From 1950 to 2014 India had a centralized institute for planning and policy formulation known as the Planning Commission. It was scrapped in 2014 and 2015 which ultimately saw the birth of NITI Aayog. While NITI Aayog was formed as a successor of the Planning Commission, it is extremely imperative to understand that they are not the same. There are many differences between the two bodies. In this article I have attempted to highlight the same to give the reader a better understanding about the two bodies.

Planning commission in India was formulated for achieving the goals of the infamous Five-Year Plans (FYP’s) and highlighted the policies and programs that were to be implemented by the centre and state for achieving overall development. The Planning Commission had developed 12 FYP’s for India and used to function under the guidance of the National Development Council (NDC). The planning commission functioned in a way that it used to first develop the policies and then consult the states regarding the allocation of funds. Even though there was consultation, but ultimately the power to allocate the funds to the states and ministries was always in the hand of the Planning Commission. The National Development Council represented and comprised of states and union territories to which the Planning Commission had to report. While formulating policies, they always followed the Top down approach by looking at the perspective of the nation as a whole and then trickling it down to the respective states.

NITI Aayog on the other hand had a changed objective to indicative policy formulation and developing the National Development Agenda. It highlighted the policy initiatives for the union and state governments to work upon. It did not develop any FYP’s and was governed by a governing council than by the NDC. NITI Aayog was developed for being a think tank for the government. It chose to consult the states at the stage of policy formulation rather than waiting till the time of allocation of funds and then developed the indicative policies and plans accordingly. The Governing council (to which the NITI Aayog had to report) comprised of states and central government and all the stakeholders including like NITI Aayog experts, Union government and state governments representatives to participate in the meeting with equal say. One interesting thing is that NITI Aayog does not possess any power to allocate funds to the states and ministries and follows the bottom up model as opposed to the centralized one followed by the Planning Commission. NITI Aayog aims to enable India to face the complex challenges ahead in a better manner through redressal of gender inequalities, safekeeping of environmental assets, elimination of poverty and skill development.

There has been a paradigm shift in the policy formulation after the coming of NITI Aayog. Now the policies cater to the states individually since these states are also a part of the policy making and not just consulted for the allocation of funds. They focus more on consensus building which is the key to implementation of any policy or plan. Earlier the power of allocation of funds rested with the Planning commission and many people felt that the central government was using this money only for the development of those few states in which it was holding power. Now this power has shifted to the Ministry of Finance ensuring that there is no biasness in the allocation of funds and NITI Aayog is responsible only for making of new pathways and ideas for the implementation of plans.

Planning Commission was not able to keep up with the spirit of co-operative federalism (meaning that the constitution should focus on both union and states and there should be an attempt to bind all the units into one), whereas NITI Aayog was made with the vision of co-operative federalism fostering the fact that stronger states make for stronger nations. Moreover, NITI Aayog has come up with the strategy of competitive federalism in which it rewards states on the basis of their performance in various areas. They have established indexes like Health Index (HI), School Education Quality Index (SEQI) and Composite Water Management Index (CWMI) for the same. This promotes competition between states and motivates them to improve themselves.

The Planning Commission was constantly criticized for following the policy of ‘one size fits all. ‘They used to make plans that applied to all the states uniformly without paying heed to state specific requirements. For example, Kerala already has 100% literacy and Bihar is around 60% but the plans for education is being made same for both. This planning does not make any sense and only leads to waste of resources and manpower. NITI Aayog on the other hand has separate allocation of funds and government support for the different states which fulfils the individual development of states.

The Planning Commission had various flaws and complexities which were reported by the scholars in time and because of that we now have an institution that can deal with many of the socio-economic problems of the nation. With a competent chairman NITI Aayog would be able to grow more powerful over the years to come and would hopefully strive towards their vision.

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