Viewing NITI aayog through economic prism along with its deviation from structure and functions of earlier planning commission. what are the challenges ahead?

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Credit Seminar
SPEAKER:
SHEELA KHARKWAL
2
NITI AAYOG: AN OLD WINEIN NEW BOTTLE?NITI AAYOG: AN OLD
WINE IN NEW BOTTLE?

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• Introduction
•Timeline of Planning in India and A brief overview of the Five Year
Plans
•Planning Commission: Criticism/Anti-Arguments
•NITI Aayog and its Organizational set-up
•Structural comparison between planning commission and NITI Aayog
•Objectives and functions of NITI Aayog
•Functional comparison between planning commission and NITI Aayog
•A look on NITI Aayog through “Economic Prism”
•Niti Aayog: Criticism/Anti-Arguments and Challenges ahead
•Conclusion
contents

4. Introduction
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“Constant development is the law of life, and a man who always
tries to maintain his dogmas in order to appear consistent drives
himself into a false position”. -Mahatma Gandhi

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Timeline of Planning
in India

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A Brief Overview of
Five Year Plans

9. Planning Commission’s responsibilities:
 Periodic assessment of all the resources.
 Augmenting deficient resources.
 Formulating plans for efficient, judicious
and balanced utilization of resources.
 Appraisal and evaluation of programmes.
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So far 11 FYP’s have been completed. 12th FYP
is under implementation since Apr 1, 2012 and
will continue till March 31, 2017.

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I II III IV V VI VII VIII IX X
2.1
4.5
5.6 5.7
4.4
5.2 5
5.6
6.5
8
3.6
4.3
2.8
3.3
4.8
5.7
6
6.8
5.4
7.6
GROWTH RATE (% of GDP)
Target achieved
Source: Planning Commission of India

11. Economy
Demography
Globalisation
Privatisation
Technology

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Planning Commission:
Criticism/Anti-Arguments

14.  >9% GDP, during 2005-07 THANKS
American boom prior
to sub-prime crisis
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Planning
Commission
Almost all
nations of
world
experienced
high growth.

15. Inflation
Inflation rose nonstop during the 11th FYP.
Infla

16.  planning commission brags reducing
poverty line on Tendulkar’s parameters.
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27 crore People
below poverty
Line
37 crore
people BPL.

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18.  PC: Extra-Constitutional and
Non-Statutory body
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Constitution Planning
Commission

19.  PC: one size fits all
and
we know best
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20.  States unenthusiastic of central
schemes :NO direct funding to states
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Funds
from
centre
NGO’s and
DRDA’s
States

21. PC Office manned by Generalist IAS/IES
with short tenure
panel members filled with academicians and
nonperforming NGO’s.
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 Need of subject specialists
with International exposure
like Mr. Raghuram Rajan

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 PC: An agent of the ruling party or
coalition at the centre.
Other
states
From
the
center

23.  Government needs to become an
“enabler” rather than a “dictator”.
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24. • NITI stands for National
Institution for
Transforming India.
• NITI = Policy
Aayog = Commission
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25. Structure of NITI
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26. Governing
council
Regional
councils
Full time
members
Part time
members
Ex-officio
members councils
Special
invities
Chairperson
(Prime Minister)
Vice Chairperson
(Nominated by PM)
Chief executive officer
(Nominated by PM)
(Max 2, from
relevant
institutions)
(Max 4,
from union
ministries)
(Nominated
by PM)
Compostion of NITI Aayog

27. Structural comparison
between NITI Aayog and PC
Position Planning Commission NITI Aayog
Born 1950, March 15th 2015, January 1st
Chairman Prime minister Prime minister
Vice
Chairman
Cabinet Minister rank Again Cabinet Minister rank
CEO
(secretary
in PC)
Member-Secretary (IAS)
A secretary level bureaucrat with
fixed tenure.
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28. Position
Planning
Commission
NITI Aayog
Ex-officio
members
 Finance Minister
 Planning
minister
PM can nominate four-Union ministers. At
present:
1. Home 3. Finance
2. Railway 4.Agriculture
Full time
members
8 full time members,
who enjoyed “Minister
of State” rank.
Less members
At present only 2.
Rank: Same
Special Invitees
Union ministers for
1. Transport 2.HRD 3.Social Justice
+PM can invite other experts as and when
needed.
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29. Position
Planning
Commission
NITI Aayog
part-time members
Tech experts from research
institutes. Rotational posts.
Governing Council
 Chairman: Prime minister
 Chief ministers of all states
 Lieutenant governors of all
Union territories.
Ad hoc Regional
Councils
Will have CMs of states that fall
in the region.
To deal specific issue concerning
a group of states for example
irrigation, naxal-problem,
infrastructure etc.
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31. Mandate of NITI
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32. To foster cooperative federalism
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Objectives and functions

33.  To serve as a Think tank, a
directional and policy dynamo for the
government.
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Ideas“How”
more imp
than
“what”

34.  Bottom up approach: in plan
formulation
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35. To solve issues and impediments of state in
time bound manner at the level of state
itself.
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36. To recommend a national agenda including
strategic and technical advice on elements
of policy and economic matters.
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To create a knowledge,
innovation and
entrepreneurial support.

