Indian Economy News

Niti Aayog replaces Planning Commission; PM to be chairperson

  • Livemint" target="_blank">Livemint
  • January 2, 2015

New Delhi: The National Democratic Alliance (NDA) government will replace the 65-year-old Planning Commission with an institution to be named Niti Aayog, which will be chaired by the Prime Minister and serve as a government think tank.

“Niti Aayog will emerge as an active and important institution that will play a pivotal role in India’s development journey in the years to come,” Prime Minister Narendra Modi said in a message on Twitter on Thursday.

Niti Aayog, or National Institution for Transforming India, is meant to reflect changes required in India’s governance structures and provide a more active role for the state governments in achieving national objectives.

The proposed institution will provide governments at the central and state levels with strategic and technical advice across the spectrum of policymaking, according to a government statement on Thursday.

“This includes matters of 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,” the statement said.

Niti Aayog will be headed by the Prime Minister, who will be the chairperson.

The Prime Minister will appoint a vice-chairperson and a chief executive officer (CEO). The CEO will be appointed for a fixed tenure; it will be a secretary-level position.

The organization will have full-time members and up to two part-time members from leading universities, research organizations and other relevant institutions.

It will also have up to four ex-officio members from the Union council of ministers who will be nominated by the Prime Minister.

While this will be the full-time organizational structure, the new institution will also comprise a governing council which will include state chief ministers and lieutenant governors of Union territories.

A provision exists to convene regional councils to address specific issues and contingencies having an impact on more than one state or a region for a specific tenure.

Experts, specialists and practitioners with relevant domain knowledge will be included as special invitees nominated by the Prime Minister.

In his Independence Day speech, Modi had proposed scrapping the Plan panel and replacing it with a more contemporary body. He said that the new entity would see the Prime Minister and state chief ministers working together as a team to strengthen the country’s federal structure.

Since then, the government has held consultations with various stakeholders—state governments,domain experts and relevant institutions—to formulate the framework and objectives of the proposed new institution.

Among the key objectives of Niti Aayog will be evolving a shared vision of national development priorities, sectors and strategies with the active involvement of states, fostering cooperative federalism through structured support initiatives and mechanisms with the states on a continuous basis and to design strategic and long-term policy and programme frameworks and initiatives, and monitor their progress.

The new body will also develop mechanisms to formulate plans at the village level and aggregate these progressively at higher levels of government as well as offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate implementation of the development agenda.

It will be mandated to actively monitor and evaluate the implementation of programmes and initiatives, including the identification of the resources needed to strengthen the probability of success and scope of delivery. It will have to ensure that the interests of national security are incorporated in economic strategy and policy on areas that are specifically referred to it.

“Basically the objectives of the new institution sounds very much like that of the Planning Commission. The monitoring and evaluation roles have been retained,” said Pronab Sen, a former principal adviser in the Planning Commission and chairman of the National Statistical Commission.

“The only change, perhaps, is that the new body has not been given the powers to allocate funds, but that also needs further clarity. The mandate to look into the interest of national security is new,” he said.

The Planning Commission was set up by a March 1950 resolution of the government and made responsible for assessing national resources and drafting five-year plans for the effective use of the resources as India.

“Niti Aayog will be a body where the prime minister and state chief ministers will be thinking together, working together on shaping a strategy. However, the success of this proposed structure lies in its implementation. It will need people who are good at designing participative processes and practising them, else we will be back to square one,” said Arun Maira, former member of the Planning Commission.

“I hope the new body will not have the role of fund allocation,” he added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.