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NITI Aayog

NITI Aayog or National Institution for Transforming India Aayog is a policy think-tank of UnionGovernmentofIndia that replaces PlanningCommissionofIndia and aims to involve the states in economic policy-making in India. It will be providing strategic and technical advice to the central and the state governments. Prime Minister of India heads the Aayog as its chairperson.

NITI Ayog to enhance seven pillars of democracy


Union Government of India had announced formation of NITI Aayog on 1 January 2015.
There are couples of things to be considered here.
In Hindi, NITI (Hindi: नीति) means Policy,
And Ayog(Hindi: आयोग) means Commission.
NITI Aayog would therefore mean:

  • A group of people with authority entrusted by the government to formulate/regulate policies concerning transforming India.
  • It is a commission to help government in social and economic issues.
  • Also it's an Institute of think tank with experts in it.

Members

PM Narendra Modi with CMs of Indian states after the consultation meeting on replacing the Planning Commission.

The NITI Aayog comprises the following:


  • Prime Minister of India as the Chairperson.
  • Governing Council comprising the Chief Ministers of all the States and LieutenantGovernors 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.
  • Full-time organizational framework (in addition to Prime Minister as the Chairperson) comprising.
  • Vice-Chairperson: Arvind Panagariya
  • Members: Two (2) Full-time
  • Part-time members: Maximum of two 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 four 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
  • Secretariat as deemed necessary

NitiAayog vs Planning Commission



Now the union government wants all the three expenditures to be decided by the Finance commission itself.

Then Why NITI Ayog ?

One of the key functions for NitiAayog could be to build the necessary trust and serve as a dynamic bridge between government and the private sector and also the respective States. The way, I see is that (nowhere an expert on the subject) NitiAayog will be a bridge between the PMO and various State Governments. All directions will emanate from the PMO (after consultation with various Central Ministries), which NitiAayog will decipher and accordingly plan communicate to the respective States per their potential and requirements. All states (including the Private Sector from the respective States) will constantly approach NitiAayog for guidance, development economics planning, economic aid (including aid and benefits to the economically poor of the respective states, etc) and their own agenda. The Think Tank NitiAayog will have the most challenging and interesting task to analyse the requirements of the respective States, political implications, pecking order, locational advantages/disadvantages, culture, managing expectation and then decide the “plan of action”. It is good that NitiAayog will not handle cash, grants and disbursements (that would have been a minefield) as it is left for the Ministry of Finance at the center. It is best that they have been able to rope in Prof. Arvind Panagariya, an able professional and global Economist to contribute to take India forward Ramesh Kumar Nanjundaiya Bangalore,

So what’s the big difference between the older Planning Commission and the newer NITI Aayog?

In the Planning Commission, there was just one central figure that practically controlled every aspect of the commission: the Deputy Chairman. It’s another matter whether it was the Deputy Chairman or the actual-powers-that-be (the ominous National Advisory Council in the ruinous UPA days, headed by Sonia Gandhi) who used the Deputy Chairman merely as a puppet to perpetuate their own policies. For instance in the UPA days it was never clear whether the Commission was working to boost the country’s economy or was trying to keep it as backward as possible.

To do away with the central authority and to make the Aayog more useful in terms of policy, direction and implementation, the Deputy Chairman has been replaced by a CEO and a Vice Chairperson (with a caveat that they’ll be appointed by the PM). Asian Development Bank’s Former Chief Economist Arvind Panagariya is being tipped to be the first Vice Chairperson.

Instead of control, the focus will be on being a catalyst and providing a platform for the States and the Centre to come together and discuss matters of economic policies and development plans. The planning will be orchestrated at the village level and an aggregation of these inputs shall be used to formulate national-level plans and policies. Even during the formation of the Aayog, Chief Ministers from all the States were invited to participate; it’s another matter that some Chief Ministers sent their representatives instead and CMs like MamataBannerjee simply refused to attend due to the ongoing acrimony with the Centre.

Aside from the CEO and the Vice-Chairman NitiAayog will have a governing council comprising of Chief Ministers and Lieutenant Governors. They will also be for Union Ministers serving as ex-officio members. There will be full time members and part-time members. People will also be drawn from regional councils and experts and specialists from varied fields will also be a part of NitiAayog, mostly as special invitees nominated by the Prime Minister. The Aayog will also have 2 part-time members from leading universities and research organizations.

While the government feels that it is a totally new approach, different from the Planning Commission that has overseen 12 five-year plans and sundry other plans involving more than Rs. 200 lakh crores in its 65-year-old history, the detractors are saying that nothing much has been changed. For instance, the structure is almost the same with a few changes here and there. Even in the old Planning Commission experts were invited based on various needs. Earlier the Commission was reporting to the National Development Council consisting of State Chief Ministers and Lieutenant Governors and this has been replaced by a governing council which, again, comprises of State Chief Ministers and Lieutenant Governors. Even the regional councils are the same, according to Kriti Parikh, a former member of the Planning Commission.

The big difference is, as mentioned above, the States will now have a greater say. Previously it was the Planning Commission that formulated plans and then asked the States to implement them (provided they agreed), this time the States themselves will be able to actively participate in the planning so that there is no communication gap and the plans can be implemented effectively. Prime Minister Narendra Modi, being a big advocate of federalism, believes that decentralisation can play a big role in facilitating a balanced growth and making every individual State an important stakeholder, instead of the Centre acting like a big brother handing over goodies. Regional councils will be formed to address specific issues particular to those areas impacting the local populations. Issues of national security that were ignored so far, will be incorporated at various levels of economic strategy and policy. All the necessary technological upgrades will be implemented and the functioning of the Aayog will be brought at par with any world-class organisation involved in nation building.

Special stress will be put on the benefit of those marginalised sections of the society that have been ignored due to the template-nature of the Planning Commission so far.

Whatever the detractors may say – considering that their interests don’t lie in the big and small changes happening in the way the economy and the government function – there is a paradigm shift in the way the policy formulation and implementation are being worked out. Instead of being the last resort, as rightly put by the official statement, the government should act as an enabler.

Right now there is too much control. This control isn’t going to go away immediately – after all it has been there for the past 65 years and immediately yanking it out may collapse the administrative infrastructure – but it will go away gradually and NitiAayog could be the first, albeit, small change.

When the central authority is minimized, the Aayog will be allowed to function in a more flexible manner, involving 2 types of changes – planned changes and changes influenced by the indigenous as well as global markets. Since the policy decisions will be made from the bottom of the pyramid and then move upwards, they will be more realistic and human-centered rather than something being prepared from an ivory tower. Remember how the Planning Commission thought if a family could afford to spend Rs. 22 a day it was above the poverty line? Only individuals totally detached from the realities of the world could come with such numbers. Such bizarre policy decisions can be avoided if decisions are made from the bottom-up.


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