The Government scrapped the planning commission on 1st January 2015 and replaced it with NITI Aayog.
The Planning commission was formed in the year 1950. NDA Government shut it down in the year 2015 and replaced it with NITI Aayog. The major arguments against the planning commission were:
- Planning Commission was a relic of a socialist era and not suited to the present market-oriented economy.
- There was not much participation of states in decision-making. Although Chief Ministers of all states were members of the National Development Council (an advisory body to planning commission), the body did not have much authority and met only once a year.
- It had a top-down approach to decision-making and formulated a ‘one size fits all’ kind of policies for the states. It did not take into account the diversity of the states.
- The Planning commission had become all-powerful with the power to impose policies and allocate funds to the states.
NITI Aayog was formed to replace the planning commission to address the above shortcomings.
- NITI stands for National Institution for Transforming India. Also, NITI means ‘policy’ in Sanskrit.
- NITI Aayog has been envisaged as a think tank that will provide both Central and State Governments with advice in policy-making. It has only an advisory role and has no power to impose policies on the states.
- It will foster co-operative federalism by ensuring greater participation of individual states in policy-making.
- It does not have the power of allocating funds to states. It will be done by the finance ministry.
- It has a bottom-up approach towards decision-making and allows local bodies to formulate their own policies which are later endorsed by the states.
- Prime Minister is the chairman of the NITI Aayog. So, Narendra Modi is the chairman. Arvind Panagriya has been appointed as the vice-chairman.
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Difference between Planning Commission and NITI Aayog
- The Governing Council of NITI Aayog has onboard Chief Ministers of all states and lieutenant governors of Union Territories. In planning commission, states’ role was limited only to the National Development Council.
- Unlike the Planning Commission, NITI Aayog has no power to impose policies.
- In the planning era, the Government’s role was to be a ‘provider of first and last resort’. But, in a market-oriented economy, the Government will play the role of an ‘enabler’.
- Planning Commission had become a highly politicized body with politicians as its members. NITI Aayog will also have technocrats as its members.
- Unlike planning commission, NITI Aayog has provision for part-time members.
This is the difference between the planning commission and NITI Aayog “on papers”. But, whether or not NITI Aayog will really be a break from the past or is it just new wine in an old bottle, is yet to be seen.
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