By Arvind Panagariya and B Venkatesh Kumar

Transformational reforms had acquired great momentum, when in 2004 Lok Sabha elections the government of Prime Minister Atal Bihari Vajpayee unexpectedly lost mandate. Under the United Progressive Alliance (UPA), which came to the helm, reforms came to a sudden stop. Then, during its second term, the UPA introduced several anti-growth policies reminiscent of the Indira Gandhi era.

After Prime Minister Narendra Modi came to office in 2014, India saw a return to reforms with three important and politically difficult reforms introduced: Insolvency and Bankruptcy Code, Goods and Services Tax, and Direct Benefit Transfers. Infrastructure building received a boost as well. That helped the economy shift to the average annual growth rate of 7.5% during the past five years from 5.9% during the last two years of UPA.

India has now returned Modi with the same overwhelming mandate it gave him in 2014. Encumbered by wishful thinking, media pundits had used caste, religion and region-based calculations to predict a fractured mandate, even a hung Parliament this time around. But Indians thought differently: discarding all these considerations, they put their faith in Modi and placed their fate in his hands.

Recognising that a similar mandate is improbable third time around in 2024, the next five years are most critical for India. What the country does during these years will determine whether or not it realises its destiny. All hesitations and frictions characterising our complex bureaucratic system must be overcome and wheels of the economy freed from the mud and sand that keep it from racing to double digit growth rates.

How can this be done? First and foremost, it must be appreciated that private entrepreneurs are the true drivers of economic growth, not the government. There is a strong tendency on the part of all in India –businesses, NGOs and households – to think that the government must do everything. Ironically, the vast majority of the government officials also think that they must and can do everything.

This must change. The government must limit its responsibility to creating healthy business environment by bringing about appropriate changes in laws, rules and procedures and business should take responsibility for job creation and production activity. The government must have a clear vision to exit production activities that serves no public purpose.

No doubt, ensuring this division of responsibility between public and private sectors requires rapid and radical reforms. How can these reforms be implemented in just five years?

During its first term, the Modi government successfully deployed a governance model that relied on bureaucratic initiatives under his guidance and supervision. A key element in his governance model was the appointment of a number of groups of secretaries with each group assigned the task of preparing presentations on projects, programmes and policies to be implemented the following year in key sectors of the economy. The PM, the entire Cabinet and top bureaucrats then discussed the presentations over long sessions. Once finalised, these presentations became the road maps for the following year for the major sectors.

An advantage of this approach was that bureaucrats jointly owned the proposals and therefore diligently implemented them. But when it comes to radical reforms, this approach has a downside. By nature, bureaucrats are cautious and lean heavily in favour of projects and programmes. Even when they propose policy changes, they are piecemeal and rarely go beyond tinkering.

To pave the way for radical reforms, we suggest a different approach. At the outset, the government must identify a half dozen key areas of reform. These could potentially include labour laws, land laws, higher education, international trade, privatisation, banking reforms and centrally sponsored schemes. In each area, a time-bound mission must be launched with a senior bureaucrat with domain knowledge heading it. Within two months, the mission head must provide a precise road map for radical reforms with a time-bound action plan.

The PM must oversee the implementation of each of these missions and take periodic reports from the mission head. In turn, each mission head should have direct access to him for one-on-one meetings so as to be able to freely seek his help in removing obstacles to the mission’s work posed by any functionaries, departments or ministries.

Each mission head must have a professional with deep knowledge of the area of reform as adviser. A team of bright and energetic young professionals should in turn assist the mission head and adviser. Experience of the Niti Aayog and Rashtriya Uchchatar Shiksha Abhiyan in recent years shows that young professionals, unencumbered by the compulsions of regular bureaucracy, can play a critical role in helping speed up the work of ministries and missions.

Each mission should have its own budget with the mission head having full authority to decide how the funds are used. Rather than seeking prior approval for each expenditure item, it should suffice for the mission to send a statement of its expenditures each quarter to the financial adviser representing the department of expenditure. It is important that we move away from a system that relies on multi-layered bureaucratic rules to one that places trust in at least its senior officers. Similar autonomy to the mission in other areas can add to the speed of its work and implementation of reforms.

Arvind Panagariya is Professor, Columbia University.

B Venkatesh Kumar is Professor, Tata Institute of Social Sciences