Unit-2: Planned Development Sub-Unit: ‘NITI Aayog’

CBSE RESOURCE MATERIAL

After independence, a Planning Commission based on socialist model was formed for
the planned development of India. But in the era of globalization, especially in the 21st
century, it was becoming ineffective and irrelevant, particularly in terms of coping with
the pressing challenges of development. Hence, during his Independence Day speech
on 15 August 2014, Prime Minister Narendra Modi talked about the abolition of the
Planning Commission. NITI Aayog was constituted in place of the Planning Commission
on 1 January 2015 with the objective of providing the necessary and technical advice to
the Union Government regarding policy making at the Central and State levels. The
Prime Minister of India is the ex-officio Chairman of NITI Aayog and he appoints the
Vice Chairperson of NITI Aayog. The first Vice Chairperson of NITI Aayog was Arvind
Panagariya. Dr Rajiv Kumar is the current Vice Chairperson of NITI Aayog. To
harmonize the interests of national security and economic policy and to prepare a
strategic and long-term framework of policy and program, NITI Aayog acts as a think
tank of the Union Government. By adopting a ‘Bottom-Up Approach’, the NITI Aayog
acts in the spirit of cooperative federalism as it ensures equal participation of all states
in the country.

POINTS TO REMEMBER:
1. In the era of globalization, the socialist model Planning Commission, was becoming
ineffective and irrelevant in coping with the pressing challenges of development. Hence,
NITI Aayog was constituted in place of the Planning Commission on 1 January
2015.

2.The Prime Minister of India is the ex-officio Chairman of NITI Aayog & he
appoints the Vice Chairperson of NITI Aayog. The first Vice Chairperson of NITI Aayog
was Arvind Panagariya. Dr Rajiv Kumar is the current Vice Chairperson of NITI
Aayog.

OBJECTIVES/ FUNCTIONS:
3.The objective of providing the necessary and technical advice to the Union
Government regarding policy making at the Central and State levels.

4. NITI Aayog acts as a think tank of the Union Government, to harmonize the
interests of national security and economic policy and to prepare a strategic and
long-term framework of policy and program.
By adopting a ‘Bottom-Up Approach’, the NITI Aayog acts in the spirit of cooperative
federalism as it ensures equal participation of all states in the country. It will help to
improve centre- state relations and foster involvement of State Governments in the
economic policy making process of the country.
 Additional Reading Material
CONSTITUTION AND COMPOSITION OF NITI AAYOG

National Institution for Transforming India, also known as NITI Aayog, was formed via a
resolution of the Union Cabinet on 1 January 2015. NITI Aayog is the premier policy think tank
of the Government of India, providing directional & policy inputs. Apart from designing strategic
& long-term policies and programmes for the Government of India, NITI Aayog also provides
relevant technical advice to the Centre, states & Union Territories (UTs). NITI Aayog acts as the
quintessential platform for the Government of India to bring states to act together in national
interest, and thereby fosters cooperative federalism, recognizing that strong states make a
strong nation. On 6 June 2019, the Prime Minister approved the reconstitution of NITI Aayog.

The NITI Aayog comprises the following:

● The Prime Minister as the Chairperson.
● A Governing Council composed of Chief Ministers of all the States and Union
territories with Legislatures and lieutenant governors of Union Territories (except
Delhi and Pondicherry)
● Regional Councils composed of Chief Ministers of States and Lt. Governors of
Union Territories in the region to address specific issues and contingencies
impacting more than one state or a region.
● Full-time Members- Full time organizational framework composed of a
Vice-Chairperson, full-time members, part-time members (from leading
universities, research organizations and other relevant institutions in an ex-officio
capacity), ex-officio members of the Union Council of Ministers, a Chief Executive
Officer (with the rank of Secretary to the Government of India) who looks after
administration, and a secretariat.
● Experts and specialists in various fields.

PRESENT COMPOSITION OF NITI AAYOG

1. Chairperson: Shri Narendra Modi, Prime Minister of India

2. Vice Chairperson: Dr Rajiv Kumar

3. Chief Executive - Mr Amitabh Kant

4. Governing Council: All Chief Ministers of States (and Delhi and Puducherry),
Lieutenant Governor of Andaman & Nicobar Islands and Administrators of UTs.

