ECONOMIC PLANNING
[NITI AAYOG]
FAILURES OF ECONOMIC PLANNING
No substantial increase in the standard of living
Rise in prices
Increase in unemployment
Inadequate increase in production
Inefficient administration
High capital output ratio
WHY PLANNING COMMISSION WAS ABOLISHED?
The planning process in India, particularly after liberalization, has become erratic due to
an array of reasons:
o It was focused on theoretical tools which is difficult to implement on ground.
o The planning documents generally resulted in duplication of the jobs of central
ministries.
o During the successive plan periods, the targeted goals were compromised in
most arbitrary way.
o Five year plans were not in sync with the annual budgeting exercise. Hence,
five year planning remained at best as an academic exercise.
o The plan/non-plan distinction in government expenditures has lost its relevance
and needs to go.
o The system of transfers from the center needs to be reformed. It mainly became
more of a political exercise.
o Successive governments have used the planning commission as a parking lot for
decent placement for the favorable officers and academicians.
NITI AAYOG- INTRODUCTION
On 15 August 2014, India's Prime Minister Narendra Modi declared to replace the
Planning Commission by a new body.
On January 1, 2015, the government by a resolution established the NITI Aayog or
National Institution for Transforming India.
This body would work as a policy think tank of Union Government and aims to involve
the states in economic policymaking.
Planning commission was strong enough to have a final say on resource allocation.
Most of the underdeveloped States including the North East had to suffer due to the
dogged prescription of one size fits all schemes by the planning commission.
The NITI Aayog seeks to give up the one size fits all prescriptions for a huge country like
India with lots of vertical and horizontal imbalances.
AIMS AND OBJECTIVES OF NITI AAYOG
NITI Aayog is essentially an advisory body that seeks to provide critical directional and
strategic inputs across spectrum.
It seeks to put an end to the slow and tardy implementation of the policy by fostering
inter-ministry, inter-state and Centre-state coordination.
It will foster cooperative federalism by evolving a shared vision of national
development priorities
It has been envisaged to follow the bottom-up development approach.
It would also pay attention to the weaker sections of the society that may not have
benefitted from economic progress.
It would create a knowledge, innovation and entrepreneurial support system.
It would serve as a platform for resolution of inter-sectoral and inter-departmental
issues in order to accelerate the implementation of the development agenda.
It will also monitor and evaluate the implementation of programmes and focus on
technology upgradation and capacity building.
INITIATIVES TAKEN BY NITI AAYOG
Vision Document, Strategy & Action Agenda beyond 12th Five Year Plan- 15-year
vision document, 7-year strategy document spanning 2017-18 to 2023-24, 3-year Action
Agenda for 2017-18 to 2019-20
Reforms in Agriculture- Model Land Leasing Law, Reforms of the Agricultural Produce
Marketing Committee Act.
Reforming Medical Education- scrapping of the Medical Council of India and replacing it
with a new body National Medical Commission.
Digital Payments Movement.
Atal Innovation Mission- Atal Tinkering Labs (Schools),Atal Incubation Centres (Start-
ups),
Sub-Group of Chief Ministers on Rationalization of Centrally Sponsored Schemes.
Sub-Group of Chief Ministers on Swachh Bharat Abhiyan
Sub-Group of Chief Ministers on Skill Development.
Task Force on Elimination of Poverty in India.
Task Force on Agriculture Development.
Indices Measuring States Performance in Health, Education and Water Management
REPORTS AND PUBLICATIONS
1. India Innovation Index
2. School Education Quality Index
3. Composite Water Management Index
KEY DIFFERENCES BETWEEN NITI AAYOG & PLANNING COMMISSION
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 be now of finance ministry.
Niti Aayog is essentially a think tank and a truly advisory body.
The role of states in the planning commission era was limited. In NITI Aayog, it is
obvious that states are expected to have greater role and say in planning/
implementation of policies.
While the planning commission formed Central Plans. NITI Aayog will not formulate
them anymore.
It has been vested with the responsibility of evaluating the implementation of
programmes.
The provision of regional council is there in NITI Aayog to address local / regional
development issues.
The top down approach is reversed in NITI Aayog.
