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Niti Aayog Planning Commission Functions
Niti Aayog Planning Commission Functions
MrunalExplained:NitiAayog,PlanningCommission,Functions
Mrunalhttp://mrunal.org
[Economy]NitiAayog,PlanningCommission:Evolution,Structure,Functionand
truckloadofCriticismexplained
PostedByMrunalOn21/01/2015@1:00pmInEconomy|106Comments
1. TimelineofplanninginIndia
1. FiveYearplans:from1stto12th
2. PlanningCommission:Criticism/AntiArguments
2. NitiAayog:Structure,Membership
1. NITIAayog:functions,Mandates
2. FunctionalComparison:NitivsPC
3. NitiAayog:Criticism/AntiArguments
4. AllocationoffundstoStates?
5. ChineseNitiAayog?
3. MockQuestions
1934
1938
1944
1944
1945
1950
1950,March
15
1952,Aug.
2014,Aug.
2015,Jan
TimelineofplanninginIndia
VisvesvarayaplaninthisbookTheplannedeconomyofIndia.HewasanEngineer,ExDiwan
ofMysoreandBharatRatnarecipient.
NehrusCongressplan.ButnotimplementedduetoWW2.
BombayplanbynotedindustrialistssuchasJRDTata,GDBirla,KasturbhaiLalbhaietal.
SrimanNarayanAgrawalsGandhianplan.
MNRoyspeoplesplanwithsocialistleanings.
JayprakashNarayansSarvodayaPlanbasedonVinobaBhavesphilosophy
CabinetresolutiontoformPlanningcommission.
NationalDevelopmentcouncil(NDC)madebyCabinetresolution.
Modishutsdownplanningcommission.
GovernmentnotifiedtheformationofNitiAayogNationalInstitutionforTransformingIndia.
Plan
Period
FiveYearplansinIndia
theme/Model/target
1st
5156
HarrodDomarModel
Mainfocus:Agriculture,irrigationandpower.
GotmoreGDPgrowththanitsoriginaltarget.
2nd
5661
P.C.MahalanobisModel
Socialistmodel,Rapidindustrialization,heavyindustries.
3rd
6166
SukhmoyChakrabortyandSanddy
AlsocalledGadgilYojana.
FailedtoachieveitstargetduetodroughtsandwarswithPakChina
Holidays
6669
Holidaydeclaredthanksto#EPICFAILof3rdFYP.
4th
6974
AshokRudraAlonManney
growthwithstabilityandselfreliance.[GaribiHataocamehere,saysLucentGK]
#EPICFAILduetoBangladeshirefugeeproblemanddrought.
5th
7479
C.SubramaniamandlaterredraftingbyD.P.Dhar
Originallyitwasa10yearlongtermperspectiveplanwithfocusonpovertyremoval
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andselfreliance
RollingPlan 7880
MorarjiDesaisJantagovernmentcameupwithRollingplansystemwellmeasure
progresseveryyearandmakenewplansaccordinglyfornextyear.
6th
8085
Povertyremoval(GaribiHatao),IRDP,NREM,TRYSEMetc.[GaribiHataocame
heresaysRameshSingh]
7th
8589
PranavMukherjee
Focusonemployment.JawaharRozgarYojanastarted.
2Annual
plans
8991
PoliticalinstabilityatCentre.Henceonlyannualplans.
8th
9297
JohnW.Millermodel.
PVNarasimhaRaoLPGreforms
9th
9702
Growthwithsocialjusticeandequity.Mostlyindicativeplanning.
#EPICFAILduetoglobalslowdownafterAsianfinancialcrisis.
10th
0207
8%GDPgrowthrate,doublepercapitaincomein10years.
11th
0712
Theme:inclusivegrowth
C.Rangarajanframeditwithtargets:810%growthrate,70millionnewjobs,lower
IMR,CMR,TFRetc.
1217
Theme:Faster,Moreinclusiveandsustainablegrowth.
Targetgrowthrates:9%GDP,4%Agriculture,10%Mfg.
