Prime Minister Narendra Modi to chair Planning Commission's new avatar 'NITI Aayog'

Following up on Prime Minister Narendra Modi's Independence Day announcement, the government, Thursday, replaced, the Planning Commission with a new institution named NITI Aayog (National Institution for Transforming India).


New Delhi: Following up on Prime Minister Narendra Modi's Independence Day announcement, the government, Thursday, replaced, the Planning Commission with a new institution named NITI Aayog (National Institution for Transforming India).

As per press note released by the government, the institution will serve as ‘think tank’ of the Government and provide governments, both at the central and state levels, with relevant strategic and technical advice across the spectrum of key elements of policy.

“Perhaps most importantly, the institution must adhere to the tenet that while incorporating positive influences from the world, no single model can be transplanted from outside into the Indian scenario. We need to find our own strategy for growth. The new institution has to zero in on what will work in and for India. It will be a Bharatiya approach to development.”

National and international import on the economic front, dissemination of best practices from within the country as well as from other nations, the infusion of new policy ideas and specific issue-based support, are other areas of focus for the new institutions.

The decision to replace the planning comission was taken by the union cabinet. The cabinet resolution said, “From being preoccupied with survival, our aspirations have soared and today we seek elimination, rather than alleviation, of poverty. The people of India have great expectations for progress and improvement in governance, through their participation.”

“They require institutional reforms in governance and dynamic policy shifts that can seed and nurture large-scale change. Indeed, the ‘destiny’ of our country, from the time we achieved Independence, is now on a higher trajectory.”

“The past few decades have also witnessed a strengthening of Indian nationhood. India is a diverse country with distinct languages, faiths and cultural ecosystems. This diversity has enriched the totality of the Indian experience.”

“Politically too, India has embraced a greater measure of pluralism which has reshaped the federal consensus. The States of the Union do not want to be mere appendages of the Centre. They seek a decisive say in determining the architecture of economic growth and development. The one-size-fits-all approach, often inherent in central planning, has the potential of creating needless tensions and undermining the harmony needed for national effort.”

“Dr. Ambedkar had said with foresight that it is “unreasonable to centralise powers where central control and uniformity is not clearly essential or is impracticable.”

The government said – in context of the changed requirements of our country – there was a need for setting up an institution that will play the role of a directional and policy dynamo.

“An important evolutionary change from the past will be replacing a centre-to-state one-way flow of policy by a genuine and continuing partnership with the states. The institution must have the necessary resources, knowledge, skills and, ability to act with speed to provide the strategic policy vision for the government as well as deal with contingent issues.”


The vision of the NITI Aayog will then provide a framework ‘national agenda’ for the Prime Minister and the Chief Ministers to provide impetus to.

The Aayog's chairperson will be the Prime Minister and the Governing Council will comprise of the Chief Ministers of all the States and Lt. Governors of Union Territories.

Beside the PM, the organizational framework will include a Vice-Chairperson, full time members, maximum of two part-time members from leading universities research organizations and other relevant institutions in an ex-officio capacity, 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 and Secretariat as deemed necessary.

NITI Aayog agenda

  • To foster cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis, recognizing that strong States make a strong nation.
  • To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.
  • To ensure, on areas that are specifically referred to it, that the interests of national security are incorporated in economic strategy and policy.
  • To pay special attention to the sections of our society that may be at risk of not benefitting adequately from economic progress.
  • To design strategic and long term policy and programme frameworks and initiatives, and monitor their progress and their efficacy. The lessons learnt through monitoring and feedback will be used for making innovative improvements, including necessary mid-course corrections.
  • To provide advice and encourage partnerships between key stakeholders and national and international like-minded Think Tanks, as well as educational and policy research institutions.
  • To create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and other partners.
  • To offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda.
  • To maintain 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 dissemination to stake-holders.
  • To actively monitor and evaluate the implementation of programmes and initiatives, including the identification of the needed resources so as to strengthen the probability of success and scope of delivery.
  • To focus on technology upgradation and capacity building for implementation of programmes and initiatives.
  • To undertake other activities as may be necessary in order to further the execution of the national development agenda, and the objectives mentioned above.

The Prime Minister had recently called meeting of all chief ministers to deliberate on the structure of the new body which would replace the Commission.

The majority view that emerged after the meeting was in favour of decentralisation of power.

Congress-ruled states, however, had reservations about dismantling an institution which was set up by the first Prime Minister Jawaharlal Nehru and they suggested restructuring of the existing body, rather than a complete replacement.

Incidentally, Nehru himself is said to have faced resistance to the idea of setting up of the Planning Commission, but it went on to become a major platform for successive governments to formulate and push forward economic policies and other development plans.

Finance Minister had then said that a principle of 'cooperative federalism' is being followed in setting up the new body in place of Planning Commission.

"Our government stands by the principle of cooperative federalism, empowering states, least number of central schemes and more state schemes," Jaitley said while replying to a debate in the Lok Sabha.

The Planning Commission was set up by a simple government resolution in March 1950 and has withstood many political and economic upheavals, as also some occasional controversies, including those related to its poverty estimates as also about a huge toilet renovation bill and foreign tour expenses of its last Deputy Chairman.

The plan panel has commissioned 12 five-year plans and six annual plans involving fund outlays of over Rs 200 lakh crore in its 65-year-history.

It was set up initially as part of the government's declared objectives to promote a rapid rise in the standard of living of the people by efficient exploitation of resources, increasing production and offering employment opportunities.

The Commission was charged with the responsibility of assessing all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.

The first Five-year Plan was launched in 1951 with total outlay of little over Rs 2,000 crore 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 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.

For the first eight Plans, the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the 9th Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.

With agency inputs

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