Government of India

FROM PLANNING TO NITI

TRANSFORMING
INDIAS DEVELOPMENT AGENDA

FEBRUARY 8, 2015

INTRODUCTION: TRANSFORMING INDIA ...................................................................................... 2

CONTEXT: INDIA HAS CHANGED .................................................................................................... 4

Demography 4
Economy
4

Private enterprise
5
Globalisation
5
States
6
Technology
6

RATIONALE: INSTITUTIONS MUST CHANGE ................................................................................... 8

NEW ROLE: FUNCTIONS OF NITI ................................................................................................... 11
1

Cooperative and Competitive Federalism 11

Shared National Agenda

12

States Best Friend at the Centre

12

Decentralized Planning

12

Vision & Scenario Planning

12

Domain Strategies

13

Sounding Board

13

Network of Expertise

13

Knowledge and Innovation hub

13

10 Harmonization

14

11

Conflict Resolution

14

12

Coordinating interface with World

14

13

Internal Consultancy

14

14

Capacity building

14

15

Monitoring and Evaluation

14

PURPOSE: GUIDING PRINCIPLES ................................................................................................... 16

Antyodaya 16
Inclusion
16
Village
16

Demographic dividend
17

Peoples Participation
17
Governance
17
Sustainability
17

MECHANISM: STRUCTURE OF NITI ................................................................................................ 19

Chairperson 19
Governing Council
19
Regional Councils
19
Special Invitees
20
Full-time Organisational Framework
20
Research Wing
21
Consultancy Wing
21
Team India Wing
21

CONCLUSION: VEHICLE OF GOOD GOVERNANCE ........................................................................ 23

Introduction: TRANSFORMING INDIA

India has undergone a paradigm shift over the past six decades - politically, economically, socially,
technologically as well as demographically. The role of Government in national development has
seen a parallel evolution. Keeping with these changing times, the Government of India has decided
to set up NITI Aayog (National Institution for Transforming India), in place of the erstwhile Planning
Commission, as a means to better serve the needs and aspirations of the people of India.
The new institution will be a catalyst to the developmental process; nurturing an overall enabling
environment, through a holistic approach to development going beyond the limited sphere of the Public
Sector and Government of India. This will be built on the foundations of:

An empowered role of States as equal partners in national development; operationalizing the

principle of Cooperative Federalism.
A knowledge hub of internal as well as external resources; serving as a repository of good
governance best practices, and a Think Tank offering domain knowledge as well as strategic
expertise to all levels of government.
A collaborative platform facilitating Implementation; by monitoring progress, plugging gaps
and bringing together the various Ministries at the Centre and in States, in the joint pursuit of
developmental goals.
2

3
1

Context: INDIA HAS CHANGED

The Planning Commission was constituted on 15.3.1950 through a Government of India
Resolution, and has served India well.
India, however, has changed dramatically over the past 65 years. While this has been at multiple
levels and across varied scales, the biggest transformatory forces have been the following:
Demography: Our population has increased over three-fold to reach 121 crores. This includes
an addition of over 30 crore people to Urban India. As well as an increase of 55 crore youth
(below the age of 35), which is more than one and a half times the total population of the
country then. Furthermore, with increasing levels of development, literacy and
communication, the aspirations of our people have soared, moving from scarcity and survival
to safety and surplus. We are therefore looking at a completely different India today, and our
governance systems need to be transformed to keep up with the same.
Economy: Our economy has undergone a paradigm shift. It has expanded by over a hundred
times, going from a GDP of Rs 10,000 crore to Rs 100 lakh crore at current prices, to emerge
as one of the worlds largest. Agricultures share in this has seen a dramatic drop, from more
than 50% to less than 15% of GDP. And our central governments Twelfth Five Year Plan size
of Rs 43 lakh crore, dwarfs the First Five Year Plan size of Rs 2,400 crore. Priorities, strategies
and structures dating back to the time of the birth of the Planning Commission, must thus be
revisited. The very nature of our planning processes needs to be overhauled to align with this
shift in sheer scale.
4

