What is the difference between the 'Planning Commission' and 'NITI Aayog'?

Points to Remember:

Establishment: Planning Commission (PC) was established in 1950; NITI Aayog in 2015.
Nature: PC was a government body; NITI Aayog is a policy think tank.
Approach: PC followed a centralized, top-down approach; NITI Aayog promotes a cooperative, bottom-up approach.
Role: PC focused on plan formulation and allocation of resources; NITI Aayog focuses on policy and program implementation.
Governance: PC was chaired by the Prime Minister; NITI Aayog is also chaired by the Prime Minister but with a more collaborative structure.

Introduction:

India’s approach to economic planning has undergone a significant transformation with the replacement of the Planning Commission (PC) by the NITI Aayog (National Institution for Transforming India) in 2015. The PC, established in 1950, played a crucial role in India’s post-independence development, guiding resource allocation and shaping economic policy through Five-Year Plans. However, criticisms regarding its centralized, command-and-control approach and lack of flexibility led to its eventual dissolution. NITI Aayog was conceived as a more collaborative and dynamic institution, better suited to the needs of a rapidly evolving economy.

Body:

1. Nature and Structure:

Planning Commission: The PC was a statutory body, operating under the authority of the Prime Minister. Its structure was hierarchical, with a centralized decision-making process. It primarily focused on plan formulation and resource allocation.
NITI Aayog: NITI Aayog is a non-statutory body, established by a resolution of the Union Cabinet. It has a more flexible and collaborative structure, involving representatives from states and union territories. It functions as a think tank, providing policy recommendations and facilitating cooperative federalism.

2. Approach to Planning:

Planning Commission: The PC adopted a centralized, top-down approach to planning. Five-Year Plans were formulated at the national level and implemented across states with limited state-level participation. This often led to a disconnect between national priorities and local needs.
NITI Aayog: NITI Aayog promotes a bottom-up, cooperative federalism approach. It encourages states to actively participate in policy formulation and implementation, fostering greater ownership and accountability. It emphasizes a more flexible, outcome-oriented approach to planning.

3. Functions and Responsibilities:

Planning Commission: The PC’s primary function was to formulate Five-Year Plans, allocate resources among different sectors and states, and monitor their implementation. It also played a significant role in coordinating the activities of various government ministries and departments.
NITI Aayog: NITI Aayog’s functions are broader and more diverse. It focuses on policy and program implementation, fostering innovation, promoting cooperative federalism, and providing a platform for knowledge sharing and best practice dissemination. It also plays a crucial role in monitoring the Sustainable Development Goals (SDGs).

4. Relationship with States:

Planning Commission: The relationship between the PC and states was often characterized by a hierarchical power dynamic. States had limited autonomy in plan formulation and resource allocation.
NITI Aayog: NITI Aayog emphasizes a collaborative relationship with states. It actively engages with state governments, seeking their input in policy formulation and implementation. The Governing Council of NITI Aayog, comprising the Chief Ministers of all states and Union Territories, plays a crucial role in this collaborative approach.

Conclusion:

The shift from the Planning Commission to NITI Aayog represents a significant change in India’s approach to economic planning. While the PC played a vital role in India’s early development, its centralized and inflexible approach proved increasingly inadequate in a more complex and dynamic environment. NITI Aayog, with its emphasis on cooperative federalism, bottom-up planning, and a focus on outcomes, is better equipped to address the challenges of 21st-century India. The success of NITI Aayog will depend on its ability to foster genuine collaboration among states and effectively translate policy recommendations into tangible improvements in the lives of Indian citizens. A continued focus on inclusive growth, sustainable development, and effective governance will be crucial for realizing the full potential of this institution and ensuring a holistic and equitable development trajectory for the nation.

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