easier place in which to do business. It also speaks volumes that while the World Bank’s EoDB Index only considers Delhi and Mumbai when assigning India’s scores, these states do not come top of India’s index.

Image: The World Bank

Another major success story featuring collaboration between states is our Aspirational Districts Programme (ADP). We identified 115 laggard districts in terms of socio-economic outcomes and instituted a programme with convergence, collaboration and competition as the core tenets. Again, states are the main drivers behind this programme, working with central government officers to detect “low-hanging fruit” opportunities for immediate improvement.

As part of the programme, we set 49 key performance indicators covering sectors such as health and nutrition, education, agriculture and water resources, and financial inclusion and skill development. We consciously assigned a higher weighting to education, health and nutrition parameters to recognize that human capital development is of equal importance to physical capital in fostering competitiveness.

We publish delta rankings every quarter, showing the best and worst-performing districts and the results are encouraging. Several districts have managed to raise their health, education and nutrition outcomes since the programme was started almost 18 months ago. Similarly, in a push for sustainable development, NITI Aayog recently released the second rankings of states on the Composite Water Management Index (CWMI).

Only through working with states can India’s development goals be realized. While the policy model in the past five years has empowered states, we now need to take these reforms to the next level. Empowering our cities through implementing the 74th Constitutional Amendment is the next necessary step in building India’s national competitiveness as it will allow for greater accountability, transparency and independence in decision-making to local governments.

There are several lessons that emerge from India’s experience. Fostering a sense of competition among sub-national governments is perhaps the biggest discovery. By publishing rankings and rewarding top performers, several states and districts have driven reform at the ground level. The competitive spirit has been encouraged by naming the best performers and shaming the worst. Since these rankings are in the public domain, the accountability of both elected officials and administrators has risen. This has led to good governance being equated with good politics.

The importance of working towards a common goal is another crucial finding. For example, we have targets of reaching a $5 trillion economy, transforming the 115 aspirational districts and doubling our exports. These common goals are a prerequisite in the design of state-specific interventions. For example, many states will have to invest in physical infrastructure and undertake reforms in agriculture and labour.

The specificity of interventions and empowerment of officials to design innovative interventions are two further lessons. Through the ADP we have identified several best practices, which are shared with other districts for study and possible replication. These best practices can only emerge when young officers at the district level are encouraged to be bold and innovative with their ideas to achieve our national goals.

India

What is the World Economic Forum’s India Economic Summit 2019?

Under the theme, Innovating for India: Strengthening South Asia, Impacting the World, the World Economic Forum’s India Economic Summit 2019 will convene key leaders from government, the private sector, academia and civil society on 3-4 October to accelerate the adoption of Fourth Industrial Revolution technologies and boost the region’s dynamism.

Hosted in collaboration with the Confederation of Indian Industry (CII), the aim of the Summit is to enhance global growth by promoting collaboration among South Asian countries and the ASEAN economic bloc.

The meeting will address strategic issues of regional significance under four thematic pillars:

• The New Geopolitical Reality – Geopolitical shifts and the complexity of our global system

• The New Social System – Inequality, inclusive growth, health and nutrition

• The New Ecological System – Environment, pollution and climate change

• The New Technological System – The Fourth Industrial Revolution, science, innovation and entrepreneurship

Discover a few ways the Forum is creating impact across India.

Read our guide to how to follow #ies19 across our digital channels. We encourage followers to post, share, and retweet by tagging our accounts and by using our official hashtag.

Become a Member or Partner to participate in the Forum’s year-round annual and regional events. Contact us now.

At a broader level, state-specific strategies for development are needed. Top-down planning has not produced the desired results and India’s system of developing five-year plans has ended. We now have a 15-year vision document, a seven-year strategy document and a three-year action agenda. Having published The Strategy for New India @ 75, with extensive input from state governments, NITI is working with several states to prepare state-specific development strategies. A guiding principle behind these strategies is that local strengths need to be employed.

The next finding is that real-time data is essential to unlock bottlenecks and achieve results. Robust monitoring and evaluation systems are needed so that blockages can be identified, potential solutions deliberated and the results monitored. India’s success stories in fostering competitive federalism have been backed by a robust data collection, validation, monitoring and evaluation framework. The ADP mentioned earlier is one such example of the use of real-time data. Through the Development Monitoring and Evaluation Office (DMEO), NITI Aayog has prepared a comprehensive Output-Outcome Monitoring Framework (OOMF) that defines, monitors and evaluates government schemes in terms of outcomes. It was recently adopted in the 2019-20 budget to strengthen outcome-based monitoring.

