NITI Aayog

From Planning Commission to NITI Aayog

• Planning has always been central to India’s developmental journey, inspired initially by the socialist models of the erstwhile USSR. For nearly six decades, the Planning Commission functioned as the apex planning body, operating under a control-and-command approach. However, over time, this model became outdated in the context of a liberalised and globally integrated economy.
• On January 1, 2015, the Planning Commission was replaced by a new institution, the National Institution for Transforming India (NITI Aayog). The new body was designed to function on the principles of “Maximum Governance, Minimum Government” and to promote a ‘bottom–up’ approach in planning. Its creation reflected the spirit of cooperative federalism, giving states greater autonomy and participation in shaping national development strategies.

Composition of NITI Aayog

• Chairperson: The Prime Minister of India heads the institution.
• Vice-Chairperson: Appointed by the Prime Minister.
• Governing Council: Comprises all Chief Ministers of states and Lieutenant Governors of Union Territories.
• Regional Councils: Constituted to address specific regional issues. These are chaired by the Prime Minister or his nominee and include Chief Ministers and Lt. Governors.
• Adhoc Membership: Two members from leading research institutions serve on a rotational basis.
• Ex-officio Membership: Up to four Union Ministers nominated by the Prime Minister.
• Chief Executive Officer (CEO): Appointed by the Prime Minister for a fixed tenure, holding the rank of Secretary to the Government of India.
• Special Invitees: Experts and specialists with domain knowledge nominated by the Prime Minister.

NITI Aayog Hubs

The institution functions through two key hubs:

1. Team India Hub, which acts as the interface between the Centre and the States, ensuring effective cooperation and coordination.
2. Knowledge and Innovation Hub, which enhances the think-tank role of NITI Aayog by providing evidence-based policy insights, innovation strategies, and research support.

In addition, NITI Aayog envisions preparing three key documents for long-term planning and strategy: a 3-year action agenda, a 7-year medium-term strategy paper, and a 15-year vision document.

Importance of NITI Aayog

The replacement of the Planning Commission was necessitated by the recognition that a “one-size-fits-all” model of planning was no longer suited for a country as diverse as India. The Planning Commission, effective during the era of a command economy, had become increasingly redundant in a market-driven, liberalised, and globalised environment.

India’s states are at different stages of economic development and face distinct challenges and opportunities. The NITI Aayog provides a flexible and dynamic platform to address this diversity while ensuring that India remains competitive in the global economy.

OBJECTIVES:

• To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of States.
• 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 benefiting 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 learned 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 the 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.

Comparison between NITI Aayog and Planning Commission

Aspect	NITI Aayog	Planning Commission
Nature	Serves as a policy advisory and knowledge institution (think tank).	Functioned as a non-constitutional, non-statutory body with centralised control over planning.
Expertise	Draws membership from a wider pool of experts, technocrats, and professionals.	Had limited expertise, primarily bureaucrats and political appointees.
Federal Role	Promotes cooperative federalism, treating states as equal partners.	States had a limited role, mostly acting as spectators in plan meetings.
Appointments	The CEO (Secretary rank) is appointed by the Prime Minister. Currently, B.V.R. Subrahmanyam is the CEO (since February 2024).	Secretaries were appointed through the regular bureaucratic process.
Approach to Planning	Emphasises a ‘Bottom-Up’ approach, encouraging state and grassroots participation.	Followed a ‘Top-Down’ approach, with directives issued by the Centre.
Policy Role	Has no mandate to impose policies; functions only in an advisory capacity.	Had binding authority; imposed policies and linked fund allocation with approved projects.
Financial Powers	Has no power to allocate funds; this lies with the Ministry of Finance.	Had significant power to allocate funds to ministries and state governments.