Andhra Pradesh could become the Shenzhen of India and could replace Singapore as the costal port, if we prepare now, says Arvind Panagariya, the Vice Chairman of Niti Aayog of India, in an exclusive interview with M.Rajendran. Highlighting the importance of Southern states in playing critical role in developing the coastal economic zones, he urged the state governments to prepare the infrastructure for quick implementation of GST.
How would you describe the journey so far in Niti Aayog?
It has been a challenge, no less of it than I had expected. A new institution is a bit of challenge, and in this case the predecessor institution (Planning Commission) had been an august institution. It had in existence of for 64 years and impressive leadership, all through. I think we have done well and begun to reshape the institution and have made good progress so far.
What is your vision for the new institution?
It is currently in the process of taking shape. One of the key element and objectives for this institution is to promote cooperative federalism. Even in designing our governing council, unlike in the Planning Commission, the Chief Ministers of the states and the governors of the Union Territory were made member of the governing council, in addition to Prime Minister and other Cabinet Ministers and Vice Chairman, that is why it is Team India. My message is, that this is an institution for the states and we are their outpost in New Delhi, their ambassadors here. Our relationship with states is more equal than what it was earlier.
Are states showing positive response?
We are also the intermediate between the State and Central Ministries. So if a State approaches us with a set of issues that they are trying to sort out with Central Ministries and are not making any progress, we then intermediate. I personally sit at these meeting. We did one successfully with Telengana State and seven Central Ministries, they had 20 issues. We had both parties to discuss and within two hours all the issues were sorted. Now Rajasthan Government has approached with even larger set of issues.
How do you see the role of Southern states in the overall economic growth of the country?
All the southern states have a critical role to play. My last book before I joined Niti Aayog was on 'Making miracles in three states--Andhra Pradesh, Bihar and Gujarat.' AP before it broke up, in the early 1990s was better of than Uttar Pradesh, but by the time our study was completed AP had taken off, poverty had declined and is truly doing well. The new AP has huge potential, it is near the state and if it plays its card right, Andhra Pradesh could become the Shenzen of India.
But India as such has not focussed on costal development?
I think in longer term costal in India will replace Singapore as port city. Andhra Pradesh has two deep dredged ports, so there is huge potential for Vizag and other ports.
Can this also help growth of jobs, a major area of concern for the government?
We should seriously think of developing 2-3 coastal economic zone, similar to the way China did. In a region which has already some success and is near the port. It should provide a business friendly ecosystem and a policy regime to allow import and exports without hurdles. That will push not only the ease of doing business, ease of importing and exporting. Reduce the number of forms to fill. This can be a magnet for many firms that are existing China. Further with lower labour cost and growing labour forces in India and the falling Chinese labour forcers, such zones will attract the Chinese companies exiting China. So they bring their technology, investments, management practices and also their market connections. And they will hire our workers.
Which are the sectors do you see attractive for Chinese firms?
They will be in labour intensive indutry Textile, clothing, footwear,, electronic and electrical products, consumer goods, food processing. If we can the larger players of global markets here, especially in Southern India, they will help also help create an eco-system around them. Then both small and medium firms in India will flourish. Large global players want, high standard of quality, efficiency and they also create skills. Which will bring in jobs and both make in India and skill India will be achieved.
What has been the response of the government?
We are discussing. Prime Minister himself is keen on port led development as part of Sagarmala scheme. It is not just developing ports, but port led and the costal economic zones gets fit into that. This would require some policy initiatives too. Trade facilitation at ports is to be done by the Central Government. It would require coordination between, Commerce Ministry , Reserve Bank of India, Finance Ministry.
Your views on implementation of GST .
The whole country will benefit , when it is introduced and southern states especially have a lot to gain. But it is not legislation that is delaying, the state government need to put in place the backend solutions now and not wait for the legislations to come. Because without proper information technology back up, it will not be possible for GST to work. Companies also need to have the required software installed for them to operate in a GST regime. So while the work is on for the legislative mechanism to get it rolling, the infrastructure should be ready, already for it to styart from the day it is implemented.