NITI Aayog: An Alternative of Planning Commission

NITI (National Institute for Transforming India) Aayog came in the year 2015. It came into existence under NDA (National Democratic Alliance) government. NITI Aayog replaced the earlier Planning Commission. Since, it’s existence NITI Aayog has taken some important decisions for the development of our country

In this article we’ll understand the relevance of NITI Aayog, What’s the structure of it, and How it functions? Apart from this we will also try to understand the difference between NITI Aayog and Planning Commission. After understanding it’s background we’ll also look at the concerns related to it.

NITI Aayog in Place of Planning Commission

Background of NITI Aayog


Planning Commission was set up in 1950 under Prime Minister Jawaharlal Nehru. It was the highest agency in India to direct investment activity in a country. Planning Commission had two two important functions:

  • Implement five year plan : First five year plan was implemented between 1951-1956. After that total 13 five year plans came into existence. Programs under these FYP are centralized and integrated national economic programs. Some of the important programs were focused on Agriculture, Farmers, industries and banking & finance.
  • Provide Finances to State : Apart from FYP, Planning Commission was also responsible for financial distribution among states.

Planning Commission was not able to capture the changing realities of macro-economic management at national level. And also they were forced to implement every kind of plan within 5 years irrespective of the nature of the plan. So, the vision of long term development was missing in FYP. Also, some planning were meant to be short term.


So, in response to tackle above listed problems NITI Aayog was constituted as a think tank and advisory body to the government. Their main work is to understand the problems as region specific to avoid one-size-fits-all approach.

Structure of NITI Aayog

  • NITI Aayog is headed by the Prime Minister Narendra Modi with a Vice-Chairman and a CEO. Currently economist Rajiv Kumar is the Vice-Chairman of NITI Aayog. And IAS officer Amitabh Kant is the CEO of the Aayog.
  • Apart from them NITI Aayog also have some unspecified full time members.
  • It’s governing council consists of all Chief Ministers and Lt. Governors.
  • Regional Councils also consist of above members to address specific issue and contingencies impacting more than one state or a region.
  • Up to two part-time members from leading Universities and research organisation can be the part of this institute.
  • Four Union Ministers as ex-officio members also join this eminent institute. Recently Home Minister Amit Shah appointed as ex-officio member.
  • Experts, specialists and practitioners with relevant domain knowledge as special invitees.

Main Objective and Functions

The main objective of the NITI Aayog is to evolve a shared vision of national development priorities, sections and strategies with the active involvement of states in the light of national objectives. And to achieve this objective they :

  • Seek to provide a critical directional and strategic input into the governance process. It can only direct as NITI Aayog doesn’t have any financial autonomy.
  • Develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher level of government.
  • To ensure, on areas that are specifically referred to it, that the interests of national security are incorporated in economic strategy and policy.
  • Pay special attention to the sections of the society that may be at risk of not benefiting adequately from economic progress.

Relevance of NITI Aayog

NITI Aayog changed the working pattern of government. Abolition of Five year plan created an alternative system with Three, Eight and Fifteen years plans came for proper implementation with long term vision. These steps will form :

  • Competitive Federalism among States: Various reports released by NITI Aayog like Healthy States Progressive India, SDG Index and Social Sector Indices, which give performance-based rankings of states across various verticals. It helps to identify best states and then other states can follow it to achieve the best.
  • Cooperative Federalism among States: As composition of NITI Aayog consist of all the Chief Ministers and LG of States, so represent participation of all states. It also helps to address issues in a relatively shorter time and that too for region specific.
  • Greater Accountability to Citizens: It has also established a Development Monitoring and Evaluation Office which collects data on the performance of various Ministries on a real time basis with the help of Microsoft. The data are then used at the highest policy making levels to establish accountability and improve performance.
  • Acts as a Think Tank of innovative ideas: NITI Aayog consist of members from leading Universities and research organisation. They act like a think tank to generate new and innovative ideas come from possible sources.

Various Programs Launched by NITI Aayog

  • Measuring performance and ranking States on outcomes in critical sectors.
  • Sustainable Action for Transforming Human Capital (SATH)
  • Ek Bharat Shrestha Bharat
  • Development Support Service to States (DSSS) for Development of Infrastructure.
  • Public-Private Partnership in health.
  • Resolution of pending issues of States with Central Ministries.
  • Aspiration District Program (ADP) to realize the vision of Sabka Sath, Sabka Vikas, and ensure that India’s growth process remains inclusive.

Concerns And Conclusion

Although replacing planning commission with more robust NITI Aayog is a great idea. But idea without power to implement is nothing. That’s true in the case of NITI Aayog as they don’t have any financial autonomy and acts as only re-commendatory body.

They are also infamous for the uncritical praise of government projects. Which shows their bias nature towards private sector. Many states also accusing that NITI Aayog is not supporting states that much. As many schemes are still advocating a one-size-fits-all approach in administration.

So, tackle above problems Ayog must balance with finance commission to gain some financial autonomy. It should not remain just body that recommend only tax sharing formula in every five years. More funds will help in implementing the policies on timely manner.

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