New Delhi: Noted economist Arvind Panagariya has resigned as vice-chairman of the Niti Ayog to return to academics, triggering a search for a new second-in-command at the federal policy think-tank.

An official privy to the development said on condition of anonymity that Panagariya will remain in office till 31 August when he will end his two-an-a-half-year stint at the body that replaced the Planning Commission.

“Panagariya wishes to return to teaching," said the official.

As the first vice-chairman of Niti Aayog, the former chief economist of the Asian Development Bank (ADB) presided over the transformation of India’s policy and economic goal-setting process, giving more say to state governments in the national development agenda.

To accommodate the views of state governments in deciding national economic priorities, the Modi administration created the Niti Aayog in 2015 in a departure from the earlier Soviet-inspired centralised planning and resource allocation dispensation.

While Niti Aayog no longer gets involved in resource allocation for development programmes, it acts as a link between central and state administrations in planning and implementing reforms.

On Panagariya’s watch, Niti Aayog prepared a 15-year vision document in April this year, setting economic and social goals for the Union and state governments, and a three-year action plan that proposed executive action across sectors.

The action plan proposed a medium-term spending framework and lowering of fiscal deficit to 3% of GDP by 2018-19, down from 3.2% projected for the current fiscal. The think-tank also proposed disinvestment in loss-making national carrier Air India and auction of stressed assets to resolve the bad loan crisis.

The former professor of Indian political economy at Columbia University had also worked with the World Bank, International Monetary Fund and the United Nations Conference on Trade and Development (UNCTAD) in various capacities. Panagariya was conferred the Padma Bhushan, the third highest civilian honour in the country, in 2012.

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