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The Big Picture: Two years of NITI Aayog



The Big Picture: Two years of NITI Aayog


Mr. Narendra Modi’s Government replaced the Planning Commission which was set up in 1950 with NITI Aayog on 1st January 2015. The new policy body which is serving as a think tank is tasked with the role of formulating policies and directions for the Government. According to the resolution of the Union Cabinet for setting up the NITI Aayog, 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 NITI Aayog has been set up with an aim to foster and enhance the centre-state co-operation, the opposition parties criticize the body saying that the replacement of Planning Commission could be best viewed only as a cosmetic change.

Hits and Misses of NITI Aayog:

  1. NITI Aayog is still at infancy. It is trying to find out what its role should be because the role of think tank is not an easy one. There has to be awareness regarding all the constraints, be in touch with professional organizations and then decide whether a programme will work or not. Based on this, it has to give suggestions to the State Governments and Government of India. This role has not been performed by NITI Aayog, therefore, this body needs some more time.
  2. Any think tank has to be slightly distant from the Government. The members and Vice Chairman of NITI Aayog have been defending Government on all issues which is actually the role of various ministries of the Government. If that role is taken by the think tank, then there is a conflict between justifying Government and giving advice to the Government on right issues.
  3. Planning Commission was not doing very well because the members of this body were generally defeated politicians with no interest in academic knowledge or in finding out why things were not working well. Its role was to decide inter ministerial allocation of resources for education, health etc. Only this part has been removed from the NITI Aayog’s functions and this role has been now given to Finance Ministry. Earlier the Planning Commission was only designated to assimilate the demands of various ministries and state governments and then allocate resources.
  4. NITI Aayog has done some good work in the areas of land acquisition, whether PSUs should work as Government department or as a commercial organization, digital economy etc. Two years is a short span of time for any institution to evolve as the Planning Commission also evolved over the past 50-60 years gradually.
  5. As far as demonetization is concerned, NITI Aayog had no role in conceptualizing this move, affirming this policy or implementation. Even on MDGs, NITI Aayog could not generate a Report as to why India could not achieve them in 2015.
  6. States used to get funds from three different sources up to 2013-14. 50% funds was received from Finance Commission, 45% from Central Ministries and 5% from Planning Commission. Therefore, the role of the Planning Commission vis-a-vis states was diluted in 1991 itself. Finance Commission’s role has been enhanced and the role of the ministries has been reduced. Planning Commission even then was not there in the picture. It had a decisive role in deciding the funds allocated to the Ministries of Government of India.
  7. Job creation needs immediate focus as it is the need of the hour because those who are employed become a part of the economy. MSME sector can create a lot of jobs. So, some policies might come out to support MSME in creating jobs. Giving incentives might also help in this regard. NITI Aayog needs to study the trends of jobs in last few years in India as past few years were those of jobless growth. Programmes like Aajeevika have not rendered any new jobs. World Bank has said so in its Report as well.


Any criticism that leads to improvement or transformation is welcome. More studies are required to be done along with accountability. A clear roadmap of plans and ideas have to be there. The institution is expected to serve the purpose of co-operative federalism. NITI Aayog should make evaluations of the flagship programmes being run by the Government and help in delivering those programmes on ground. It has a role in governance and its larger role is to align with the Government policies and give them suggestions. To make it strong, some powers should also be vested in them.