5. Full-Time Members:
(i) Dr V K Saraswat (Scientist, Ex DG of DRDO)

(ii) Dr Ramesh Chand (Agricultural expert)

(iii) Dr V K Paul (Public Health Expert -Former, HOD,Pediatrics, AIIMS)

6. Ex-officio Members:

(i) Shri Rajnath Singh, Minister of Defense

(ii) Shri Amit Shah, Minister of Home Affairs Minister of Cooperation

iii) Smt. Nirmala Sitharaman, Minister of Finance and Minister of Corporate Affairs

(iv) Shri Narendra Singh Tomar, Minister of Agriculture and Farmers Welfare

7. Special Invitees:

(i) Shri Nitin Jairam Gadkari, Minister of Road Transport and Highways

(ii) Shri Thaawarchand Gehlot, Minister of Social Justice and Empowerment

(iii) Shri Piyush Goyal, Minister of Commerce and Industry; Minister of Consumer
Affairs, Food and Public Distribution; and Minister of Textiles

(iv) Shri Rao Inderjit Singh, Minister of State (Independent Charge) of the Ministry of
Statistics and Programme Implementation; Minister of State (Independent Charge) of
the Ministry of Planning; and Minister of State in the Ministry of Corporate Affairs

OBJECTIVES OF NITI AAYOG To evolve a shared vision of national development

priorities, sectors and strategies with the active involvement of states, NITI Aayog works
towards the following objectives:

• 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 the government.

• To ensure, in 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 learnt 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 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.

POLICY AND PROGRAMME FRAMEWORK

1. Transformation of Aspirational Districts Programme

2. Nutrition Sector Reforms

3. Health Sector Reforms

4. Agriculture Sector Reforms

5. Higher Education Reforms

6. Energy Sector Reforms

7. Transforming India’s Gold Market

NITI Aayog’s entire gamut of activities is divided into two main hubs:
Team India Hub and Knowledge and Innovation Hub. The two hubs are at the core of NITI’s
efficient functioning. T

A- The Team India Hub carries out the mandate of fostering cooperative federalism and
designing policy and programme frameworks. It provides requisite coordination and support
framework to NITI Aayog in its engagement with the states.

B- The Knowledge and Innovation Hub ensures fulfillment of the mandate of maintaining a
state-of-the-art resource centre; to be a repository of research of good governance and best
practices and their dissemination to stakeholders; and to provide advice and encourage
partnerships across key stakeholders, including colleges, universities, think tanks and
non-governmental organizations at home and abroad.

COOPERATIVE FEDERALISM

NITI Aayog has been constituted to actualize the important goal of cooperative federalism and
to enable good governance in India to build a strong nation state.

Two key features of cooperative federalism are:

(1) joint focus on the National Development Agenda by the Centre and states

(2) advocacy of concerns & issues of states & union territories with Central ministries.

Decentralized Planning

Restructure the planning process into a bottom-up model, empowering States, and guiding
them to further empower local governments; in developing mechanisms to formulate credible
plans at the village level, which are progressively aggregated up to the higher levels of
government.

Vision & Scenario Planning

Design medium and long-term strategic frameworks of the big picture vision of India’s future -
across schemes, sectors, regions and time; factoring in all possible alternative assumptions and
counterfactuals. These would be the drivers of the national reforms agenda, especially focused
on identifying critical gaps and harnessing untapped potentialities. The same would need to be
intrinsically dynamic with their progress and efficacy constantly monitored for necessary mid-
course recalibration; and the overall environment (domestic and global) continuously scanned
for incorporating evolving trends and addressing emerging challenges.

Capacity building

Enable capacity building and technology up-gradation across government, benchmarking with
latest global trends and providing managerial and technical knowhow.

Differences between NITI Aayog and Planning Commission.

A- Planning Commission was an advisory body, and so is NITI Aayog. But the key difference
between them is that while the former had powers to allocate funds to ministries and
states; this function will now be of the finance ministry.

B- NITI Aayog is essentially a think tank and a truly advisory body. The Planning
Commission had eight full-time members. But NITI Aayog's number of full-time members
could be fewer than the Planning Commission. In NITI Aayog Number of part-time members
may be more, depending on the need from time to time. The Planning Commission had no
provision for part-time members. The Planning Commission reported to the National
Development Council that had state Chief Ministers and Lieutenant Governors.

