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By mid-2014, India did show a quite strong mandate and a very stable government came at the Centre. We find the new government showing a renewed vigour and zeal in several areas. One such area has been its attempts at ‘redefining’ the federal polity of the country for the purpose of promoting growth and development. We see a pronounced policy shift in the direction of ‘empowering and keeping state in front’ by giving them more financial space and responsiblities.107 Keeping its promises in the direction, the government abolished the Planning Commission (PC) and replaced it by a new body—the NITI Aayog. The acronym NITI stands for National Institution for Transforming India. We see the government aspiring for the emergence of the ‘Team India’ in the new body. It will be premature to be conclusive on
this shift from “Planning to NITI” (as the government calls). Even an academic comparison between the old and the new bodies will also not serve enough purpose as it needs some time when the outcome of the change will be available. Judegemnts on this shift will be only good once it is done after some period of time. In the meantime, India remains a planned economy. The discussion given here is mainly based on the documents and releases which came out from the GoI before and after the NITI Aayog was set up (January 1, 2015). In these documents, the government has not only provided the reasons as why does India need to go in for a new body, but charts out a very encouraging and out of tradition role/function for the new body. An attempt has been made to closely follow the ‘government line’ of thinking so that the ‘spirit’ of it is lost.
The government aims at ‘transforming the development agenda of India’ with the help of the NITI Aayog and has given a slogan, ‘from planning to NITI’. India has undergone a paradigm shift over the past six decades—politically, economically, socially, technologically as well as demographically. The role of the government in national development has seen a parallel evolution. Keeping with these changing times, the government decided to set up the NITI Aayog as a means to better serve the needs and aspirations of the people of India. The government thinks the new institution to function as a catalyst to the developmental process—nurturing an overall enabling environment, through a holistic approach to development going beyond the limited sphere of the public sector and the GoI, which will be built on the foundations of:
(i) An empowered role of states as equal partners in national development; operationalising the principle of Cooperative Federalism.
(ii) A knowledge hub of internal as well as external resources, serving as a repository of good governance best practices, and a Think Tank offering domain knowledge as well as strategic expertise to all levels of the government.
(iii) A collaborative platform facilitating Implementation; by monitoring progress, plugging gaps and bringing together the various ministries at
the Centre and in states, in the joint pursuit of developmental goals.
The government agrees that the Planning Commission has served India well. However, India has changed dramatically over the past 65 years at multiple levels and across varied scales. These transformatory forces have changed the very contours of India—highlighted by the government document in the five areas:
1. Demographic shift: India’s population has increased over three-fold to reach 121 crores. This includes an addition of over 30 crore people to Urban India. As well as an increase of 55 crore youth (below the age of 35), which is more than one and a half times the total population of the country then. With increasing levels of development, literacy and communication, the aspirations of the people have soared, moving from scarcity and survival to safety and surplus. Today, we are looking at a completely different India, and country’s governance systems need to be transformed to keep up with the changing India.
2. Economic shift: India’s economy has undergone a paradigm shift. It has expanded by over a hundred times, going from a GDP of Rs. 10,000 crore to Rs. 100 lakh crore at current prices, to emerge as one of the world’s largest economics. Agriculture’s share in the GDP has seen a dramatic drop, from more than 50 per cent to less than 15 per cent. The plan size of Rs. 43 lakh crore of the 12th Plan dwarfs the plan size of Rs. 2,400 crore of the 1st Plan. Priorities, strategies and structures dating back to the time of the birth of the Planning Commission, must thus be revisited. To align with this shift and sheer scale, India needs to overhaul the very nature of the planning processes, the government says.
3. Shift in the private sector: The nature of the Indian economy, and the role of the government in it, has undergone a paradigm shift. Driven by an increasingly open and liberalised structure, India’s private sector has matured into a vibrant and dynamic force. The sector is not operating just at the international cutting edge, but also with a global scale and reach. This changed economic landscape requires a new administrative paradigm in which the role of the government must evolve from simply
allocating resources in a command and control eco system, to a far more nuanced one of directing, calibrating, supporting and regulating a market eco system. National development must be seen beyond the limited sphere of the ‘Public Sector’. Government must, thus, transition from being a ‘provider of first and last resort’ and ‘major player’ in the economy, to being a ‘catalyst’ nurturing an ‘enabling environment’, where the entrepreneurial spirits of all, from small self-employed entrepreneurs to large corporations, can flourish. This importantly, frees up the government to focus its precious resources on public welfare domains such as essential entitlements of food, nutrition, health, education and livelihood of vulnerable and marginalised groups of the society.
