National Institution for Transforming India (NITI) Aayog is a government policy think-tank established in Jan 2015 to replace the Planning Commission. The stated aim for NITI Aayog’s creation is to foster involvement and participation of states in the economic policy-making process. It marks a long overdue shift from centralized planning to a spirit of federalism. In this blog the role, objectives and efficacy of NITI Aayog are discussed.
Composition of NITI Aayog
NITI Aayog comprises of the following:
- PM as the Chairperson.
- A Governing Council composed of C Ms of all the states and union territories with Legislatures and lieutenant governors of other union territories.
- Regional Councils composed of C Ms of states and Lt. Governors of union territories.
- Full-time organizational framework composed of a Vice-Chairperson, three full-time members, two part-time members, four ex-officio members of the Union Council of Ministers, a Chief Executive Officer and a Secretariat.
- Experts and specialists from various fields.
Planning Commision vs NITI Aayog
The Planning Commission was the brainchild of Pandit Jawaharlal Nehru. The model was heavily influenced by Soviet-style planning. The P M was its Chairman. The first Five-Year Plan was launched in 1951. Despite economic liberalization in 1991, the Planning Commission continued. Since 1997 the need for replacement of the Planning Commission with a new & more relevant institution, responsive to the present economic needs and climate in the country was felt. Thus, in line with the Government’s approach of minimum government and maximum governance, the NITI Aayog with a new structure and focus on policy, was established to replace the Planning Commission.
Role of NITI Aayog
Its primary role is to serve as a think tank for the government, to give strategic and technical advice across the spectrum of key elements of policy. This includes matters of national and international importance on the economic front, dissemination of best practices from within the country as well as from other nations, the infusion of new policy ideas and specific issue-based support. It was expected that the old Planning Commission should evolve into a “think tank” with a primary emphasis on policy and institutions, rather than on expenditure programs and projects.
Objectives of NITI Aayog
The NITI Aayog has the following objectives:
- To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of states.
- To foster co-operative federalism through structured support initiatives and mechanisms with the states on a continuous basis, recognizing that strong states make a strong nation.
- To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.
- To pay special attention to the sections of our society that may be at risk of not benefiting adequately from economic progress.
- To design strategic and long term policy frameworks and initiatives, and monitor their progress and their efficacy.
- To actively monitor and evaluate the implementation of programs and initiatives, including the identification of the needed resources to strengthen the probability of success and scope of delivery.
- To focus on technology up gradation and capacity building for implementation of programs and initiatives.
- To undertake other activities as may be necessary in order to further the national development agenda, and the objectives mentioned above.
- The overall efficacy of the NITI Aayog will depend crucially on the quality of experts selected as members, and also the promotion by the PM.
- The NITI Aayog, unlike the Planning Commission, is not a constitutional body. It is not accountable to the Parliament. It has not been set up through legislation.
- While doing away with the Five-Year Plans, the new body should focus on the micro-economics of specific sectors. The lack of information on this count has led to industry over-reaching itself in sectors such as coal, power, roads and aviation, and banks making wrong judgement calls. Resource allocation is an important function which calls for the Aayog’s attention.
- NITI Aayog has been envisaged to function only as a think-tank of the government. In reality, however, it will operate as a political entity of the ruling dispensation. The lack of constitutional legitimacy, the absence of an accountability structure and the inherent political nature of the Aayog may impede its functioning.
- There is no clarity or indication about how the objectives will be achieved and the nature of the institutional mechanisms necessary in order to achieve the goals.
Efficacy of NITI Aayog
The end of the Planning Commission and the beginning of the NITI Aayog mark the beginning of the second generation of reforms. It is a step in the right direction. It would be premature to talk of its efficacy at this stage. We should wait for the idea and the organization to mature. PM’s support, quality of members, cooperative spirit between center and states are all vital issues.