C- Policy was formed by the Planning Commission and states were then consulted about
allocation of funds. In NITI Aayog, consultation with states is undertaken while making
policy and deciding on funds allocation.

D- In the Planning Commission, States' role was limited to the National Development
Council and annual interaction during Plan meetings. In NITI Aayog, State governments
are expected to play a more significant role than they did in the Planning Commission.

Secretaries or member secretaries were appointed through the usual process in the
Planning Commission. Secretaries to be known as the CEO and to be appointed by the
Prime Minister in the NITI Aayog.

Achievements/ accomplishments of NITI Aayog

NITI Aayog has stated achievements in some of the areas mentioned below:
1. In innovation and entrepreneurship
2. Infrastructure and Energy sector
3. Cooperative Federalism
4. Agricultural Development
5. Digitalization Movement
6. Increase in FDI
 NATIONAL DEVELOPMENT COUNCIL
The National Development Council (NDC) or Rashtriya Vikas Parishad is the
apex body for decision making and deliberations on development matters in India,
presided over by the Prime Minister.
It was set up on 6 August 1952 to strengthen and mobilize the effort and
resources of the nation in support of the Five Year Plans made by the Planning
Commission, to promote common economic policies in all vital spheres, and to
ensure the balanced and rapid development of all parts of the country.
The Council comprises the Prime Minister, the Union Cabinet Ministers, Chief
Ministers of all States or their substitutes, representatives of the Union Territories
and the members of the NITI Aayog (erstwhile Planning Commission).
NDC (National Development Council) has been proposed to be abolished. But till
date no resolution has been passed to abolish it. Since the inception of NITI
Aayog's Governing Council (which has almost the same composition and roles as
NDC), the NDC has had no work assigned to it nor did it have any meetings.
During the tenure of former Prime Ministers Atal Bihari Vajpayee and Manmohan
Singh it was felt that the Planning Commission has outlived its life and needs
some reform. In 2014, Prime Minister Narendra Modi announced the Planning
Commission's abolition and created NITI Aayog through an executive resolution. It
is neither a constitutional body nor a statutory body..

Background of NDC

The first meeting was chaired by Prime Minister, Jawaharlal Nehru on 8–9 November
1952. So far 57 meetings have been held. The 57th Meeting of the National
Development Council was held on 27 December 2012.

Objectives:

It has been set up with four objectives

1. to secure cooperation of the states in the execution of the plan

2. to strengthen and mobilize the effort and resources of the nation in support of
the Plan

3. to promote common economic policies in all vital spheres and

4. to ensure balanced and rapid development of all parts of the country.

Functions:
The functions of the Council are

1. to prescribe guidelines for the formulation of the National Plan, including the
assessment of resources for the Plan;

2. to consider the National Plan as formulated by the NITI Aayog;

3. to make an assessment of the resources that are required for implementing

the Plan and to suggest measures for augmenting them.

4. To consider important questions of social and economic policy affecting

national development; and

5. to review the working of the Plan from time to time and to recommend such
measures as are necessary for achieving the aims and targets set out in the
National Plan.

6. To recommend measures for achievement of the aims and targets set out in
the national Plan.

Composition:
The National Development Council is presided over by the Prime Minister of India
and includes all Union Ministers, Chief Ministers of all the States and
Administrators of Union Territories and Members of the NITI Aayog. Ministers of
State with independent charge are also invited to the deliberations of the Council.
The secretary of the NITI Aayog is also the secretary of the NDC.
The 58th meeting of NDC
Not yet held
The 57th meeting of NDC
Held on 27 December 2012
The 56th meeting of NDC
The 56th meeting of NDC was held on 22 October 2011 to consider the 12th Plan
approach paper. The meeting was presided over by Dr Manmohan Singh, Prime
Minister of India. Dr Montek Singh Ahluwalia, was the Dy Chairman of the
Planning Commission.
 PLANNING COMMISSION

After India achieved independence, a formal model of planning was adopted, and
accordingly the Planning Commission, reporting directly to the Prime Minister of
India, was established on 15 March 1950, with Prime Minister Jawaharlal Nehru
as the Chairman.
Authority for creation of the Planning Commission was not derived from the
Constitution of India or statute; it is an arm of the Central Government of India.
The first Five-Year Plan was launched in 1951, focusing mainly on development of
the agricultural sector. Two subsequent Five-Year Plans were formulated before
1965, when there was a break because of the Indo-Pakistan conflict. Two
successive years of drought, devaluation of the currency, a general rise in prices
and erosion of resources disrupted the planning process and after three Annual
Plans between 1966 and 1969, the fourth Five-Year Plan was started in 1969.

