Essay on Niti Aayog: A Major Shift In Policy Making

NITI Aayog was established on 1st January, 2015 as a policy think tank’ of the Government of India. NITI Aayog stands for ‘National Institution for Transforming India’. The NITI Aayog has replaced the Planning Commission, and the step is seen as an evolutionary process by many.

The Planning Commission was established in 1950 under the leadership of Pt Jawaharlal Nehru. It formulated the Five Year Plans. The Planning Commission made assessment of the resources, formulated plan for utilisation of the resources, assessed the economic growth of the country and the progress achieved by the plans and made recommendation to both Central and State Governments from time to time. NITI Aayog will provide strategic and technical advice at the Central and State level on a broad range of subjects. Unlike the Planning Commission which formulated plans for the Central and State Government, NITI Aayog will act only as a ‘think tank’.

The NITI Aayog has been set-up with several objectives which include

  • To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of states in the light of national objectives.
  • To foster cooperative federalism through structured support initiatives and mechanism with the states on a continuous basis, recognising that strong states make strong nation.
  • To design strategic and long-term policy and programme frameworks and initiatives, and monitor their progress and their efficiency. The lessons learnt through monitory and feedback will be used for making innovative improvements including necessary mid-course corrections.
  • To offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda.

The formation of NITI Aayog is seen as a major shift in policy-making. The NITI Aayog will help in overcoming the policy fatigue witnessed by the Planning Commission due to the structural changes in central planning process. Today, bodies like NITI Aayog hold more relevance than bodies like Planning Commission in the era of dominance of market economy and public-private partnerships. The NITI Aayog can help in better coordination of the public-private sectors and make necessary advice which is relevant to the present times. NITI Aayog has embarked on several achievements in the past three years. Taking note of increasing cases of leasing in and out of land and suboptimal use of land with lesser number of cultivators, NITI Aayog has formulated a Model Agricultural Land Leasing Act, 2016, to both recognise the rights of the tenants and safeguard interest of landowners. NITI Aayog has developed the first ever ‘Agriculture Marketing and Farmer Friendly Reforms Index’ (Maharashtra ranks highest in implementation of various agricultural reforms). NITI Aayog also launched two incentive schemes to promote digital payments across all sections of society – the Luck Grahak Yojana (for consumers) and Digi Dhan Vyapar Yojana (for merchants). Atal Innovation Mission (AIM) has been set up by the government in accordance with NITI Aayog to strengthen the country’s innovation and entrepreneurship ecosystem. It is planning to set up a Methanol Economy Fund to promote production and use of the clean fuel.

Despite all these achievements, NITI Aayog is not immune from criticism. Over the period to time, several criticisms have been levied against it by different NGOS and political scientists. These include (i) Most of the members of NITI Aayog are taken from the government, therefore most of its decisions are taken under their influence, (ii) It is considered an infant because its experience is far less than that of the Planning Commission, (iii) Most of the important areas like job creation have not been focused on by NITI Aayog, rather it is focusing on areas like demonetisation and MDGs which are the matters of government, (iv) It has been pointed by the analysts that NITI Aayog will have the same fate as Planning Commission because both are non-constitutional advisory bodies dominated by politics.

India, during Planning Commission era, followed a “top to bottom” approach. But, today the states want more say in policy formulation; they do not want to be passive receiver of central funds and merely implementing agents of the Centre.

The NITI Aayog will adopt the “bottom up” approach where local and state agencies will have power to take decisions as against “top to bottom” approach of Planning Commission. It will follow the norm of cooperative federalism. The new body will play an important role in recognising the diverse needs of various states, help in setting inter-state disputes and in providing a greater say to the states in setting their own development priorities. The role of the government after the LPG (Liberalisation, Privatisation, Globalisation) era has changed. The government today acts as an enabler and facilitator rather than a provider of first and last resort. Today think tanks like NITI Aayog are more relevant as they can advise, monitor, strategise according to the dynamic needs of the time. Think tanks provide knowledge, creative ideas and greater cooperation and coordination, at national and international levels.

The Planning Commission was envisaged in an era when most of our population was living under poverty, the literary rates were low, our economy was mainly agriculture based, the states required the guidance and support of the Centre. But, today, the scenario is different. Today, there is more demand for policy freedom by the states, today the local governments are playing a bigger and more positive role than earlier, today the private sector’s role and reach has increased. Therefore, a policy shift like NITI Aayog from Planning Commission was required. NITI Aayog will add dynamism to India’s policy-making and developmental process.

The present setup of the Niti Aayog

  • The PM is the Chairperson.
  • The Governing Council is composed of Chief Ministers of all the States/UTs, Lieutenant Governors of UTs (excluding Delhi and Puducherry.
  • Regional Councils formed on need basis, comprising CMs and Lt. Governors of the region.
  • Full-time organizational framework composed of a Vice-chairperson, three full-time members, a maximum of two part-time members on rotational basis from relevant institutions/expertise, a maximum of four ex-officio members nominated by PM from Union Council of Ministers, Special Invitees, a CEO and a secretariat.
  • Dr Rajiv Kumar is the Vice-Chairperson.
  • NILERD (National Institute of Labour Economics Research and Development) is an autonomous institute under NITI Aayog.