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NITI Aayog
NITI Aayog or National Institution for Transforming India Aayog is the replacement of Planning
Commission of India, marking the end of the Nehruvian institution that pioneered Indias five-year

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planned development approach.

The primary job of the new bodydescribed as a Think-Tankwill be to advise the government on
social and economic issues. Unlike the Nehruvian plan panel, the new body will not have the power
to disburse funds to central ministries and state governments.

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National Institution for Transforming India (NITI) Aayog has been created in accordance to the
announcement made by the Prime Minister Narendra Modi on 15 August 2014. On the

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Independence Day, he announced that the government will replace the Planning Commission which
was established on 15 March 1950 through a Cabinet Resolution.

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Further to revamp the Planning Commission, the Prime Minister met with Chief Ministers and

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Governors of various States on 7 December 2014 and discussed their opinions on the same to
separate the process of governance from the strategy of governance.
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Difference between Planning Commission and NITI Aayog

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NITI Aayog aims 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. States will continue to receive support for removing bottlenecks and will be able to approach
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the new institution for consulting and capacity building. Further, the states will also tailor their plans
to suit their needs under more than 40 centrally sponsored schemes.

Instead of top down approach in planning commission, the new body will adopt a Bottom Up
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approach, where decisions will be taken at the local level and then endorsed at the Central level.
This also reflects new government's approach to develop mechanisms to formulate credible plans at
the village level and aggregate these progressively at higher levels of Government. NITI Aayog will
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also serve as a Think Tank of the Government and will provide Centre and States with relevant
strategic and technical advice across the spectrum of key elements of policy.
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The declared intent to empower states has played well as non-NDA chief ministers have also
supported the dissolution of Planning Commission.

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Composition of NITI Aayog

Chairperson: Prime Minister
Vice Chairman: Arvind Panagariya
Governing Council: CM's (States) & Lieutenant Governors (Union Territories)
Regional Councils: Formed on need-basis, incorporates CM's & Lt Governors of the region

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Members: Economist Bibek Debroy and Former DRDO Chief V.K. Saraswat
Part-Time Members: Max 2, Rotational, from relevant institutions
Ex-officio Members:Rajnath Singh, Arun Jaitley, Suresh Prabhu and Radha Mohan Singh
Special Invitees: Experts, specialists, practitioners with domain knowledge
CEO: Sindhushree Khullar

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Secretariat: If necessary

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PM will head the body and its governing council will include all chief ministers and lieutenant
governors, in line with the PM's thrust on cooperative federalism that advocates involving states in

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the Centres decision making

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Arvind Panagariya is an Indian-American economist and Professor of Economics at Columbia
University and an ex-Chief Economist at the Asian Development Bank.
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Functions
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An administration paradigm in which the Government is an "enabler" rather than a

"provider of first and last resort."
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Progress from "food security" to focus on a mix of agricultural production, as well as actual
returns that farmers get from their produce.
Ensure that India is an active player in the debates and deliberations on the global
commons.
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Ensure that the economically vibrant middle-class remains engaged, and its potential is fully
realized.
Leverage India's pool of entrepreneurial, scientific and intellectual human capital.
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Incorporate the significant geo-economic and geo-political strength of the Non-Resident

Indian Community.
Use urbanization as an opportunity to create a wholesome and secure habitat through the
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use of modern technology.

Use technology to reduce opacity and potential for misadventures in governance
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Objectives

To foster cooperative federalism through structured support initiatives and mechanisms

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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.

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To pay special attention to the sections of our society that may be at risk of not benefitting
adequately from economic progress.

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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

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corrections.

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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
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collaborative community of national and international experts, practitioners and other
partners.
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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
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governance and best practices in sustainable and equitable development as well as help
their dissemination to stake-holders.
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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.
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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
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national development agenda, and the objectives mentioned above.

The Prime Minister had recently called meeting of all chief ministers to deliberate on the
structure of the new body which would replace the Commission.
The majority view that emerged after the meeting was in favour of decentralisation of
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power.
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CONCLUSION
Congress-ruled states, however, had reservations about dismantling an institution which was set up
by the first Prime Minister Jawaharlal Nehru and they suggested restructuring of the existing body,
rather than a complete replacement.

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Incidentally, Nehru himself is said to have faced resistance to the idea of setting up of the Planning
Commission, but it went on to become a major platform for successive governments to formulate
and push forward economic policies and other development plans.

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Finance Minister had then said that a principle of 'cooperative federalism' is being followed in
setting up the new body in place of Planning Commission.

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"Our government stands by the principle of cooperative federalism, empowering states, least
number of central schemes and more state schemes," Jaitley said while replying to a debate in the
Lok Sabha.

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The Planning Commission was set up by a simple government resolution in March 1950 and has

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withstood many political and economic upheavals, as also some occasional controversies, including
those related to its poverty estimates as also about a huge toilet renovation bill and foreign tour
expenses of its last Deputy Chairman.
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The plan panel has commissioned 12 five-year plans and six annual plans involving fund outlays of
over Rs 200 lakh crore in its 65-year-history.
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