The Planning Commission of India was replaced by NITI Aayog in 2015 to promote cooperative federalism, address the diverse needs of states, and transform India into a global competitive economy. Key differences include NITI Aayog functioning as a think tank rather than allocating funds, encouraging participation from states in policymaking, and focusing on evidence-based strategic policy frameworks. It aims to foster multi-directional policy flows between central and state governments to achieve equitable development through collaborative efforts.

1. Planning
Commission To
NITI Aayog
VAIBHAV

2. Introduction
At the time of independence of India, there was a large proportion of
impoverished people in the country. Poverty alleviation and
improvement of life standards of people were the major
considerations of the government. Indian economy needed a
direction, which was crippled by foreign subjugation. India was still a
geographic expression and a nation in making.
Other than the spirit of the freedom struggle, factors required for
binding the people were few. So the then politicians and think tanks
opted for a planned economy and a centralized planning body to
formulate a plan for socio-economic development. Thus, planning
commission came into existence in March 1950 through a cabinet
resolution which became a permanent body of experts.

3. About Planning Commission
•The Planning Commission of India was set up by a
Resolution of the Government of India in March
1950. Objectives of the government while starting
PC were the following:
•Promote a rapid rise in the standard of living of the
people by efficient exploitation of the resources of the
country.
•Increase production.
•Offer opportunities to all for employment in the
service of the community.

4. Planning Commission of India (PC)
•Prime minister was the ex officio chairman of the
planning commission assisted by a deputy chairman. It
included 6 union cabinet ministers as its ex officio
members. There was also a member secretary.
•The planning commission was an autonomous body,
which worked closely with union and state cabinets
and had full knowledge of their policies. Institutionally
it was a part of the cabinet organization and the
‘demands for grants’ for the PC was included in the
budget for the cabinet secretariat.

5. Functions and Responsibilities of the Planning Commission
•Make assessment of all resources of the country
•Augment deficient resources
•Formulate plans [Five Year Plans (FYP)] for the most effective
and balanced utilization of resources and determining
priorities.
•Determine the stages of plan implementation
•Determine the nature of machinery required.
•Indicate the factors which tend to retard economic
developments.
•Monitor and evaluate.

6. Evolution of Indian Planning
• The first Five-year Plan was launched in 1951 and two
subsequent five-year plans were formulated till 1965, when
there was a break because of the Indo-Pakistan Conflict. Two
successive years of drought, devaluation of the currency, a
general rise in prices and erosion of resources disrupted the
planning process and after three Annual Plans between 1966
and 1969, the fourth Five-year plan was started in 1969.
• The Eighth Plan could not take off in 1990 due to the fast
changing political situation at the Centre and the years 1990-91
and 1991-92 were treated as Annual Plans. The Eighth Plan was
finally launched in 1992 after the initiation of structural
adjustment policies.

7. Planning Commission: Positives and Achievements
• PC laid emphasis on infrastructure developments and capacity building. As a
result, huge investments were made in education, energy, industry, railways and
irrigation.
• India became self-sufficient in agriculture and made great progress in capital
sector goods and consumer sector goods.
• PC introduced many remarkable concepts like nationalisation, green revolution
etc and transformed itself to align with new concepts like liberalisation,
privatisation and inclusion.
• Planning commission made great emphasis on social justice, governance,
employment generation, poverty alleviation, health and skill development.
• The transformation of India from a poor to an emerging economic power is
credited to the orderly and phased manner in which planning was
implemented.

8. Planning Commission: Negatives and Problems
• No structural mechanism for regular engagement with states.
• Ineffective forum for the resolution of centre-state and inter-ministerial
issues.
• Inadequate capacity expertise and domain knowledge; weak networks
with think tanks and lack of access to expertise outside government.
• Failed to implement land reforms.
• It was a toothless body, was not able to make union/states/UTs
answerable for not achieving the targets.
• Designed plans with ‘one size fit for all’ approach. Hence, many plans
failed to show tangible results.
• Weak implementation, monitoring and evaluation.