10%reductioninpoverty,create50millionnewjobs.
GetIMR:26,MMR:1000,ChildSexratio:950,TFR:2.1
Increasemeanschoolyears,forestcover,infrastructureinvestment,ruraltele
density.
12th
PlanningCommission:Criticism/AntiArguments
1. Achieved>9%GDPgrowthrateduring200507,thankstoAmericanboompriortosubprimecrisis.But
almostallnationsofworldexperiencedhighgrowth.So9%GDPdidnotcomefromMonteksmagicwand.
2. Postsubprimecrisis,failedtoevoketheanimalspiritinIndianeconomy.GDPfell,inflationroseduring
200813nonstop.
3. ReducedpovertybydoctoringtheBPLline.Tendulkarlinesays27croreBPL,ifweuseRangalinethen37
croreBPL.PlanningcommissionbragsreducingpovertylineonTendulkarsparameters.
4. Toothlessbody,cantholdState/union/ministries/departmentsaccountableforfailingtoachievetargets.
5. HopesthatCAGandPublicaccountsCommitteewilltakecareaccountabilitypart.ButPACtooispretty
muchtoothless.
6. Failedtoimplementlandreforms.FaultypoliciesforMSME,industrialization,Factorylabourlawproblems.
7. OfficemannedbyGeneralistIAS/IESwithshorttenurepanelmembersfilledwithacademiciansand
jholachhapNGOs.NeedsubjectspecialistswithinternationalexposurelikeRajanbhai.
8. DesignedCSSwithOnesizefitsallapproachandafewextracrorestoNE/J&K/HillstatesandLWE.But
forlong,itdidnotusepilotprojects/sampletesting/interactionwithstates.
9. Hence,IAY,ICDSetc.programsfailedtoshowtangibleresultdespitepumpingcrores.
10. TheytriedtobypassstateGovernmentsviaNGOfunding,DRDA.HenceStatesunenthusiasticabout
implementingCentralschemesnamedafteryouknowwho.
11. Onlyin2013reformsdonelikereducingnumberofCentrallysponsoredschemes(CSS),10%flexifundto
states,directtransferofmoneytostateconsolidatedfunetc.Butitstoolittletoolate.
12. Shortcomingsinplanningcommission=>newbodiessprunguplikePMseconomicadvisorycouncil,PMs
projectmonitoringgroupandsoon=>morebrains=>morelackofcoordination.
13. HenceModifeltthatPCisbeyondfixingjustlikeGothamcityandDelhicity.
14. Forsomanyyears,Governmentworkedastheprovideroffirstandlastresort.But,todayIndianindustry
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andservicesectorhasreachedonglobalscale,aneomiddleclasshasemerged.
15. Timeshavechanged,frombeingaunderdevelopedcountryin1950sIndiahasbecomeamajor
economicforce.
16. Henceourneedshavechangedfrommerefoodsecuritytoprofitableagriculture.Inthisplayground,
Governmentneedstobecomeanenablerratherthanaplayer.
AndthusNitiAayogwasborn.
NitiAayog:Structure,Membership
NitiAayog:Structure,Composition,Membership
Position
Born
PlanningCommission
NITIAayog
1950,March15th
diedin2014,August
2015,January1st
afterModibecamePM.
Chairman Primeminister
LastDy.Chairmanwas
Vice
MontekSinghAhluwalia
Chairman
(Cabinetministerrank).
same
FreemarketeconomistArvindPanagriya.HewastheChief
economistofAsianDevelopmentbank,andthethebrain
behindRajasthanslandlabourreform.
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MemberSecretary
(IAS)
SindhushreeKhullar
(IAS)
CEO
Asecretarylevelbureaucratwithfixedtenure.
SameMs.SindhushreeKhullaristhefirstCEO.
PMcannominatefourUnionministers.Modihasnominated
following:
Exofficio
members
FinanceMinister
Planningminister
Fulltime
members
47fulltimemembers,who
enjoyMinisterofState
rank.
1.
2.
3.
4.