Private enterprise: The nature of our economy, and the role of the Government in it, has
undergone a paradigm shift as well. Driven by an increasingly open and liberalized structure,
our private sector has matured into a vibrant and dynamic force, operating not just at the
international cutting edge, but also with a global scale and reach. This changed economic
landscape requires a new administrative paradigm in which the role of Government must
evolve from simply allocating resources in a command and control eco-system, to a far more
nuanced one of directing, calibrating, supporting and regulating a market eco-system. National
development must be seen beyond the limited sphere of the Public Sector. Government must
thus transition from being a provider of first and last resort and major player in the economy,
to being a catalyst nurturing an enabling environment, where the entrepreneurial spirits of
all, from small self-employed entrepreneurs to large corporations, can flourish. This
importantly, frees up the Government to focus its precious resources on public welfare
domains such as essential entitlements of food, nutrition, health, education and livelihood of
vulnerable and marginalized groups.
Globalisation: The World at large has also evolved. Today, we live in a global village, connected
by modern transport, communications and media, and networked international markets and
institutions. As India contributes to global dynamics, it is also influenced by happenings far
removed from our borders. This continuing integration with the world needs to be incorporated
into our policy making as well as functioning of government.

States: The States of the Union of India have evolved from being mere appendages of the
Centre, to being the actual drivers of national development. The development of States must
thus become the national goal, as the nations progress lies in the progress of States. As a
consequence, the one-size-fits-all approach, often inherent in centralized planning, is no
longer practical or efficient. States need to be heard and given the flexibility required for
effective implementation. Dr. B. R. Ambedkar had said with great foresight that it is
"unreasonable to centralise powers where central control and uniformity is not clearly
essential or is impracticable". Therefore, while emanating from global experiences and
national synergy, our strategies will need to be calibrated and customized to local needs and
opportunities.
Technology: Advancements in technology and access to information have unleashed the
creative energy that emerges from the Indian kaleidoscope. They have integrated our varied
regions and eco-systems in an interlinked national economy and society, opening up
newer avenues of coordination and cooperation. Technology is also playing a substantial role
in enhancing transparency as well as efficiency, holding government more accountable. It thus
needs to be made central to our systems of policy and governance.

Rationale: INSTITUTIONS MUST CHANGE

This changing reality and growing mismatch has been recognized for years now; with experts,
including many from within the erstwhile Planning Commission, recommending appropriate
changes:
The 8th Five Year Plan document - the very first after the liberalisation of 1991 - itself
categorically stated that, as the role of Government was reviewed and restructured, the role
and functions of the Planning Commission too needed to be rethought. The Planning
Commission needed to be reformed to keep up with changing trends; letting go of old practices
and beliefs whose relevance had been lost, and adopting new ones based on the past
experiences of India as well as other nations.
The Standing Committee on Finance of the 15th Lok Sabha observed in its 35th Report on
Demand for Grants (2011-12) that the Planning Commission "has to come to grips with the
emerging social realities to re-invent itself to make itself more relevant and effective for
aligning the planning process with economic reforms and its consequences, particularly for the
poor".
Former Prime Minister and noted economist, Dr. Manmohan Singh - in his farewell address
to the Commission in April 2014 - also urged reflection on "what the role of the Planning
Commission needs to be in this new world. Are we still using tools and approaches which were
designed for a different era? What additional roles should the Planning Commission play and
what capacities does it need to build to ensure that it continues to be relevant to the growth
process?"

Mahatma Gandhi had said: "Constant development is the law of life, and a man who always tries to
maintain his dogmas in order to appear consistent drives himself into a false position". Keeping true to this
principle our institutions of governance and policy must evolve with the changing dynamics of the new India,
while remaining true to the founding principles of the Constitution of India, and rooted in our Bharatiyata or
wisdom of our civilizational history and ethos.
NITI Aayog (National Institution for Transforming India) is to be the institution to give life to these
aspirations. It is being formed based on extensive consultation across the spectrum of stakeholders,
including inter alia state governments, relevant institutions, domain experts and the people at large.

