India's Prime Minister Narendra Modi has ushered in the New Year by scrapping the country's 65-year-old Planning Commission, replacing it with a new body called the NITI Aayog.



The National Institution for Transforming India (NITI) will be more of a think tank or forum, distinctly different from the bureaucratic, socialist leaning, Soviet-styled Commission.



"Since the Planning Commission has defied attempts to reform it to bring it in line with the needs of a modern economy and the trend of empowering the states, it is proposed that the Planning Commission be abolished," the Independent Evaluation Office (IEO) had said in a report last year.









The most important aspect of the Aayog, is its consultative policy-making; the inclusion of India's states in decision making. NITI will include leaders of India's 29 states and seven union territories. But its full-time staff - its deputy chairman, chief executive and experts - will answer directly to India's Prime Minister.



Modi made the announcement of the Aayog on his Twitter account:





Delighted to introduce NITI (National Institution for Transforming India) Aayog. It will provide key inputs on various policy matters. — Narendra Modi (@narendramodi) January 1, 2015

NITI Aayog will emerge as an active &important institution that will play a pivotal role in India's development journey in the years to come — Narendra Modi (@narendramodi) January 1, 2015

NITI Aayog has been formed after a wide range of consultation with the various stakeholders including the Chief Ministers. — Narendra Modi (@narendramodi) January 1, 2015

A landmark change is the inclusion of all State CMs & LGs of UTs in the NITI Aayog. This will foster a spirit of cooperative federalism. — Narendra Modi (@narendramodi) January 1, 2015

Having served as a CM in the past, I am very much aware of the importance of actively consulting the states. NITI Aayog does precisely that. — Narendra Modi (@narendramodi) January 1, 2015

Through NITI Aayog, we bid farewell to a 'one size fits all' approach towards development. The body celebrates India's diversity & plurality — Narendra Modi (@narendramodi) January 1, 2015

A pro-people, pro-active & participative development agenda stressing on empowerment & equality is the guiding principle behind NITI Aayog. — Narendra Modi (@narendramodi) January 1, 2015

Who will comprise the NITI Aayog?

The Governing Council will comprise the Chief Ministers of all the States and Lt. Governors of Union Territories.

Regional Councils will be formed to address specific issues and contingencies impacting more than one state or a region. These will be formed for a specified tenure. The Regional Councils will be convened by the Prime Minister and will comprise of the Chief Ministers of States and Lt. Governors of Union Territories in the region. These will be chaired by the Chairperson of the NITI Aayog or his nominee.

The Vice-Chairperson of NITI will be appointed by the Prime Minister.

Part-time members will have a maximum of two members from leading universities research organizations and other relevant institutions in an ex-officio capacity. Part time members will be on a rotational basis.

There will be a maximum of four ex-officio members: these will comprise the Union Council of Ministers to be nominated by the Prime Minister.

The Chief Executive Officer (CEO) of NITI will be appointed by the Prime Minister for a fixed tenure, in the rank of Secretary to the Government of India. If needed, a Secretariat might also be appointed.

Among others, the NITI Aayog will work towards the following objectives:

To develop mechanisms to formulate credible plans at the village levels

To ensure 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 benefitting adequately from economic progress

To design and monitor the progress of strategic and long term policy initiatives

To encourage partnerships between key stakeholders and like-minded Think Tanks

To create a knowledge, innovation and entrepreneurial support system

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 repository of research on good governance and best practices in sustainable and equitable development

To actively monitor and evaluate the implementation of various programmes and initiatives

To focus on technology upgradation and capacity building for implementation of programmes and initiatives

The Planning Commission was set up on the 15th of March, 1950 through a Cabinet Resolution.But a lot has changed in the country since then.



The Commission was responsible for allocating central funds to states and sanctioning capital spending of the central government. It also facilitated the critical co-ordination between ministries by aligning their priorities, and laying our long-term policies.





This was a sore point because it did not allow flexibility for the states and various government departments to use the money as per their development needs.



In recent times, the Commission had also received flak for being out of touch with ground realities. In 2012, it was slammed for spending Rs 35 lakhs to renovate two office toilets. It was also criticized for setting the poverty lines at ridiculously low levels.



What is the Opposition saying?









Opposition parties have been quick to label the NITI Aayog as "gimmicry", accusing that it is nothing but fluff.

“Mere name change from Yojana Aayog to NITI Aayog is not objectionable if coupled with real reform. Else, it is purely a cosmetic change, like naming ceremonies,” said Congress party spokesperson Abhishek Manu Singhvi.

The foul cry from Congress is understandable. The Fabian socialist-leaning Planning Commission, based on Feldman-Mahalanobis model of economic development, was the initiative of India's first Prime Minister Jawaharlal Nehru.

“If government wants to greet people with fluff and not substance on the first day of 2015, then there is nothing more that can be said…. If the North Block or the Finance Ministry have a very short-term view of both fiscal and monetary objective, is going to be the final arbiter between the states and the Centre….



“It being the stake holder in the process, I am afraid, is going to discriminate against the states,” Congress spokesperson Manish Tewari said, according to PTI.



“After all, what was the Planning Commission doing? It used to plan policy. So by changing the nomenclature from Planning Commission to Neeti Ayog, what is the message this government is trying to send,” the added.









Story continues