Aim of the NITI Aayog:

To foster involvement and participation in the economic policy-making process by state governments of India, a “bottom-up” approach in contrast to the Planning Commission’s tradition of “top-down” decision-making.

The NITI Aayog will comprise the following:

  • Prime Minister of India as the Chairperson
  • Governing Council comprising the Chief Ministers of all the States and Lt. Governors of Union Territories
  • Regional Councils will be formed to address specific issues and contingencies impacting more than one state or a region. These will be formed for a specified tenure. The Regional Councils will be convened by the Prime Minister and will comprise of the Chief Ministers of States and Lt. Governors of Union Territories in the region. These will be chaired by the Chairperson of the NITI Aayog or his nominee.
  • Experts, specialists and practitioners with relevant domain knowledge as special invitees nominated by the Prime Minister
The full-time organizational framework will comprise of:
  • The Prime Minister as the Chairperson
  • Vice-Chairperson: To be appointed by the Prime Minister
  • Members: Full-time
  • Part-time members: Maximum of 2 from leading universities research organizations and other relevant institutions in an ex-officio capacity. Part time members will be on a rotational basis.
  • Ex Officio members: Maximum of 4 members of the Union Council of Ministers to be nominated by the Prime Minister.
  • Chief Executive Officer : To be appointed by the Prime Minister for a fixed tenure, in the rank of Secretary to the Government of India.
Systemic maneuvers by the Union government towards centralization in the post 1967 period lead to political distortions and federal tensions. What features in the Indian polity strain the federal relations between center and states? How is the NITI AAYOG aimed to balance the wheel of fiscal federalism? Examine. (200 Words)
The Indian federalism model of ― indestructible union with destructible states necessarily has a unitary bias due to the background and circumstances under which India achieved independence. Hence in many cases the Centre appears to overwhelm the authorities and the realms of the states.
However, increasing centralization created tensions, more so because of  the emergence of regional parties and dilution in the one-party union or coalition politics. The strains in relations can be attributed to
  • Centralized planning without much involvement of states
  • Rigid allocation of revenue to states
  • No say in international treaties involving the resources of the states
  • No fiscal autonomy
  • Other features like creation of new states, development of backward regions etc.
The formation of the NITI Aayog appears to be a step in the right direction which will be able to ease the tensions in fiscal federalism . It is envisaged  to move from a ―one size fits all approach to “co-operative federalism”.

The following functions assigned to NITI Aayog which will help in fiscal federalism are :

  • Increased participation of states in planning process
  • Formation of regional councils to look after specific state issues
  • The governing council will include CMs of all states and LGs of UTs.
  • Will look after Monitoring and feedback. Midway course correction, if needed.
However, the source of real change will be changes in the way in which Central transfers are made to the States. This has to be done in ways that increase the flexibility and control of the States, but at the same time, increase their accountability. Simplicity, timeliness, transparency,  monitoring and evaluation of Centre State transfers-all need improvement.
Without these fundamental changes, new think tanks, or claims of cooperative federalism, will not make a difference to India‘s economic development
Do you think the new thrust on cooperative federalism in the functioning of newly constituted NITI Aayog will only slow down the pace of schemes and projects due to various demands by states, political differences and tensions between states and center? Critically comment. (200 Words)
The recently constituted NITI Aayog is seen as a remedy against the centralist attitude of the previous Planning Commission, which had no aspect of federalism in it, due to absence of representatives of states.
  • The body as a whole consists of various regional councils under it, which will undertake the process of formulations of policies, after assessing the needs of each region.
  • Due to this, there is a great possibility of conflict between different regions, in order to get more resources for their own states for more development, which can lead to more cumbersome procedures to be followed, as compared to the PC‘s methods.
  • But this will be far better in the long run, as PC‘s method was discretionary to some extent, which is unacceptable in a federal country.
  • It is better to allocate more time to planning in the initial processes, rather than facing the consequences of hastily formulated policies, which may play havoc with  the political, economic and social aspects of the country.
  • NITI Aayog provides a common platform to all states to voice their concerns, regarding their disputes with one another and with the centre government, and find a pragmatic solution through consensus, for the benefit of all.
So, even though it may take a far greater time to formulate policies or resolve disputes in the new body, there is assurance of benefits in the long run, due to the democratic procedure to be followed in the resolution of concerns of respective states.
Some argue that the newly formed NITI Aayog will in fact result in more centralization of power and will end even the small say states had in policy matters during the Planning Commission era. Do you agree with this assessment? Critically examine. (200 Words)

Abolishing Planning Commission and formation of NITI Aayog was seen both hope and despair. The reason of despair was, some believed it would lead to more centralization by:

  1. Being only a think-tank, resource allocation will be handled by finance ministry, where no say of states is present.
  2. Abolition of National Development Council- where plan document used to passed by consensus. The new aayog will only be a formal deliberative body.
  3. Due to immense discretion in fund allocation, small states, backward states, conflict ridden states or states ruled by parties other than central party may not get a fair deal.
But the repeated emphasis of the PM on decentralization and the outcome of first meeting of this body should put some of these concerns to rest., such as:
  1. Three sub-groups of CMs have been constituted to revamp CSS, for skill development and for Swachh Bharat.
  2. Discussion on reducing the number of CSS or even completely doing away with them.
  3. Special task forces in each state to alleviate poverty and funding infrastructure projects.
In addition to this centre has promised more funds to states based on the idea of competitive federalism. Thus the decentralization, promise for more fund allocation to states and assigning the CMs the duty of solving the issues of CSS, skill development etc. 
certainly generate hope. Continuance of this principle in future will help us realize ―cooperative federalism in spirit
Compare and contrast the composition and objectives of newly setup National Institution for Transforming India (NITI) Aayog with that of erstwhile Planning Commission. Some suggest that it is better to reform existing institutions than creating new ones to transform India. Comment on this suggestion. (200 Words)
The cabinet resolution similar to one that laid the foundation of PC in 1950 has led to the formation of National Institution for Transforming India (NITI) Aayog with the objective to evolve a shared vision of national developmental priorities, sectors and strategies.
It aims at developing the overall planning strategy with the “bottom up approach” compared with the “top down” approach followed by the PC.
The new think tank has a different structure than the PC in respect of the following:
  1. The Aayog will have a Vice-Chairperson to be appointed by PM instead of the Deputy Chairperson.
  2. The Aayog would have two levels of councils, governing councils of CM’s of the states and LG’s of UT’s. It would also have a regional council for issue specific objectives.
  3. The Aayog would also have experts from relevant institutions on a part time basis as compared to the eight full time members.
  4. The Union ministers have been retained as the ex-officio members as were in the PC.
  5. The Aayog would also have a CEO to be appointed for a fixed tenure in the rank of secretary.
  6. The Aayog might have a separate secretariat as the need arises.
  7. Subject experts, practitioners and others would also be nominated from time to time by the PM.
The need of the hour is to bring about a systemic change and not just a structural change. What is now required is a change in the culture of planning. The PC was conceived as a knowledge bank and think tank, which was supposed to act as a repository of the domain knowledge and specialised skills in different subject domains. But the focus shifted from functions like perspective planning, project policy analysis, program implementation to power centric functions like approval of schemes, resource outlay and the like.
This reflects the chronic malaise afflicting the planning commission. Hence it would sometimes become imperative to rebuild the institutions with fresh set of objectives and related support structure in place of re-structuring. But it is equally important that the Aayog learns from the practical experiences of the PC which has to a great extent been successful in carrying out its objectives in the past.
Recent Developments:
  • NITI Ayog is preparing 15 year vision plan

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top