New Delhi: Eminent free market economist Arvind Panagariya, an Indian-born economics professor at Columbia University in New York, has been appointed to run Indian Prime Minister Narendra Modi's new Policy Commission, set up to modernise economic strategy after decades of Soviet-style central planning.
Mr Panagariya's market-friendly, pro-growth economics has helped shape Modi's outlook and is seen by many as a Margaret Thatcher-like attack on overbearing labour regulations and state-run companies.
He told Reuters last year he rejected such comparisons, saying India needed to restore space to markets but that there was still a need for growth in social spending in a country that has about a third of the world's extremely poor.
"Policies of Reagan and Thatcher sought to shrink the role of the state and expand that of the market in what were already market economies," he said in an email interview, given in his capacity as an adviser to Rajasthan.
"Here, in India, we are trying to give back markets the space that belonged to them in the first place and was usurped by overactive regulations," he said.
"In effect, we are trying to move from far left of the centre towards the centre," he said. "The reforms are intended to expand social spending of the government as also to make this spending effective."
Mr Panagariya could not be reached for comment on Monday.
<b>FISCAL LOOSENING?</b>
Mr Panagariya has previously advocated a loosening of fiscal deficit targets that he said were stifling growth to allow for more capital spending.
That view is shared by Arvind Subramanian, another heavyweight economist brought in from the United States last year to advise the finance ministry. In a December economic report Mr Subramanian advocated higher infrastructure spending by the government to kick-start stagnant private investment.
Their views could be influential as Finance Minister Arun Jaitley prepares his first full Budget, to be presented in Parliament in February.
Mr Modi scrapped the 65-year-old Soviet-era Planning Commission in the New Year, replacing it with a body he said would do more to involve the regions.
The 64-year-old premier will formally chair the new National Institution for Transforming India (NITI), which is designed to function as both a think tank and a policy forum.
Mr Panagariya, as vice chairman, would have a pivotal role in coordinating economic strategy and hold cabinet rank. NITI's permanent staff would all answer to Mr Modi, while India's 29 states and seven union territories would also be represented.
Mr Panagariya's market-friendly, pro-growth economics has helped shape Modi's outlook and is seen by many as a Margaret Thatcher-like attack on overbearing labour regulations and state-run companies.
He told Reuters last year he rejected such comparisons, saying India needed to restore space to markets but that there was still a need for growth in social spending in a country that has about a third of the world's extremely poor.
"Here, in India, we are trying to give back markets the space that belonged to them in the first place and was usurped by overactive regulations," he said.
Advertisement
Mr Panagariya could not be reached for comment on Monday.
Advertisement
Mr Panagariya has previously advocated a loosening of fiscal deficit targets that he said were stifling growth to allow for more capital spending.
Advertisement
Their views could be influential as Finance Minister Arun Jaitley prepares his first full Budget, to be presented in Parliament in February.
Advertisement
The 64-year-old premier will formally chair the new National Institution for Transforming India (NITI), which is designed to function as both a think tank and a policy forum.
Advertisement
© Thomson Reuters 2015
COMMENTS
Advertisement
PM's De-Escalation Message In Call With Netanyahu Amid West Asia Tension PM Modi Urges Indian Olympians To Join 'Ek Ped Maa Ke Naam' Campaign PM Shri Schools Have Become Inspiration For Rural Children: Dharmendra Pradhan Parents Gave Names Of Interns, Doctors To CBI In Kolkata Horror: Sources Who Is Jasveen Sangha, "Ketamine Queen" Charged With Matthew Perry's Death How Extreme Weather Is Leading To Rise In Child Marriages In Pakistan Two Sisters Returning From Court Run Over By Car In UP: Cops India Sends 1,400 kg Anti-Cancer Drugs To Syria In Humanitarian Assistance Police Arrest Suspect In Bihar Dalit Girl Kidnapping, Murder Case Track Latest News Live on NDTV.com and get news updates from India and around the world.