National Institution for Transforming India (NITI) Aayog is the new avatar of the earlier Planning Commission. In a landmark decision based on Prime Minister Narendra Modi’s initiative and backed by increasing calls from state heads, NITI Aayog has been set up as a think-tank for formulating a new policy framework in keeping with the changes and challenges of rapidly evolving socio-economic scenario in the country.

The guiding principle behind NITI Aayog is cooperative federalism, based on empowerment and equality of all stakeholders. In a departure from the past, the new body will ensure a bottoms-up approach that will encourage a proactive and participatory development agenda at the village level, which will then move for approval and guidance at higher levels within the state, after which the final recommendations shall reach NITI Aayog.

This process is to ensure greater inclusiveness and participation from the states and provide strategic and technical advice, covering all aspects of policy planning and developing state or region- specific programmes, while ensuring that target benefits reach all sections of society.

So how is NITI Aayog different from the earlier Planning Commission?

The Planning Commission was set up in 1950 by the first Prime Minister Jawaharlal Nehru, who headed the institution, as its first Chairman.

The Planning Commission was set up to help a strong Centre plan and formulate policies that would impact all states. In fact, the first Five Year plan was focused almost entirely on developing the agriculture sector. Subsequent Plans included development of the socio-economic sectors of the nation.

The major difference in approach to planning, between NITI Aayog and Planning Commission, is that the former will invite greater involvement of the states, while the latter took a top-down approach with a one-size-fits-all plan.

The Planning Commission’s role was formulation of broad policy and its capacity was more advisory. NITI Aayog shall have powers for resource allocation to states, based on their respective needs.

The states had little direct say in policy planning, which was the purview of the Planning Commission. Involvement of the states was indirect and through the National Development Council.

Criticism against the Planning Commission

Over the years, there has been a general feeling among politicians, bureaucrats, and academicians, at the central and state levels that the Planning Commission had outlived its utility.

More recently, the Planning Commission had come under criticism for incurring expenses of Rs 35 lakh in renovating two toilets. In addition, the Deputy Chairman had also been criticised for excessive expenditure incurred on international travel.

Over the years, various Chief Ministers have been voicing their reservation against the non-inclusive approach of the Planning Commission, given that the states were responsible for implementation of most of the development plans.

Narendra Modi, as the Chief Minister of Gujarat, also experienced the policy diktat of the Planning Commission and held the opinion that the existing body needed to be restructured and made more inclusive, with greater participation from states in policy planning.

Towards the same, the Prime Minister had recently called a meeting of all Chief Ministers and heads of Union Territories to deliberate on the purpose, structure and objectives of the new body. All state heads held the common view that greater decentralisation and inclusion of state view was needed in the planning process.

New structure under NITI Aayog

NITI Aayog will be headed by the Prime Minister and will have a Governing Council, comprising Chief Ministers of states and Heads of all Union Territories. The Governing Council replaces the earlier National Development Council.

In addition, there will also be a Regional Council comprising of Chief Ministers and Lieutenant Governors of Union Territories, which will be mandated to develop plans that are region specific.

The Aayog will have 7-8 full time members and two well-known and accomplished part-time members, drawn from leading research organisations and major universities. Four Union ministers, nominated by the Prime Minister, will also be included in ex-officio capacity.

On the PM’s invitation, specialists across domains, will be invited to share knowledge and add value to the planning process, making extensive use of technology in developing sustainable plans and programme implementation. The Prime Minister shall appoint a full time Chief Executive Officer with a fixed tenure and may sanction a dedicated secretariat, if deemed necessary.

Vision and objectives of NITI Aayog

Based on the belief that strong states make a strong Centre, NITI Aayog is structured to promote cooperative federalism. The new body will build mechanisms to include need-based planning at the village level and aggregate the needs at higher levels of government.

Policy planning will be long term, with in-built mechanisms for course correction, based on emerging economic scenario. National security interests will  be kept in focus, while formulating plans on economic and social development. Special focus will  be on those sections of society that are at the risk of being left out of the development process.

The planning process must encourage innovation, knowledge and entrepreneurial thinking and include close interaction with all stakeholders and research bodies, both in India and overseas and seek suggestions and opinion for a more pro-active and relevant policy plan.

Aiming to facilitate greater inter department and inter sector coordination, and  avoid bottlenecks in smoother policy implementation, the institution is to develop a knowledge-based repository of information and data, to enable all stakeholders to access the resource pool and help in developing best practices for sustainable and equitable development.

Technology upgradation and capacity building will be encouraged to promote efficient implementation of programme initiatives.

Opposition parties voice reservations against the new body

The Congress has been vocal in its opposition to NITI Aayog, expressing reservation on the need for creating a new institution, which they said was a ‘threat’ to the federal structure, as the real power would lie with the PMO.

They held the view that the Planning Commission could have been retained but with changes to its existing structure and operational objectives instead of creating yet another organisation, whose acronym was a mere Hindi translation of ‘Planning Commission’.

Only time will reveal how effective and pivotal NITI Aayog proves in central planning and how various states meaningfully participate in making the new body a success.

Related Information:

First Meeting of NITI Aayog

NITI Aayog Is Up

Planning Commission of India