Soon after the formation of government in May 2014, the new government announced its intent to introduce a new body to replace more than six decade old Planning Commission with a new commission to meet the new challenges of 21st century. The planning commission was a non-statutory and non-constitutional body devised to formulate five year plans for the country’s development with a trickle down approach or top to bottom approach. The new commission named as Niti (National Institute for Transforming India) Ayog is hailed by government as ushering the era of cooperative federalism and decentralization in development process.

 

 

The Planning Commission was established in 1950 to usher the process of planned development of the country. It was responsible for devising the five year plans which outlined the development path of the country and allocated resources to hit set economic targets. So far, it has made 12 five year plans out of which only four plans have achieved the targeted growth rate. Thus Planning commission can be called as moderately successful in its objectives because of which an overhaul in its approach was required. Secondly, it was brainchild of Jawaharlal Nehru who was inclined towards socialism where main motto is equal distribution of resources. It is evident from more than six decades of planning that commission has failed in this respect too. Thirdly, as already stated, commission was established with socialist economy in the mind. Now since Indian economy is a market based economy, overhaul of planning commission or its replacement was required.      

 

Other than economic reasons, there were political reasons too asking for transformation in the working of the commission. The Commission's power in allocating central funds to states and sanctioning capital spending of the central government was deeply resented by states and various government departments. The commission had remained powerful over the decades because it had emerged as a sort of parallel cabinet with the Prime Minister as its head. 

 

 

The government defended the NitiAyog by saying that it will inculcate the feeling of cooperative federalism which is also mentioned in the constitution. In the erstwhile Planning Commission this factor was missing as the states and union territories had no representation in the commission. The term co-operative federalism denotes a two-way relationship between the Centre and state governments in matters related to economic policy and development. For that matter, members of Chief Ministers and Lieutenant Governors of all the states are member of NitiAyog. While Prime Minister would be the ex-officio chairman of the commission, NITI Ayog will also have a vice-chairperson and a CEO in addition to five full-time members and two part-time members. Four union ministers would also serve as ex-officio members. Body will also have regional councils for specified tenures to address specific issues. Other key departments include Monitoring and Evaluation Division and Knowledge and Research Division. 

 

In past, plan prepared by Planning Commission was approved by National Development Council (NDC) which had all the Chief Ministers as its members. So in a way we can say the states had some say in the plan formation. But this is also not a hidden from anybody that NDC had little say and cabinet rarely gave any heed to the suggestions by NDC. Since in the NitiAyog, states would be represented in its General Council, states would be better represented in the national developmental plan formation.

 

 

 

Different states have reacted to the formation of NitiAyog in synergy with the form of government they had. States with BJP government have welcomed the formation of NitiAyog while those ruled by congress and other parties have opposed it. As of now it is too early to comment about its likely impact on planning but it is quite possible that if Congress comes to the power in next general elections, Planning Commission may again replace the NitiAyog. Nevertheless, structure of NitiAyog is definitely an improvement over its predecessor. 

 

Though it has boasted of decentralised planning but here too there is a centralised planning of different kind. For instance, at the commission plans for village level development will be formed at commission instead of plan formation at villages. Thus in a short term, we may not be able to see any major change in the policy making.