10

New Role: FUNCTIONS OF NITI

As Indian nationhood has matured and deepened, we have embraced a greater measure of
pluralism and decentralization. This necessitates a paradigm shift in how the Central government
approaches governments at the State as well as local levels. They must be made equal partners in
national development. Their developmental needs and aspirations understood as well as
supported. And their varied local realities incorporated into national policies and programs, with
the required flexibility. Actualizing this principle of Team India, NITI Aayog will:

1. Cooperative and Competitive Federalism: Be the primary platform for operationalizing

Cooperative Federalism; enabling States to have active participation in the formulation of
national policy, as well as achieving time-bound implementation of quantitative and
qualitative targets through the combined authority of the Prime Minister and Chief Ministers.
This will be by means of systematic and structured interactions between the Union and State
Governments, to better understand developmental issues, as well as forge a consensus on
strategies and implementation mechanisms. The above would mark the replacement of the
one-way flow of policy from centre-to-state, with a genuine and continuing Centre-State
partnership.



11

This Cooperation would be further enhanced by the vibrancy of Competitive Federalism; with
the Centre competing with the States and vice versa, and the States competing with each
other, in the joint pursuit of national development.

2. Shared National Agenda: Evolve a shared vision of national development priorities and
strategies, with the active involvement of States. This will provide the framework national
agenda for the Prime Minister and Chief Ministers to implement.
3.

States Best Friend at the Centre: Support States in addressing their own challenges, as well
as building on strengths and comparative advantages. This will be through various means,
such as coordinating with Ministries, championing their ideas at the centre, providing
consultancy support and building capacity.

4.

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 the higher levels of government.

The maturing of Indias governmental institutions has enabled increasing the specialization of
their functions. There is thus a need to separate as well as energize the distinct strategy element
of governance from the usual process and implementation element. As a dedicated Think Tank
of the Government, NITI Aayog will carry out this directional role, strategically charting the future
of the nation. It will provide specialised inputs - strategic, functional and technical - to the Prime
Minister and the Government (Centre as well as State), on matters critical to the fulfilment of the
national development agenda.
5.

Vision & Scenario Planning: Design medium and long-term strategic frameworks of the big
picture vision of Indias 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 focussed 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.

The above would mean a fundamental transition from merely planning for where the Nations
money goes, to planning where we want the Nation to go. And given its unique position as the
aggregator and integrator of all developmental initiatives of the Government of India and
States, the NITI Aayog would be ideally suited for the same.

12

6.

Domain Strategies: Build a repository of specialized domain expertise, both sectoral and
cross-sectoral; to assist Ministries of the Central and State governments in their respective
development planning as well problem solving needs. This will especially enable the imbibing
of good governance best practices, both national as well as international; especially with
regards to structural reform.

7. Sounding Board: Be an in-house sounding board whetting and refining government positions,

through objective criticisms and comprehensive counter-views.
8.

Network of Expertise: Main-stream external ideas and expertise into government policies
and programmes through a collaborative community of national and international experts,
practitioners and other partners. This would entail being Governments link to the outside
world, roping in academia (universities, think tanks and research institutions), private sector
expertise, and the people at large, for close involvement in the policy making process. As is said
in the Rigveda-^vk uks Hkk% roks ;Urq foor%*, or, let us welcome noble thoughts flowing in
from all directions.