Home
Finance
Railway
Agriculture
BibekDebroy(Freemarketeconomist)
Dr.V.K.Saraswat(technocrat,missilescientistandExDRDO
chief.)
Unionministersfor
Special
Invitees
1. Transport
2. HRD
3. SocialJustice
+PMcaninviteotherexpertsasandwhenneeded.
parttime
members
Governing
Council
adhoc
Regional
Councils
Techexpertsfromresearchinstitutes.Currentlynonedeclared.
Rotationalposts.
Chairman:Primeminister
Chiefministersofallstates
LieutenantgovernorsofallUnionterritories.
WillhaveCMsofstatesthatfallintheregion.Theyllbedealingwith
specificissueconcerningagroupofstatesforexampleirrigation,
naxalproblem,infrastructureetc.
NITIAayog:functions,Mandates
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NitiAayog:functions&mandate
1. ThinktankforGovernmentpolicyformulation.
2. Findbestpracticesfromothercountries,partnerwithotherdesividesibodiestohelptheiradoptionin
India.
3. CooperativeFederalism:Involvestategovernmentsandevenvillagesinplanningprocess.
4. Sustainabledevelopment:+ModisZerodefectzeroeffect(onenvironment)manufacturingmantra.
5. UrbanDevelopment:toensurecitiescanremainhabitableandprovideeconomicvenuestoeveryone.
6. ParticipatoryDevelopment:withhelpofprivatesectorandcitizens.
7. InclusiveDevelopmentorAntyodaya.EnsureSC,STandWomentooenjoythefruitsofDevelopment.
(becauseDinDayalsaidso.)
8. Povertyeliminationtoensuredignityandselfrespect.(becausePoetTiruvalluvarsaidso)
9. Focuson5croreSmallenterprisestogeneratemoreemploymentforweakersections.
10. Monitoringandfeedback.Midwaycoursecorrection,ifneeded.
11. Makepoliciestoreapdemographicdividendandsocialcapital.
12. RegionalCouncilswilladdressspecificissuesforagroupofstates.Example:RegionalCouncilfor
drought,Leftwingextremism,Tribalwelfareandsoon.
13. ExtractmaximumbenefitfromNRIsgeoeconomicandGeopoliticalstrengthforIndiasDevelopment.
14. UseSocialmediaandICTtoolstoensuretransparency,accountabilityandgoodgovernance.
15. Helpsortinginterdepartmentalconflicts.
16. Lotofbolbachachangiriandvagueideasaboutnationalselfinterest,capacitybuilding,participatingin
globalvillageetc.
Planningcommission
DesignFYPFiveyearplans
Decidetwomoneymatters:
FunctionalComparison:NitivsPC
NITIAayog
Designnationalagenda,andcooperativefederalism.
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1. Howmuchmoneytogiveto
eachstateforcentrally
sponsoredschemes(CSS)
2. Howmuchmoneytogivefor
eachstatesownstatefive
yearplans.
States/UTwererepresentedin
NationalDevelopmentCouncil.
PCframedFYP=>wentto
Cabinet=>NDCapproved
FYP=>Tabledinparliament.
Onesizefitsall,topdownsocialist
planningbyArmchairNehruvian
economistsandIEScadreofficers
(IndianEconomicService).
Mostlyworkasapolicyformulationhub.ThePressreleaseis
silentonmoney/funding.so,mostprobablyitllbelefttofinance
ministry.
SomeexpertsbelieveInterstatecouncilwilldecidemoney
allocationtostates,thenfinanceministrywillreleasethefund.
States/UTrepresentedinGoverningcouncil.Butnospecific
mentionaboutwhethertheycanapprove/reject/amendNitiAayogs
proposals?
Pressreleasetalksaboutparticipatoryplanningbuthowexactly
willtheydothat?Nospecificdetailslaidout.
IESofficersarerarelyinvitedinModismeetings.
ButgiventheentryofFreemarketeconomistsandTechnocrats,
mostprobablyitllbeanindicativeplanning+coreplanningi.e.
afterinputsofstategovernments,abroadoutlinewithselected
targets,limitedsubsidiesandmonitoringthroughICT.
