NITI Aayog to review 12th Plan for fixing its fate

NITI Aayog to review 12th Plan for fixing its fate

Amid raging debate whether India should scrap Five Year Plans altogether, the newly constituted NITI Aayog is expected to meet soon to review the 12th plan that runs up to 2017.

“This (review of 12 th plan) will be one of the first tasks of the NITI Aayog that is expected to start functioning in a week’s time,” said a senior official.

On whether the 12th plan will continue, the official said, “A clear picture will emerge only after the review.”

In a meeting with chief ministers of states in December, Prime Minister Narendra Modi had sought their views on 12th Five Year Plan (2012-17) which is already mid-way and questions were raised whether the Nehruvian legacy should continue.

The Aayog has been mandated to serve as a policy think tank for the central as well as state governments and has the prime minister as its chairperson.

The performance of Aayog’s predecessor, the Planning Commission, has always been a topic of debate. Experts said the Five Year Plans should go along with the plan panel. They also believe that the success of some of the plans was mainly due to private-investments-led growth acceleration and a supportive global environment.

Modi, too, has said on many occasions that states should be given a free hand in determining their policies and plans.

Another topic which will be extensively debated once the Aayog starts functioning is the classification of public expenditure in terms of revenue and capital, and plan and non-plan expenditures.

Plan expenditure, also known as development expenditure, is spent on government programmes and flagship schemes, while non-plan expenditure includes spending on defence, subsidies and devolution to states. The latter is the major part of government spending.

The government has been trying for long to remove the distinction as it has become dysfunctional and an obstacle in outcome-based budgeting.

With the emphasis on NITI Aayog’s functions being more on execution, the new body may restrict itself to evaluating schemes and suggesting sectoral expenditures.

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