Instituting a system of cooperative and competitive federalism has been a hallmark of India’s policy-making in the past five years and has achieved considerable results. Cooperative and competitive federalism are complementary ideas that will drive India’s growth story in the coming decades.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Cities: a ’cause of and solution to’ climate change

MEPs cap prices of calls within EU and approve emergency alert system

UN chief hopes for new agreement after Israel concludes international observation mission

How to stay in shape and step up support for refugees

Innovation is the key to the pay-TV industry’s long-term growth

‘Dangerous nationalism’ seriously threatens efforts to tackle statelessness: UNHCR chief

Is Eurozone heading towards a long stagnation?

Spain will soon overtake Japan in life expectancy rankings. Here’s why

Sovereign wealth funds could increase equality in a post-COVID world

Election-related violence claims 85 lives in Afghanistan: UN report

Countries must make teaching profession more financially and intellectually attractive

An economist explains what happens if there’s another financial crisis

Commissioner sings “Volar-e” but the European driver no “Cantar-e”

COP21 Breaking News_03 December: Transport Industry Drive for Improved Energy Efficiency and Electro-Mobility to Stem High Growth of Emissions

This fascinating map shows how food moves around the US

Draghi left alone with no hope of boosting EU growth as Merkel just focuses on next elections

These 11 companies are leading the way to a circular economy

From social entrepreneurship to systems entrepreneurship: how to create lasting change

Parliament votes for €1 billion in aid to Ukraine

How can education empower youth to become tomorrow’s leaders

Worth going ‘extra mile’ for a new Syrian constitution, UN envoy urges

TTIP is not dead as of yet, the 15th round of negotiations in New York shouts

250+ senior claims leaders under one roof, exchanging transformation strategy

The importance and the need of mobile technology in the health care system and in saving lives

MEPs share concerns about COVID-19 variants

Here’s how we can make innovation more inclusive

ECB settles the bank resolution issue, makes banking union tangible

Davos on Climate Change: citizens demanding more actions while CEOs tried to balance profit with sustainability

Coronavirus: Commission expands talks to a fifth vaccine manufacturer

A 3-step plan for carbon-neutral cars

COVID-19 Update: Solidarity and Joint Efforts Shall be the Main Theme For China and Europe in the Fight Against the Outbreak

2018 Golden Pen of Freedom Awarded to Maria Ressa of the Philippines

Trump badly cornered at home by agribusiness and steel consumer lobbies: Trade

As conflicts become more complex, ‘mediation is no longer an option; it is a necessity’, UN chief tells Security Council

European Youth Forum on Summit on Jobs and Growth

The European reaction to the neo-fascist wind

Venezuelan exodus to Ecuador reaches record levels: UN refugee agency steps up aid

MEPs debate Brexit and relations with China following EU spring summit

Brexit may finally not really happen; The Brits have second thoughts

COVID-19: lessons from Italy on public-private healthcare procurement

Mental health and social isolation: how do have an active participation in self-care?

Climate change and health: creating global awareness and using earth resources wisely

How cocoa farming can help stop deforestation

5 ways the ocean can contribute to a green post-COVID recovery

Trying to cure bank cancer with analgesics

How Islamic finance can build resilience to climate change

COVID-19: Why we must take the widescreen view of workforce uncertainty

Want a more inclusive society? Start with mobility

Mental Health: Role of the individual for their well-being in the pandemic

EU confronts environmental threats as global leaders attempt to revive the global sentiment at NYC climate week

‘Free state aid’ for imprudent banks

We need natural solutions to fight ocean and climate risk

With field schools in Kenya, UN agriculture agency teaches techniques to combat drought

It’s time to switch to a four-day working week, say these two Davos experts

Why building consumer trust is the key to unlocking AI’s true potential

What paleoecology can teach us about fires in the Amazon

UN ‘regrets’ new US position on legality of Israeli settlements

In Yemen, Special Envoy sees UN role in preserving ‘essential’ aid pipeline at country’s major port

Eurozone bank rescues ‘a la carte’ until 2015 then only bail-ins

Peacekeeping chief honours Tanzanian troops in Zanzibar, a year on from deadly DR Congo attacks

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s