9. Knowledge and Innovation hub: Be an accumulator as well as disseminator of research and

best practices on good governance, through a state-of-the-art Resource Centre which

identifies, analyses, shares and facilitates replication of the same.
An increasingly mature Indian population has steadily increased the focus on, and demand for,
actual delivery and results. To keep up with such enhanced aspirations, NITI Aayogs mandate will
have to go beyond mere planning and strategizing, to facilitating Implementation of the
development agenda as well. This would involve making implementation central to the planning
process, through an emphasis on tangible outcomes, realistic targets, strict time lines and robust
monitoring and evaluation - a transition from the isolated conceptualisation of merely planning,
to planning for Implementation. Niti Aayog will also act as a catalyst to the government machinery
at large; filling gaps, enhancing capabilities and de-clogging bottlenecks, as and where required:

13

10. Harmonization: Facilitate harmonization of actions across different layers of government,

especially when involving cross-cutting and overlapping issues across multiple sectors; through

communication, coordination, collaboration and convergence amongst all stakeholders. The

emphasis will be on bringing all together on an integrated and holistic approach to
development.
11. Conflict Resolution: Provide a platform for mutual resolution of inter-sectoral,

inter-departmental, inter-state as well as centre-state issues; facilitating consensus

acceptable and beneficial to all, to bring about clarity and speed in execution.
12. Coordinating interface with the World: Be the nodal point for strategically harnessing global

expertise and resources coming in from across nations, multi-lateral institutions and other

international organisations, in Indias developmental process.
13. Internal Consultancy: Offer an internal consultancy function to central and state governments

on policy and program design; providing frameworks adhering to basic design principles such

as decentralization, flexibility and a focus on results. This would include specialised skills such

as structuring and executing Public Private Partnerships.
14. Capacity building: Enable capacity building and technology up-gradation across government,

benchmarking with latest global trends and providing managerial and technical knowhow.
15. Monitoring and Evaluation: Monitor the implementation of policies and programmes, and

evaluate their impact; through rigorous tracking of performance metrics and comprehensive

program evaluations. This will not only help identify weaknesses and bottlenecks for

necessary course correction, but also enable data-driven policy making; encouraging greater

efficiency as well as effectiveness.

14

15

Purpose: GUIDING PRINCIPLES

In carrying out the above functions, NITI Aayog will be guided by an overall vision of development
which is inclusive, equitable and sustainable. A strategy of empowerment built on human dignity
and national self-respect, which lives up to Swami Vivekanandas idea of our duty to encourage
everyone in his struggle to live up to his own highest idea. A model of development which is loZnsfkd
(all round), loZLikhZ (all pervasive), loZlekoskd (all inclusive) and lokaZxh (holistic):
Antyodaya: Prioritize service and uplift of the poor, marginalized and downtrodden, as
enunciated in Pandit Deendayal Upadhyays idea of Antyodaya. Development is incomplete
and meaningless, if it does not reach the farthest individual. In the centuries old words of
Tiruvalluvar, the sage-poet, nothing is more dreadfully painful than poverty.
Inclusion: Empower vulnerable and marginalized sections, redressing identity-based
inequalities of all kinds gender, region, religion, caste or class. As Sankar Dev wrote decades
ago: "to see every being as equivalent to ones own soul is the supreme means (of attaining
deliverance)". Weaker sections must be enabled to be masters of their own fate, having equal
influence over the choices the nation makes.
Village: Integrate our villages into the development process, to draw on the vitality and energy
of the bedrock of our ethos, culture and sustenance.

16

Demographic dividend: Harness our greatest asset, the people of India; by focussing on their
development, through education and skilling, and their empowerment, through productive
livelihood opportunities.
Peoples Participation: Transform the developmental process into a people-driven one,
making an awakened and participative citizenry the driver of good governance. This includes
our extended Indian family of the Non-Resident Indian community spread across the world,
whose significant geo-economic and geo-political strength must be harnessed.
Governance: Nurture an open, transparent, accountable, pro-active and purposeful style of
governance, transitioning focus from Outlay to Output to Outcome.
Sustainability: Maintain sustainability at the core of our planning and developmental process,
building on our ancient tradition of respect for the environment.