9. Why does India need a change from PC?
• The contemporary world is governed by constitutional ethos like federalism
rather than centralization.
• India's population has almost tripled to 121 Cr, and many of the Indian states are
as big as European nations.
• Indian economy has expanded from a GDP of 10,000 crore to 2.87 lakh crores
USD – ie. from a poor nation to one of the largest economies. India ranks 3rd in
GDP at purchasing power parity, has surpassed Japan and is now standing just
below the US and China. The new economy needs institutions which can take
India forward in a global competitive environment.
• Co-operative federalism and fiscal federalism will help to meet the diverse needs
of different states/UTs in which planning commission had failed drastically. Plans
have to be formulated by fulfilling the aspirations of states by tailoring the plans
to suit their needs and requirements.

10. •The share of agriculture in GDP has been drastically
decreasing while the share of the service sector to GDP is
increasing in India. From 1991, as our economy is liberalised,
private firms have been playing a major role in the economy.
Today we are living in a globalised world connected by modern
transport, media, communications and networked
international institutions and markets. With the increasing
levels of development, the aspirations of people have soared
from survival to safety and surplus. So governance systems
need to be transformed to keep up with the same.
•Change in the economic scenario where the government is
supposed to be an enabler rather than a player or provider of
first and last.

11. National Institution for Transforming India
Government of India has replaced the old planning
commission started in 1950 with a new institution
called NITI Aayog on 1 January 2015. It works
under the chairmanship of Prime Minister. NITI
Aayog (National Institution for Transforming India)
will seek to provide a critical directional and
strategic input into the development process. It
focuses on co-operative federalism.

12. What’s new with NITI Aayog?
• The centre-to-state one-way flow of policy, that was the hallmark of the
Planning Commission era, is now sought to be replaced by a genuine and
continuing partnership of states.
• NITI Aayog = more a “think tank” than a finance distributing agency.
• NITI Aayog will provide Governments at the central and state levels with
relevant strategic and technical advice across the spectrum of key elements of
the policy.
• With NITI Aayog, there will be multi-directional flow of policy (from Center to
States, from States to Center, between ministries etc.)
• Better inter-ministry coordination.
• The NITI Aayog will develop mechanisms to formulate credible plans to the
village level and aggregate these progressively at higher levels of government.
• The NITI Aayog will create a knowledge, innovation and entrepreneurial
support system through a collaborative community of national and
international experts.

13. Objectives of NITI Aayog
• The active participation of States in the light of national objectives and to
provide a framework ‘national agenda’.
• To promote cooperative federalism through well-ordered support initiatives
and mechanisms with the States on an uninterrupted basis.
• To construct methods to formulate a reliable strategy at the village level and
aggregate these gradually at higher levels of government.
• An economic policy that incorporates national security interests.
• To pay special consideration to the sections of the society that may be at risk
of not profiting satisfactorily from economic progress.
• To propose strategic and long-term policy and programme frameworks and
initiatives, and review their progress and their effectiveness.
• To grant advice and encourage partnerships between important stakeholders
and national-international Think Tanks, as well as educational and policy
research institutions.

14. • To generate knowledge, innovation, and entrepreneurial support system
through a shared community of national and international experts, etc.
• To provide a platform for resolution of inter-sectoral and inter-departmental
issues to speed up the accomplishment of the progressive agenda.
• To preserve a state-of-the-art Resource Centre, be a repository of research on
good governance and best practices in sustainable and equitable development
as well as help their distribution to participants.
• To effectively screen and assess the implementation of programmes and
initiatives, including the identification of the needed resources to strengthen
the likelihood of success.
• To pay attention to technology improvement and capacity building for the
discharge of programs and initiatives.
• To undertake other necessary activities to the implementation of the national
development agenda, and the objectives.

