NITI Aayog

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MIZORAM UNIVERSITY

Home Assignment on Ph.D Course Work


Contemporary Issues of Indian Economy (ECO/CW/03)

NITI Aayog - Roles & Organizational Setting


• Introduction
• Composition
• Objectives
• Seven Pillars
• Differences with Planning Commission
• Arguments
• Way Forward
• Conclusions

Submitted by
C. Vanlalthazuala
Eco/Ph.D-CW/22/01
INTRODUCTION
The government of India established the NITI (National Institution for Transforming India)
Aayog as replacement for the Planning Commission on January 1, 2015 with Arvind Panagariya as its
Vice Chairman. Prime Minister will be the Chairman as was in the case of Planning Commission. NITI
Aayog is a policy think tank of the Government of India and aims to involve the States in policy
making in India. It will be providing strategic and technical advise to the Central and State government
by adopting bottom up approach rather than the traditional top down approach of the Planning
Commission. Explaining the necessity of creating NITI Aayog, Finance Minister Arun Jaitley stated
that, “The 65-years old Planning Commission had become a redundant organisation. It was relevant in
a command economy structure, but not any longer. India is a diversified country and its States are in
various phases of economic development alongwith their own strengths and weaknesses. In this
context, a ‘one size fits all’ approach to economic planning is obsolete. It cannot make India a
competitive in today’s global economy”.
NITI Aayog will never plan, rather it will formulate policy. By following these policies, various
Ministries of the Central Government will prepare developmental projects considering the need of long
term development. NITI is in favour of cooperative federal structure where both the Centre and States
jointly prepare developmental policies. But NITI, at the same time, wants to promote healthy
competition among the developing states.
The propulsive concept behind the new body would be “co-operative federalism” entailing that
the states to have their say in framing plans and policies for development. The NITI Aayog has been
envisaged as a kind of inclusive think-tank embracing the Centre and States to give strategic and
technical advice on economic matters of national and global importance. NITI Aayog will have
regional councils to focus on developmental activities on specific areas and is patterned on the National
Reforms Development Commission of China. Its primary job would be to undertake long term policy
and design frameworks and take necessary initiatives for attaining faster development and finally to
monitor these activities sincerely. Thus, NITI Aayog will actively monitor and evaluate
implementation of the Government programmes and initiatives.
NITI Aayog would therefore mean:
• A group of people with authority entrusted by the government to formulate/regulate policies
concerning transforming India.
• It is a commission to assist government in both social and economic issues.
• It is an institute of think tank with experts in it.
• It is a body to actively monitor and evaluate implementation of government programmes and
initiatives.
COMPOSITION
The NITI Aayog comprises the following members and bodies:
• Chairperson: Prime Minister
• Vice-Chairperson: To be appointed by Prime-Minister
• Governing Council: Chief Ministers of all states and Lt. Governors of Union Territories.
• Regional Council: To address specific regional issues, Comprising Chief Ministers and Lt.
Governors Chaired by Prime Minister or his nominee.
• Adhoc Membership: 2 member in ex-officio capacity from leading Research institutions on
rotational basis.
• Ex-Officio membership: Maximum four from Union council of ministers to be nominated by
Prime minister.
• Chief Executive Officer: Appointed by Prime-minister for a fixed tenure, in rank of Secretary
to Government of India.
• Special Invitees: Experts, Specialists with domain knowledge nominated by Prime-minister.
Shri Suman Bery is currently Vice Chairperson, NITI Aayog, in the rank and status of a Cabinet
Minister. An experienced policy economist and research administrator, Mr Bery took over as NITI
Aayog Vice Chairperson from 1st May 2022.
Current Minister of State (IC) is Rao Inderjit Singh, MP Hon'ble MoS (IC) MoSPI, Planning,
and MoS for Corporate Affairs.
Mr Parameswaran Iyer is the Chief Executive Officer of NITI Aayog. He is a member of the
Indian Administrative Service, Uttar Pradesh Cadre, 1981 batch.
Team NITI also consist of three full time members- Dr. V.K. Saraswat (former DRDO Chief),
Prof. Ramesh Chand (Agriculture Expert) and Dr. V. K. Paul (Public Health expert)

OJBECTIVES
• To evolve a shared vision of national development priorities, sectors and strategies with the
active involvement of States.
• 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 government.
• To ensure, on 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 learned 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 the 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.

