Birth of a new institution

In line with the Government of India’s approach of less government and a move away from centralised planning, the NITI Aayog with a new structure and focus on policy will replace the 64-year old Planning Commission that was seen as a vestige of the socialist era. The new body, conceived more in the nature of a think-tank that will provide strategic and technical advice, will be helmed by the Prime Minister with a Governing Council of Chief Ministers and Lt. Governors, similar to the National Development Council that set the objectives for the Planning Commission. The NITI Aayog seeks substitute centralised planning with a ‘bottom-up’ approach where the body will support formulation of plans at the village level and aggregate them at higher levels of government. In short, the new body is envisaged to follow the norm of cooperative federalism, giving room to States to tailor schemes to suit their unique needs rather than be dictated to by the Centre. This is meant to be a recognition of the country’s diversity. The needs of a State such as Kerala with its highly developed social indicators may not be the same as that of, say, Jharkhand, which scores relatively low on this count. If indeed the body does function as has been envisaged now — and the jury will be out on that — States will, for the first time, have a say in setting their own development priorities.

One significant change of note is that one of the functions of the body will be to address the needs of national security in economic strategy. Nowhere is this more relevant than in the area of energy security where India, unlike China, has failed to evolve a coherent policy over the years. Similarly, networking with other national and international think-tanks and with experts and practitioners, as has been envisaged, will add heft to the advice that the NITI Aayog will provide. To deflect criticism that this will be a free-market institution that ignores the deprived, the government has taken care to make the point that the body will pay special attention to the sections of society that may not benefit enough from economic progress. How this operates in practice will bear close watching. Interestingly, though it will not be formulating Central plans any more, the NITI Aayog will be vested with the responsibility of monitoring and evaluating the implementation of programmes. Thus, while the advisory and monitoring functions of the erstwhile Planning Commission have been retained in the new body, the executive function of framing Plans and allocating funds for Plan-assisted schemes has been taken away. But who will now be responsible for the critical function of allocating Plan funds? Hopefully, there will be greater clarity on this aspect in the days ahead.