17

18

Mechanism: STRUCTURE OF NITI

NITI Aayog will be a lean organisation, modelled as a network of expertise; focusing on functionality,
flexibility and domain knowledge.

NITI Aayog will comprise:

Chairperson: Prime Minister of India
Governing Council: comprising the Chief Ministers of all States and Lt. Governors of
Union Territories.
Regional Councils: will be formed to address specific issues and contingencies impacting
more than one state or region. Strategy and Planning in the NITI Aayog will be anchored from
State-level; with Regional Councils convened by the Prime Minister for identified priority
domains, put under the joint leadership of related sub-groups of States (grouped around
commonalities which could be geographic, economic, social or otherwise) and Central
Ministries. Regional Councils will:

Have specified tenures, with the mandate to evolve strategy and oversee
implementation.

Be jointly headed by one of the group Chief Ministers (on a rotational basis or otherwise)

and a corresponding Central Minister.

Include the sectoral Central Ministers and Secretaries concerned, as well as State

Ministers and Secretaries.
19

Be linked with corresponding domain experts and academic institutions.

Have a dedicated support cell in the NITI Aayog Secretariat.

States would thus be empowered to drive the national agenda. As a consequence, deliberation
would be more grass-roots informed, and recommendations would have more ownership,
given their joint formulation.
Special Invitees: experts, specialists and practitioners with relevant domain knowledge as
special invitees nominated by the Prime Minister.
Full-time Organisational Framework: will comprise of, in addition to the Prime Minister as the
Chairperson:

Vice-Chairperson: to be appointed by the Prime Minister.

Members: full-time.

Part-time Members: maximum of 2, from leading universities, research organisations and

other relevant institutions in an ex-officio capacity. Part time members will be on a
rotational.

Ex-Officio Members: maximum of 4 members of the Union Council of Ministers to be

nominated by the Prime Minister.

Chief Executive Officer: to be appointed by the Prime Minister for a fixed tenure, in the
rank of Secretary to the Government of India.

Secretariat: as deemed necessary.

20

NITI Aayog will also house a number of specialised Wings, including:

Research Wing that will develop in-house sectoral expertise as a dedicated think tank of top
notch domain experts, specialists and scholars.
Consultancy Wing that will provide a market-place of whetted panels of expertise and funding,
for Central and State Governments to tap into; matching their requirements with solution
providers, public and private, national and international. By playing match-maker instead of
providing the entire service itself, NITI Aayog will be able to focus its resources on priority
matters, providing guidance and an overall quality check to the rest.
Team India Wing comprising representatives from every State and Ministry, will serve as a
permanent platform for national collaboration. Each representative will:

Ensure every State/Ministry has a continuous voice and stake in the NITI Aayog.
Establish a direct communication channel between the State / Ministry and NITI Aayog for
all development related matters, as the dedicated liaison interface.

A national Hub-Spoke institutional model will be developed, with each State and Ministry
encouraged to build dedicated mirror institutions, serving as the interface of interaction. These
institutions, in turn, will nurture their own networks of expertise at State and Ministry level.
NITI Aayog will function in close cooperation, consultation and coordination with the Ministries
of the Central Government, and State governments. While it will make recommendations to the
Central and State Governments, the responsibility for taking and implementing decisions will rest
with them.

21

22

Conclusion: VEHICLE OF GOOD GOVERNANCE

Chanakya had mapped out centuries ago how good governance was at the root of a nations wealth,
values, comfort and happiness-lq[kL; ewya /keZ% & /keZL; ewya vFkZ% & vFkZL; ewya jkT;a
NITI Aayog will seek to facilitate and empower this critical requirement of good governance, which
is people-centric, participative, collaborative, transparent and policy-driven. It will provide critical
directional and strategic input to the development process, focussing on deliverables and
outcomes. This, along with being as incubator and disseminator of fresh thought and ideas for
development, will be the core mission of NITI Aayog.

23

24

Government of India