NITI Aayog, established in 2015, marks a paradigm shift in India’s approach to economic planning and policy formulation, distinguishing itself markedly from the erstwhile Planning Commission. The Planning Commission, an institution with a centralized and top-down approach, was dissolved to make way for NITI Aayog, reflecting a shift towards a more decentralized and participatory model of governance. Unlike the Planning Commission, which operated on a five-year plan model, NITI Aayog adopts a more flexible, long-term vision, emphasizing cooperative federalism and fostering collaboration between the central and state governments. This departure from the rigid planning approach allows for greater adaptability to dynamic economic scenarios.
Furthermore, the principles guiding NITI Aayog underscore innovation, entrepreneurship, and a focus on technology-driven solutions, diverging from the Planning Commission’s conventional focus on resource allocation and sectoral targets. NITI Aayog emphasizes outcome-based monitoring and evaluation, promoting a results-oriented approach over the rigid adherence to planned targets. The institution also encourages the active involvement of stakeholders from various sectors, including industry, academia, and civil society, fostering a more inclusive and holistic decision-making process.
In essence, NITI Aayog reflects a departure from the traditional planning framework, embracing a more collaborative, adaptable, and forward-looking approach to address the complexities of India’s contemporary economic landscape. Through its emphasis on cooperative federalism, flexibility, and inclusivity, NITI Aayog aims to catalyze sustainable development and economic growth while aligning with the evolving needs and aspirations of a diverse nation.
Tag: Indian economy and issues related to planning, mobilization of resources, growth development and employment.
Decoding the Question:
- In the Intro, write in brief about the Planning Commission and NITI Ayog.
- In Body, compare how principles followed by NITI Ayog is different from erstwhile planning commission.
- Conclude by mentioning what is expected from this transition.
Answer:
The National Institution for Transforming India, NITI Aayog, was established by executive resolution in 2015. NITI Aayog was constituted to bring changes in the Indian planning process. The Planning commission was suffering from certain issues and experts thought that organizational and structural changes in the Planning Commission were needed.
NITI Aayog is philosophically different from the former Planning Commission because NITI Aayog aims to carry forward the transformation to New India. NITI Aayog will be guided by an overall vision of development which is inclusive, equitable and sustainable. The seven guiding principles for the NITI Aayog are:
- Pro-People: NITI Aayog has followed bottom up approach in policy formulation unlike Planning Commission which followed top down approach.
- Pro-Activity:. NITI Aayog is working on the principle of pro-activity, where the problems faced by people are picked up and solutions are worked out.
- Participation: NITI Aayog while formulating policies, includes participation not only of in-house members, union, and state ministers but it also includes domain experts from different fields.
- Empowering women: Policy formulation of NITI Aayog follows the principle of empowerment by inclusion of women in every aspect of decision making.
- Inclusion of All: The vision and policy formulation of NITI Aayog is based on inclusion of all focusing on SCs, STs, Minorities, Poor, Villages, and Agriculturists, etc.
- Equality: The programmes like Atal Innovation Mission, SETU, etc., are based on the principle of equality, providing opportunity to youth, and other sections of society.
- Transparency: NITI Aayog through its basic principle of inclusion, ‘more governance less government’, equality, participation and empowerment tries to make government visible, responsive, and sensitive to the needs and aspirations of the people.
Differences in principles between NITI and Planning commission are reflected as:
Changed Organizational Structure:
- NITI Ayog: It has a CEO with rank equivalent to secretary. He is directly appointed by the Prime Minister. Ayog also has the post of Vice Chairman. It also has 5 full time and 2 part time members, and 4 cabinet ministers will serve as ex-officio members.
- Planning Commission: It had a Deputy chairperson, A member secretary, full members. Secretaries and member secretaries were appointed by usual process.
Co-operative Federalism:
- Planning commission’s approach was top-down and one size fits all approach, which was not as very successful.
- NITI Aayog’s approach is completely different. Its approach is bottom up and formulate national developmental strategy in a market economy with an integrated global world. This approach of NITI is considered as the need of the hour. Since its inception NITI has been playing a key role integrating all key stakeholders in planning and implementation of the same.
Control over Finances:
- The role of the Planning Commission was very dominant when it comes to resource allocation. Due to this dominant role played by the commission, an extra constitutional body, It had made the Finance Commission, a constitutional body, lesser. This led to wide criticism of the government.
- NITI Ayog does not play any financial allocation role. Finance commission decides revenue distribution of states, funding to the central sector scheme and union assistance to central plan etc. with due consideration of recommendations of the Finance Commission.
Constitution and Reporting:
- Earlier the Planning Commission used to report to the National Development Council which consisted of Chief Ministers of all the states and lieutenant Governors of UT’s.
- NITI Ayog has a Governing Council which consists of the Prime Minister, Chief Minister, Lieutenant Governors etc.
Conclusion
NITI Ayog has targeted the Sustainable Development Goals India index to prepare good performing states on various criteria and rank them accordingly. This will create healthy and competitive federalism to achieve ultimate goal development which the earlier planning commission failed to bring to the planning process. With the coming of NITI Aayog, there has been a paradigm shift in the planning process as the principles followed by it have nurtured and supported Cooperative and Competitive Federalism in India.
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