The Big Picture – Two years of NITI Aayog

  • February 6, 2017
  • 5
The Big Picture- RSTV
Print Friendly, PDF & Email

Two years of NITI Aayog



The National Institution for Transforming India is a policy body serving as ‘think tank’ tasked with a role of formulating policies and directions for the government. It replaced Planning Commission which had been preparing five year plans for India for last 60 years.

According to the resolution of the cabinet to set up NITI Ayog, the body is responsible to recommend a national agenda including strategic and technical advice on elements of policy and economic matters. It also develops mechanisms for village level plans and aggregates these progressively at higher levels of government.

While the NITI Ayog has been set up with an aim to foster and enhance the centre-state cooperation, the opposition parties criticised saying that the replacement of Planning Commission can be best viewed as a ‘cosmetic change’.

The change

The main role of Planning Commission was to decide inter-ministerial allocation. If a government allocates Rs. 5 lakh crores as planned fund, how to decide how much for industry, for education, for health etc. was being done by finance ministry in other countries. In India, this role has traditionally been done by Planning Commission. Now this role has been deleted and they are no longer deciding the allocation. It is now directly decided by the finance ministry just as done in state governments and other countries.

Planning Commission was not doing well because:

  1. Generally members of Planning Commission were defeated politicians and rarely had interest in academic knowledge or finding out why things are not working well.
  2. Most of officers posted in Planning Commission were due to its becoming a dumping ground for unwanted officers.

Earlier, the Planning Commission had been restricted with assimilating the demands of various ministries, state governments and allocating the resources. This was needing a change and hence from NITI Ayog, the role of assimilating and allocation of resources to the state has now been taken over by 14th FC.

Two years of NITI Ayog

NITI Ayog is still in infancy and trying to find out its role and how things should be done. The role of think tank is not an easy one. The members have to be aware of all the constraints, be in touch with professional organisations and give suggestions to state governments and central government. This role has still not been performed by NITI Ayog and thus they need some more time to carve out their responsibilities.

Any ‘Think tank’ has to be slightly distant from government. It has been however observed that members, vice-chairman of NITI Ayog have been defending government on all issues. That is the role of ministry of information, visual publicity or PMO. If this role is being performed by a ‘Think tank’ then there is a conflict between justifying government and giving advice to government on right kind of issues. Thus, it is not apt by NITI Ayog to justify the government on all issues, especially controversial issues.

Though it is true that it may not have accomplished the full work for which the transformation of NITI Ayog was done. But it is moving towards the same as its full term is not yet over.

Areas where NITI Ayog intervened

Land acquisition was a complicated issue where NITI Ayog set up its task force and explored area such as digitisation, land leasing. It has formulated a model land-leasing law, which Madhya Pradesh has adopted and Uttar Pradesh has substantially incorporated into a pre-existing law. Several other states are actively considering adopting the model law.

The Aayog has taken the initiative to identify numerous sick Public Sector units for closure. Action on 17 such units is under way. The Aayog has also identified several functioning units for strategic disinvestment.

It has also proposed replacement of the Indian Medical Council Act, 1956, by a Medical Education Commission Act to overhaul medical education in India.

The Aayog is also leading a campaign to bring about major reforms in agricultural marketing.

However, in the biggest policy decision impacting economic, political and social life had no role of NITI Ayog in terms of providing either the conceptual inputs or in implementation. They belatedly took up the idea of popularising digital payment system and innovating some lottery schemes.

Time needed

Two years is a short period of time for any institution to evolve. Even the Planning Commission evolved for over 60 years and ultimately rendered itself useless. Thus, in institutional life, two years is very less.

Truly independent?

The new ‘think tank’ has been called as National Institute for Transforming India thereby giving it a big name. But the work has not been concretized as yet. From the beginning, the terms of conceptualising this institute has been flawed. There was a body that was required to replace Planning Commission and hence something was set up without much thinking. The job of Planning Commission of allocation of resources for planned schemes among the states had been taken over by finance ministry. After that, NITI Ayog was conceived as a think tank. Now NITI Ayog is called a part of government where except for few external consultants, it functions within the same bureaucratic set up as the government. Hence, to think that it will come out with out of the box ideas will be very difficult or sending false signals.

Also, NITI Ayog has become a toothless organisation which has no power to implement or voice its decisions. The states also don’t turn up for meeting which they did during Planning Commission, which had allocating functions.

Role of Planning Commission vis-a-vis states

Planning Commission had no big role in funding the states, but rather had a very big role in deciding the funds for ministries of GoI. The states got funding from 3 sources: 50% from Finance Commission, 45% central ministries as CSS and only 5% from the Planning Commission. So Planning Commission’s role vis-a-vis states had been diluted in 1991 after liberalisation. The Planning Commission no longer decided what state schemes should run and that function was given to respective ministries. These ministries are still running programmes such as SSA, PMGSY, NREGA.

Analytical role

Job creation is a major concern. Unemployment leads to faltering of economy as well. The government had promised 100 million jobs by 2019. It is very well established that during 2004-14, it was a period of jobless growth. Hardly any jobs were created in that period.

In last two years, the government has given lot of importance to it. But what has happened in last two years should be studied by NITI Ayog.  Until two years, NITI Ayog has not fared expectedly in this process. The industry expects from NITI Ayog to create avenues of jobs through its findings and analysis. For example, the MSME sector can create jobs but how and how much is not categorically known.

Unfortunately, World Bank came out with a study recently showing that progress is dismal. Programmes like Ajeevika have not rendered any new jobs and hence a failed programme.

Government very rightly asked NITI Ayog to monitor sustainable development goals. For one year and half, they have not produced a sigle report as to why MDGs were not achieved by India in respect to gender, health, hunger, education, sanitation. They should analyse it and make a report else all these flaws will remain and sustainable development goals will also not be achieved.

Way forward

Any criticism which leads to improvement or desired transformation is welcome. More studies need to be done by NITI Ayog to establish itself as a critical institution in fora of planning. Also, there should be some accountability, more information given to public and road map of future course of action given by NITI Ayog.

There is a need for an institution to serve the concept of cooperative federalism. The highest decision making on development and planning which used to be NDC, NITI Ayog should serve a similar Team India concept.

It would be useful if NITI ayog could make evaluation of government policies and programmes given that it is not able to come up with out of the box ideas by itself. It can give tips which could help to deliver those programmes on ground- Make in India etc.

NITI Ayog is disintegrating its planning into three areas. 15 years long term vision document. 7 years implementation plan and 3 years short term action plan. It is expected to come out with the action plan shortly which will expectedly take into account the impact of demonetisation on the economy, especially on informal sector.

Connecting the dots:

  • What is NITI Ayog? Critically examine its role post scrapping of Planning Commission.


For a dedicated peer group, Motivation & Quick updates, Join our official telegram channel – https://t.me/IASbabaOfficialAccount

Subscribe to our YouTube Channel HERE to watch Explainer Videos, Strategy Sessions, Toppers Talks & many more…

Search now.....