37.  To design strategic and long term policy and
programme frameworks and initiatives, and monitor
their progress and their efficacy.
 To focus on technology up gradation and capacity
building for implementation of programmes and
initiatives.
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38.  To pay special attention to the sections of our
society that may be at risk of not benefitting
adequately from economic progress.
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39.  Functional comparison :
Planning Commission Vs NITI
Aayog
Planning commission NITI Aayog
function Design FYP-Five year plans. Design national agenda and
cooperative federalism.
Mostly work as a “policy-
formulation-hub”.
Money
Matters
Decide two “money” matters:
1. How much money to give to each
state for centrally sponsored
schemes (CSS)
1. How much money to give for each
state’s own state-five-year-
plans.
The Press release is ‘silent’ on
money/funding. so, most probably
it’ll be left to finance ministry.
.
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40. Planning Commission NITI Aayog
States
Role
States/UT were represented in
National Development
Council.
PC framed FYP=>went to
Cabinet=>NDC approved
FYP=>Tabled in parliament.
States/UT represented in Governing
council.
No specific mention about whether they
can approve/reject/amend Niti Aayog’s
proposals!
Approach One size fits all, top-down
socialist planning.
Press release talks about participatory
planning
But how exactly will they do that? No
specific details laid out.
Given the entry of Free market
economists and Technocrats, most
probably it’ll be an ‘indicative planning’
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41. 0
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A look on
NITI Aayog
through

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NITI
Aayog
resource
transfer

43. Fiscal federalism?
• Economistssceptical about centralized bureau of planning.
• Since 8th FYP role of private sector ed, Need for
Indicative type of planning
• Govt. focus Broad issues rather than fixing targets.
• Biggest drawback States Receiving end with
begging bowl rather than partners and Tied Funds
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44. Resource transfer
• At present Govt. is silent in this matter
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• 60% Resource transfer takes place through
Finance Commission
•Only 2-3% through Planning Commission
•Additional responsibility can easily be
shifted to Finance commssion
Some experts believe Inter-state council will
decide money allocation to states, then
finance ministry will release the fund.

45. Planned and Non-plan expenditure
• A Big issue since long
• Report of the panel headed by Dr. C. Rangrajan:
Distortions crept in by this Illogical distinction
• Setting up of NITI, changes entire way is an
important question??
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46. • Who decides Special category status of
states??
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Niti Aayog:
Criticism/Anti-Arguments

48. NITI Aayog is long on generalities and
short on specifics.
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LOCKED!!!!!
NITI Aayog coverage

49. Opposition views NITI Aayog :a ‘gimmickry’ and ‘an
old wine in new bottle.’
NITI Aayog, like Planning Commission, is a non-
Constitutional body.
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50. • Planning commission used to
monitor of human development in
the States, Sub-plans for women, SC
and ST.
Niti Aayog doesn’t say
how they’ll do it???
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ZIPPED

51.  Mr. Modi’s “arbitrary decision” to dismantle the Planning
Commission, without taking NDC or states into
confidence this undermines cooperative federalism.
(Kerala CM)
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Challenges ahead

53. • Quality of experts entertained would be the determining factor of the
value of Think tank.
• For achieving the goal of Cooperative federalism, the new governing
council has to be more active. Feasibility of convening meetings
with all chief Ministers and LT’s (Governing council of NITI Aayog) in
one place at regular interval?
• Few questions with reference to the functioning of new structure need to
be answered thoroughly, like who would
 Lobby with the finance ministry to protect plan expenditure,
 Determine transfers to centrally sponsored scheme, and
 Assign special category status of states in the absence of
planning commission?
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At least 100 IAS/IES
officers will now have to be
accommodated in other
ministries.
 How they’ll be integrated in
the new system?? No clear
answers given in the press-
release.

55.  Sudden dismantling ‘unplanned’ economy in
which the corporate will call the shots
spur privatization.
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Conclusions

57. • This replacement : second generation
reforms
• Decision: bold and long overdue initiative..
• There is no point in quarreling with the
name.
• The substance behind the change matters.
• Therefore clarity is needed in many
aspects. Once answers to these emerge, then
the new body could function smoothly.
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58. To change the emphasis
• from the projects and programs to policy Institutions,
• from expenditure inputs to real outcomes through
better governance and,
• from political disputation over Incremental allocations
to new challenges and opportunities in a global
environment.
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Expectations

59. • Structural differences are not much but inclusion of
CM’s and Lt. Governors in the council a break with the past.
• Though there may be some Political influence, but it is
much too early to declare it as Old Wine In New
Bottle.
• A fair chance should be given to prove that the government
initiatives will deliver.
• The Aayog’s functioning could make or break the economic
development of India in the future.
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