NitiAayog:Criticism/AntiArguments
1. BibekDebroy(Fulltimemember)himselfcriticizedthevaguelywordedpressreleaseonNitiAayogformation.
Modishouldhavespecificallypointedoutitsfunctionsandjurisdiction.
2. ModisarbitrarydecisiontodismantlethePlanningCommission,withouttakingNDCorstatesinto
confidencethisunderminescooperativefederalism.(SaysKeralaCM).
3. FromunionterritoryonlyLieutenantGovernorsinvited.CMofDelhiandPuducherrycantparticipatein
Governingcouncil.
4. LikePC,NITIAayogtooisanonConstitutional,nonstatutorybodyformedbyacabinetresolution.Itisnot
accountabletoparliament,andiflineministriesfailtoachievetargets,NITIAayogcannotpunishthem.
5. NitiAayogshouldhavebeencreatedthroughalegal/Constitutionalamendment.Thereshouldbea
perspectiveplanspanningfor15to20years.Otherwise,whatifanotherpartycomesintopowerand
dismantlesthis?RecallMorarjivsIndira.
6. Itlltakeminimum68monthsforNitiAayogtosetthingsinmotion.Inbetweenthattime,Developmentwill
behaltedduetopaucityoffundsandideas.
7. PlanningcommissionandNDCdecidedspecialcategorystatesandgavethemadditionalfundingtohelp
thepoorandbackwardregions.WithadventofNitiAayog,willthosestateslosetheirstatusandextra
funding?Uncertaintyprevails.
8. NitiAayogwillconflictwithCabinetSecretariat(forinterministerialcoordination)andconstitutionalbody
InterStateCouncil(forcoordinationwithstates).
9. FinMinofficialsalwaystrytosqueezebudgettokeepthefiscaldeficitunderFRBMtargets.NitiAayogand
itsfreemarketeconomistswillfurtherreducewelfareschemestohelpthem.
10. Atpresentweve60+centrallysponsoredschemes.Modiaimstocombinethemintojust10schemes.
Thus,poorandmarginalizedcommunitieswillsuffer.
11. PlanningcommissionusedtomonitorofhumandevelopmentintheStates,Subplansforwomen,SCand
ST.NitiAayogdoesntsayhowtheylldoit.
12. NitiAayogsmandaterepeatedlysaystheyllfocusonmanufacturingsector.Rajanbhaisaysjustbecause
Chinasucceededonmanufacturingfocus,doesntautomaticallyguaranteethatsameCinderellastorywill
repeathere.
13. ModidistributedtheplanningExpenditurefunctiontoFinMinandsubjectmatterstorespectiveministries.
Thiswillresultinlossofperspectiveandlongtermview.NowStategovernmentswillhavetolobbyatboth
typeofministriestogetfundsreleased.
14. PlanningCommissionsNehruvianEconomistsadvocateddecentralizedplanning.Modisfreemarket
economistsandtechnocratswillpursuecentralizedplanningandemonitoring.(Itisbothproandanti
argumentdependingonhowbrainwashedapersonisafterreadingtheHindu.)
15. 1961:IndianEconomicService(IES)wasbornonNehrusinitiative.Modidoesntinvitetheminmeetings,
freemarketeconomistslookdownuponthemwithutterdisdain.Howtheyllbeintegratedinthenew
system?Noclearanswersgiveninthepressrelease.
16. ThereisnoneedforanyPlanningcommissionorNitiAayog.Goodworkcanbedoneevenwithoutthem
throughlineministriesandinterstatecouncils.
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Anyways,therealworkofNITIAayogisyettobegin.So,mostcriticismiscentredaroundthethemethatSince
pressreleasedoesnttalkaboutxyzthingsoonlybadthingwillhappen..But,onlytimewilltellhowNITIAayog
faresinreallife.
AllocationoffundstoStates?
Untilnow,Statesgotfundingfromtwoplaces
Finance
commission
GavesharefromUnionrevenuetostates.Decidestheformulaforevery5years.
