JOIN USThe replacement of the Planning Commission with a new institution, more relevant and responsive to the present economic needs and climate in the country, had long been demanded and expected.
Former prime minister Manmohan Singh had himself spoken of the need to reform and restructure the planning body.
The old-style centralised planning had lost much of its utility in an era when Five Year Plans have lost their importance in economic development, when private investment far exceeds public investment and Centre-state relations have changed considerably.
The NDA government has dissolved the commission altogether and the new body, NITI Aayog, has a new structure, mandate and functions to perform. The government has said that it will serve as a think tank and provide the Centre with strategic and technical advice on policy matters. It will also help the states with consultancy and capacity-building.
The NITI Aayog will have a three-tier structure headed by the Prime Minister, with a governing council comprising chief ministers and governors of UTs, regional councils to deal with issues relating to more than one state, and a full-time organisational framework. With a role for states, it is likely to be a more representative body than the Planning Commission.
It is intended to adopt a bottom-up approach to planning where plans made at the village and block levels contribute to the formulation of bigger plans at higher levels. This is in line with the idea of decentralisation of planning and development, and would strengthen the principle of cooperative federalism, if it is rightly implemented. There is also merit in the idea of giving the states the freedom to frame development schemes that best suit them, because the needs and levels of growth in different states are different.
While this is a good blueprint for change, there is need for more clarity on some aspects of the new body’s responsibilities and functioning. The official announcement on the setting up of the NITI Aayog is long on generalities and short on specifics.
While it may not actually formulate plans and allocate funds, like the Planning Commission used to do, it may evaluate and monitor the implementation of schemes. It is not known what the mechanism for Plan fund allocation will be, or whether the Plans will continue to exist in the same format. The working of a new institution can be judged only after it has functioned for a sufficiently long time. The ideas which are claimed to guide the NITI Aayog are sound, but it has to implement them well, and disprove criticism that it is a gimmick.