SEVEN PILLARS OF NITI AAYOG


• Pro–people: This pillar explains that it fulfills the aspirations of society as well as individuals.
It had been taken into consideration while planning for society.
• Proactivity: It focuses more on forecasting and responding to citizens’ needs than other things.
• Participation: NITI Aayog is made for the democratic country of India, which gives
democratic rights to every citizen so that the participation of every citizen is taken while
preparing for any strategy.
• Empowering: It gives respect to women also. It is empowering to men and women both in all
its aspects.
• Inclusion of all: It does not differentiate between people due to their caste and creed. It gives
the same respect to all people irrespective of caste, creed, and gender.
• Equality: NITI Aayog is established on equality. It gives everyone an opportunity, especially
our youth, due to their innovative mindset.
• Transparency: Transparency makes the government visible and responsive. So, NITI Aayog
is fully transparent and has shown all its work.
DIFFERENCES
NITI AAYOG PLANNING COMMISSION
1 It serves as an advisory Think Tank. It served as extra-constitutional body.
2 It draws membership from a wider
It had limited expertise.
expertise.
3 It serves in spirit of Cooperative States participated as spectators in annual
Federalism as states are equal partners plan meetings.
4 Secretaries to be known as CEO appointed
Secretaries were appointed through usual
by Prime-Minister. Recently, Parmeswaran
process.
Iyer became the CEO of NITI Aayog.
5 It focuses upon ‘Bottom-Up’ approach of
It followed a ‘Top-Down’ approach.
Planning.
6 Imposed policies on states and tied
It does not possess mandate to impose
allocation of funds with projects it
policies.
approved.
7 It does not have powers to allocate funds, It had powers to allocate funds to
which are vested in Finance Minister. ministries and state governments.

ARGUMENTS AGAINST NITI AAYOG


• A deeply unequal society cannot be transformed into a modern economy by the NITI Aayog,
that ensures the welfare of all the citizens, irrespective of their social identity.
• NITI Aayog has no role in influencing private or public investment.
• NITI Aayog does not seem to influence policy-making with long-term consequences. For
example, demonetization and Goods and Services Tax.
• If NITI Aayog is a think-tank, it should be maintaining a respectable intellectual distance from
the government. Instead, what we see is uncritical praise of the Government-sponsored
schemes and programs.
• NITI Aayog has not been able to answer some specific questions, like why 90% of the workers
are still working in an unorganized sector? And more informalisation is taking place in an
organized sector.
• Women’s labour force participation rate is also decreasing when our neighbours like
Bangladesh are registering an increase in women’s labour participation.
• Though things are working in the NITI Aayog, but not with the pace that is required, which
should not be the case.
• To make it relevant, NITI Aayog has been bestowed with too many powers but bestowing too
many powers in a single body is not a good idea for governance.
• The work of NITI Aayog includes to keep listening to the demands of the states and fulfil their
needs which NITI Aayog has not been able to do till now.
• The intention behind setting up NITI Aayog was to encourage participation in the economic
policy and public involvement, it has done neither.
• The prime minister himself is of the view that the NITI Aayog has not been able to do enough
in promoting initiatives like Swachh Bharat Mission, Make in India, and smart city projects in
the states.
• It does not have the power to analyze the performance of various government schemes.

WAY FORWARD
• If a strategy has to be implemented by the NITI Aayog within a planning framework in India,
two major changes in the structure of governance are required. First, within a five-year plan
framework planning should become more decentralized. Second, bureaucracy will have to be
changed from generalist to specialist, and its accountability should be based on the outcome
achieved and not on the input or money spent.
• NITI Aayog should govern as to how to implement these reforms.
• If NITI Aayog succeeds, it could emerge over time as an agent of change and contribute to the
government’s agenda of implementing innovative measures and improving governance for the
better delivery of public services.
• NITI Aayog with its unique and vibrant work culture remains an integral as well as a relevant
component of the government’s schemes to put in place a transparent, efficient, innovative,
and accountable governance system in the country.
• Equipping the planning body with requisite powers so that it can effect change
• Allocation of adequate resources
• NITI AYOG could be made legally accountable to the legislature for its inability to meet the
targets. This would bring in more accountability
• Ensure the planning body remains a non-partisan institution

CONCLUSIONS
NITI Aayog facilitates and empowers the critical requirements of good governance. It contains
seven pillars that show that it takes into consideration the aspirations of society and individuals both.
It gives a chance to every citizen to participate and collaborate with each process of NITI Aayog. Its
work is transparent, which shows that the government is more visible and responsive. It provides
critical directions and strategic input to the development process. It gives more focus on delivery,
outcome, and accountability.
Reference:
• Indian Economy, V.K. Puri et.al., Himalayan Publishing House.
• Essay on NITI Ayog in India | Economic Planning, Sromona Jain (Essay on NITI Ayog in India
| Economic Planning (economicsdiscussion.net)).
• NITI Aayog (National Institution for Transforming India) (NITI Aayog (drishtiias.com)).
• National Portal If India- NITI Aayog (| NITI Aayog).
• NITI Aayog (Niti Aayog : UPSC Note on Niti Aayog by Unacademy).
• NITI Aayog: A Success or a Failure, Vanya Verma (NITI Aayog: A Success or a Failure
(ipleaders.in)).
• NITI Aayog (issue and challenges) (NITI Aayog (issue and challenges) - INSIGHTSIAS
(insightsonindia.com)).

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