~2%ofGDPflewthisway.
Gavetwotypesoffunding
Planning
commission
1. Centrallysponsoredschemes(~66schemes).MoneygivenafterconsultationbetweenPC
andrespectiveministriesofhealth,educationetc.atunionandstatelevel.
2. Centralassistanceforstateplans.MoneygivenafterconsultationbetweenPC,FMand
StateGovernment.
~2.5%ofGDPflewthisway.
Afterscrappingtheplanningcommission,ModiwantedtheFinancecommissiontoovereseeallthreetypesof
moneyallocationsi.e.
1. Sharefromuniontaxes
2. CSS:Centrallysponsoredschemes
3. Unionsassistancetostatesplans.
ButModicouldntdoiteasilybecause:
1. Constitutionamendmentnecessary,togivefinancecommissionthesenewpowers.
2. ButtheChairmenof13thand14thFinancecommissiondontlikethisadditionalhomework.NOTONEbit.
Because
Financecommissionisanonpermanentbodyconstitutedevery5thyear,henceitcanlookatthe
issuesfromafreshperspective.Ifitsturnedintoapermanentbodythenincrementalistapproachwill
creepini.e.throwingmoremoneyinexistingschemesratherthanfixingfromscratch.
Financecommissionmembersareexpertinrevenuesharing.ButplanningExpenditurerequires
expertmemberswithdevelopment,capitalassetbuildingperspective.
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GujaratCMevensaid,Unionitselfshouldgivetheplanmoneytostates,insteadofkeepingsuch
backdoormechanism.
ChineseNitiAayog?
ChineseNDRC
Makesmacroeconomicpolicy
Approvesinvestment&constructionprojects
MakesEnergy&oilpolicy
LooksafterbackwardprovincesintheWestern
region.
RealBoss:StatecouncilheadedbyPresidentof
China.
Indiapresentsystem
Financeministrymakesfiscalpolicy.
RBImakesmonetarypolicy.
CCI,FIPBandmanyotherbodies@unionandstate
level.
Oilministry,DGHydrocarbondecideit.
SeparateministryforNEDevelopment
CabinetHeadedbyPM.
ExpertsthoughtModiwantedtoreplacePCwithabodylikeChinasNDRC.(NationalDevelopmentand
reformcommission).
ButNitiAayogpressreleaseandjurisdictionissovague,itsnowherenearChineseNDRC.
ReadbackgroundtheoryinIndianPolitybyM.Laxmikanth(4thEd.)Chapter15,41,48,49.
MockQuestions
Q1.Arrangefollowingplansincorrectchronologicalorder
1.
2.
3.
4.
Peoplesplan
BombayPlan
CongressPlan
Visvesvarayaplan
Answerchoices
A. 1234
B. 4321
C. 1243
D. 2143
Q2.MNRoywasassociatedwith_____.
A. CongressPlan
B. Peoplesplan
C. BombayPlan
D. GandhianPlan
Q3.FirstFiveyearplanwasbasedon____model
A. Mahalanobis
B. C.Subramaniam
C. JohnW.Miller
D. HarrodDomar
Q4.Findincorrectpairsofplanvsfocus:
A. 1stFYP:heavyindustries
B. 2ndFYP:Agriculture,irrigation,power
C. BothAandB
D. NeitherAnorB
Q5.Themeofthe12thFiveyearplanwas
A. Faster,Moreinclusiveandsustainablegrowth
B. Faster,Moresustainableandsustainablegrowth
C. Inclusivegrowthwithsocialjustice
D. Socialjusticeandsustainablegrowth
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Q6.iffiveyearplanningwascontinued,theperiodof13thfiveyearplanwouldbe
A. 20132018
B. 20152020
C. 20172022
D. Noneofabove
Q7.WhatisthefullformofNitiAayog?
A. NationalInstitutetoTransformIndia.
B. NationalInstituteforTransformingIndia.
C. NationalInstitutiontoTransformIndia.
D. NationalInstitutionforTransformingIndia.
Q8.NitiAayogisformedvia____.