COMPOSITION:
The composition of the Commission underwent considerable changes since its
initiation. With the Prime Minister as the ex officio Chairman, the committee had a
nominated Deputy Chairman, with the rank of a full Cabinet Minister.
Cabinet Ministers with certain important portfolios acted as ex officio members of
the Commission, while the full-time members were experts in various fields like
economics, industry, science and general administration.
Ex officio members of the Commission included the Finance Minister, Agriculture
Minister, Home Minister, Health Minister, Chemicals and Fertilisers Minister,
Information Technology Minister, Law Minister, Human Resource Development
Minister and Minister of State for Planning.
The majority of the experts in the Commission were economists, making the
Commission the biggest employer of the Indian Economic Service.

OBJECTIVES:
● To make an assessment in the material, capital and human resources of
India, including technical personnel, and investigate the possibilities of
augmenting those are related resources which are found to be deficient in
relation to the nation's requirement.
● To formulate a plan for the most effective and balanced utilisation of the
country's resources.
● To define the stages, on the basis of priority, in which the plan should be
carried out and propose the allocation of resources for the due completion
of each stage.
● To indicate the factors that tend to retard economic development.
● To determine the conditions which need to be established for the
 successful execution of the plan within the incumbent socio-political
situation of the country.

In 2014, the Narendra Modi government declared the abolition of the Planning
Commission. It was replaced by the newly formed NITI Aayog.

QUESTION AND ANSWERS BASED ON THE CONTENT IN THE TEXTBOOK

Q. When and why was the planning commission set up?

The Planning Commission was set up in March 1950 by a simple resolution of the
Government of India, with the Prime Minister as its Chairman.

It has an advisory role, and recommendations become effective only when the
union cabinet approves of it.

It became the most influential and central machinery for deciding what path and
strategy India would adopt for its development.

Q. What were the goals and objectives of the Planning Commission of

India?

The Planning Commission was set up in March 1950 by a simple resolution of the
Government of India, with the Prime Minister as its Chairman.

The resolution which set up the commission defined the scope of its work in the
following terms:

"The Constitution of India has guaranteed certain fundamental rights to the

citizens of India and enunciated certain Directive Principles of State Policy, in
particular, that the state shall strive to promote welfare of people by securing and
protecting...a social order in which justice [social economic and political]
shall...direct its policy towards securing amongst other things
1. The state shall strive to promote the welfare of the people
2. There shall be social order based on social, economic and political justice
3. That citizens, men and women equally, have the right to an adequate
means of livelihood.
4. That the ownership and control of the material resources of the community
are so distributed as best to sub serve the common good
5. That the operation of the economic system does not result in the
concentration of wealth and means of production to the common detriment.
Thus, from left to right, planning for development was the most obvious choice for
the country after Independence.

Q. The Planning Commission has now been replaced by which body?

The Planning Commission has now been replaced by NITI Aayog. The National
Institution for Transforming India, also called NITI Aayog, was formed via a
resolution of the Union Cabinet on January 1, 2015.

BIBLIOGRAPHY

https://economictimes.indiatimes.com/news/economy/policy/the-end-of-five-year-p
lans-all-you-need-to-know-about-this-big-policy-change/articleshow/58162236.cm
s

https://www.niti.gov.in/niti/content/functions

https://byjus.com/free-ias-prep/planning-commission-of-india/

https://en.wikipedia.org/wiki/National_Development_Council_(India)#:~:text=NDC
%20(National%20Development%20Council)%20has%20been%20proposed%20t
o%20be%20abolished.&text=Since%20the%20inception%20of%20NITI,did%20it
%20have%20any%20meetings.