15. 7 pillars of effective governance envisaged by NITI Aayog
• Pro-people: it fulfils the aspirations of society as well as individuals
• Pro-activity: in anticipation of and response to citizen needs
• Participation: involvement of the citizenry
• Empowering: Empowering, especially women in all aspects
• Inclusion of all: inclusion of all people irrespective of caste, creed,
and gender
• Equality: Providing equal opportunity to all especially for youth
• Transparency: Making the government visible and responsive

16. NITI Aayog Composition
• Prime Minister of India is the Chairperson
• Governing Council consists of the Chief Ministers of all the States and Lt. Governors of Union Territories
in India.
• Regional Councils will be created to address particular issues and possibilities affecting more than one
state. These will be formed for a fixed term. It will be summoned by the Prime Minister. It will consist of
the Chief Ministers of States and Lt. Governors of Union Territories. These will be chaired by the
Chairperson of the NITI Aayog or his nominee.
• Special invitees: Eminent experts, specialists with relevant domain knowledge, which will be nominated
by the Prime Minister.
• The full-time organizational framework will include, in addition to the Prime Minister as the
Chairperson:
1. Vice-Chairperson (appointed by the Prime Minister)
2. Members:
1. Full-time
2. Part-time members: Maximum of 2 members from foremost universities, leading research organizations, and
other innovative organizations in an ex-officio capacity. Part-time members will be on a rotational basis.
3. Ex Officio members: Maximum of 4 members of the Council of Ministers which is
to be nominated by the Prime Minister.
4. Chief Executive Officer: CEO will be appointed by the Prime Minister for a fixed
tenure. He will be in the rank of Secretary to the Government of India.

17. NITI Aayog specialized Wings
• Research Wing – that will develop in-house sectoral expertise as a
dedicated think tank of top domain experts, specialists and scholars.
• Consultancy Wing – that will provide a marketplace of whetted
panels of expertise and funding for Central and State Governments
to tap into; matching their requirements with solution providers,
public and private, national and international. By playing
matchmaker instead of providing the entire service itself, NITI Aayog
will be able to focus its resources on priority matters, providing
guidance and an overall quality check to the rest.
• Team India Wing – comprising representatives from every State and
Ministry, will serve as a permanent platform for national
collaboration.

18. Niti Aayog – Achievements
• Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme in
India – It is a collaborative research project between Niti Aayog and the United
Nations’ Food and Agriculture Organization (FAO).
• It aims to monitor, analyse and reform food and agricultural policies.
• The first phase of the MAFAP programme ran between 23rd September and 31 December
2019.
• National Agriculture Price Policy and National Food Security Policy for selected agricultural
product marketing committees and districts respectively were reported.
• The second phase of the MAFAP programme is scheduled between 1st January 2020 and
31st December 2021.
• The Niti Aayog governing council promoted Zero Budget Natural Farming.
• Additionally, natural farming is being promoted as ‘Bhartiya Prakritik Krishi
Paddhati’ programme under Paramparagat Krishi Vikas Yojana (PKVY).
• Village Storage Scheme has been conceptualised. Similarly, Union Budget
2021 has proposed Dhaanya Lakshmi Village Storage Scheme, yet to be
implemented.

20. Niti Aayog: Criticism
• Like planning commission, it’s also a non-constitutional body which is
not responsible to parliament.
• Dismantled planning commission without consulting the states.
• UTs are represented by Lieutenant Governors, not by chief ministers.
This is against the principles of federalism.
• Fund allocation to welfare schemes may get affected. For example,
there is a 20 % reduction in gender budgeting.

21. Conclusion
NITI Aayog will function in close cooperation, consultation and
coordination with the Ministries of the Central Government and
State governments. While it will make recommendations to the
Central and State Governments, the responsibility for taking and
implementing decisions will rest with them. NITI Aayog will seek
to facilitate and empower the critical requirement of good
governance – which is people-centric, participative, collaborative,
transparent and policy-driven. It will provide critical directional
and strategic input to the development process, focussing on
deliverables and outcomes. This, along with being as incubator
and disseminator of fresh thought and ideas for development,
will be the core mission of NITI Aayog.