A. Presidentialordinance
B. AllocationofbusinessrulesbyPresidentofIndia.
C. Cabinetresolution
D. Noneofabove.
Q9.Aunionministercanbecome___ofNitiAayog
1. Parttimemember
2. Exofficiomember
3. Specialinvitee
Answerchoices
A. Only1and2
B. Only2and3
C. Only1and3
D. Allofthem
Q10.FindcorrectpairsofpersonvspositionheldinNitiAayog
1. SindhushreeKhullar:Secretary
2. EconomistJagdishBhagwati:parttimemember
3. VKSaraswat:specialinvitee
Answerchoices
A. Only1and2
B. Only2and3
C. Only1and3
D. noneofthem
Q11.WhocanbecomeaparttimememberoftheNitiAayog?
A. AservingIESofficer
B. AservingIASofficer
C. Aunionminister
D. AnExpertfromResearchinstitutes
Q12.GoverningcounciloftheNitiAayogincludes
1. Primeminister
2. Financeminister
3. Chiefministersofallstates
Answerchoices
A. Only1and2
B. Only2and3
C. Only1and3
D. allofthem
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Q13.OfficialmandateoftheNitiAayogincludes___.
1. CadrecontrollingauthorityforIndianEconomicservice
2. Decideallocationoffundingamongthestates,forcentrallysponsoredschemes
3. Approvingfundsforstateplans.
Answerchoices
A. Only1and2
B. Only2and3
C. Only1and3
D. Noneofthem
Q14.MatchcorrectpairsPersonvstheirbrainchildservice
1. AllIndiaservices:Nehru
2. IndianEconomicservice:LalBahadurShashtri
3. IndianCivilservice:LordCurzon
Answerchoices
A. Only1and2
B. Only2and3
C. Only1and3
D. Noneofthem
Q15.Findstatutorybodiesamongfollowing
1. NitiAayog
2. ControllerofCertifyingauthorities
3. Atomicenergyregulationboard
Answerchoices
A. Only1and2
B. Only2and3
C. Only1and3
D. Noneofthem
Q16.Findcorrectstatements
a.
b.
c.
d.
IfModiwantstoexpandthepowersoffinancecommission,hemustamendarticle335.
IfModiwantstoimplementGST,hemustamendarticle315.
BothAandB
NeitherAnorB
UPSCMainsexamination:GeneralStudiesPaper2
Answerfollowingin150200wordseach:
1. Examinetheinadequaciesofmachineryforplanningtoensuredemocraticbutdepoliticizedplanning
processinIndianfederationsinceindependence.DiscusshowNitiAayogaimstofixthisanomaly.
2. TheplanningprocessIndiainthepostNehruperiodhasconductedtobetterCentreStaterelations,but(it
has)notnecessarilybroughtaboutdecentralizationoftheplanningprocess.CanNitiAayogfillthislacuna?
Ifnot,suggestremedialsteps.
3. InterstatecouncilandnottheNitiAayog,istheappropriateinstrumenttoensurelinkagesbetweenthe
district,theStateandtheregionallevelsofnationalplanningprocesses.Doyouagree?
4. TheultimatepictureofthedevelopmentinIndiahastobeanetworkofplanningunitsinthevillagesand
enterprises,coordinatedatsuccessivehigherlevelsbyState,whichwillultimatelyfeedtheNitiAayogat
NewDelhi.MakeoutacasefordecentralizedanddepoliticizedfederalplanninginIndia.
5. ANationalplanningbodymusthaveastatutoryorConstitutionalbacking.Examinetheargumentinfavor
andagainstsuchdesign.
6. CompareandcontrastthestructureandmandateofplanningcommissionandNitiAayog.
7. (Interview)WithoutfinancialandAdministrativepowers,NitiAayogmayendupbecomingyetanother
armchairadvisorybodylikeNAC.Doyouagree?
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URLtoarticle:http://mrunal.org/2015/01/economynitiayogplanningcommissionevolutionstructure
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