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Niti Aayog – India’s Planning Commission 2.0

January 5, 2015

The government of India has revealed the structure of a new think-tank called NITI (National Institution for Transforming India) Aayog (Niti Aayog means Policy Commission in Hindi), which will replace the now dismantled Planning Commission (PC). The key objectives of the new body are as follows,

  • Unlike the PC, which focused on five-year plans, NITI Aayog will undertake more ad hoc and long-term policy advisory for the central and state governments.
  • The body will foster better coordination between the central and state governments. It will be headed by the Prime Minister and all the state Chief Ministers, and a few union cabinet ministers will be ex-officio members.
  • It will formulate credible plans at the village level and aggregate these progressively at higher levels of government (i.e. a bottom-up approach).
  • It will act as a platform for resolution of inter-sectoral and inter-departmental issues to accelerate implementation of the government’s development agenda.
  • In addition, the new body will monitor and evaluate the implementation of programmes and focus on technology upgrades and capacity building.

PM Modi has indicated that the current government aims to achieve greater coordination between the state and central governments and get states more actively involved in designing and implementing the national development agenda. In our view, in a diverse country such as India, where one policy does not fit all states, perhaps a bottom-up policy approach driven by the state governments will be more effective than the topdown planning era approach of the Planning Commission. Overall, we see the setting up of the NITI Aayog as a first step in PM Modi government‟s efforts to foster “co-operative federalism” and focus on capacity building rather than income transfers.

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