4. Forces of globalisation: In recent decades, the world at large has also evolved. We live today in a ‘global village’, connected by modern transport, communications and media, and networked international markets and institutions. In this milieu, India’s economic actions ‘contribute’ to the global dynamics, while our economy also get influenced by the happenings far away from us. The framework of policy making together with the functioning of governments need to incorporate the realities of our continuing integration with the global economic system.
5. Role of the states: Indian states have evolved from being mere appendages of the Centre, to being the actual drivers of national development. The development of states must thus become the national goal, as the nation’s progress lies in the progress of states. As a consequence, the one-size-fits-all approach, often inherent in centralised planning, is no longer practical or efficient. States need to be heard and given the flexibility required for effective implementation. The government quotes Dr. B. R. Ambedkar to bring the point home: “it is unreasonable to centralise powers where central control and uniformity is not clearly essential or is impracticable”. Thus, while emanating from global experiences and national synergy, India’s strategies need to be calibrated and customised to local needs and opportunities.
6. Technology paradigm: Technology advancements and information access have unleashed the creative energy of India. They have integrated
our varied regions and ecosystems in an interlinked national economy and society, opening up newer avenues of coordination and cooperation. Technology is also playing a substantial role in enhancing transparency as well as efficiency, holding the government more accountable. Thus, India needs to make it central to systems of policy and governance.
The above-given changes have been recognised by the experts for years now. With changing contours of the economy, the institutions guiding the economy should also change. The government quotes several such instances when appropriate changes were advised in the Planning Commission by the experts, committees, even the PC, among others:
(i) The 8th Plan (1992–97) document (the very first after the reform process commenced in 1991) categorically stated that, as the role of the government was reviewed and restructured, the role and functions of the PC too needed to be rethought. The PC also needed to be reformed to keep up with changing trends, relieving itself of the old practices and beliefs, which had lost relevance, and adopting new ones based on past experiences of India as well as other nations. Specifically, the PC needed to be in tune with the process of economic reforms.
(ii) The Standing Committee on Finance of the 15th Lok Sabha observed in its 35th Report on Demand for Grants (2011–12) that the “PC has to come to grips with the emerging social realities to re-invent itself to make itself more relevant and effective for aligning the planning process with economic reforms and its consequences, particularly for the poor”. This was the need of making the planning process relevant to the process of economic reforms.
(iii) The former Prime Minister, Dr. Manmohan Singh, in his farewell address to the PC (April 2014), also urged reflection on ‘what the role of the PC needs to be in this new world. Are we still using tools and approaches which were designed for a different era? What additional roles should the Planning Commission play and what capacities does it need to build to ensure that it continues to be relevant to the growth process?” This observation has quite high relevance, as Dr. Singh is
himself a “noted” economist.
Taking the clues for a change, the government quotes Mahatma Gandhi before going for the change: “Constant development is the law of life, and a man who always tries to maintain his dogmas in order to appear consistent drives himself into a false position”. The government adds further, keeping true to this principle our institutions of governance and policy must evolve with the changing dynamics of the new India, while remaining true to the founding principles of the Constitution of India, and rooted in our Bharatiyata or wisdom of our civilizational history and ethos. It was, in every sense, a kind of pledge to devise India’s own means, methods, tools and approaches to promote development.
For the government, the NITI Aayog is to be the institution to give life to these aspirations (discussed above). The Aayog is being formed based on extensive consultation across a spectrum of stakeholders, including inter alia state governments, relevant institutions, domain experts and the people at large.
With the process of maturity and deepening in Indian nationhood, the country has embraced a greater measure of pluralism and decentralisation. This necessitates a paradigm shift in Central government’s approaches to the governments in the state, as well as at the local levels. The states governments and the local bodies must be made equal partners in the development process through the following changes:
(i) understanding and supporitng their developmental needs and aspirations,
(ii) incorporating varied local realities into national policies and programmes with the required flexibility.
This way the new body, NITI Aayog, is designed to live up to the principle of ‘Team India’ with its following officially demarcated functions:
1. Cooperative and Competitive Federalism: It will be the ‘primary platform’ for operationalising cooperative federalism, enabling states to have active participation in the formulation of national policy, as well as achieving time-bound implementation of quantitative and qualitative
targets through the combined authority of the Prime Minister and the Chief Ministers. This will be by means of systematic and structured interactions between the Union and state governments, to better understand developmental issues, as well as forge a consensus on strategies and implementation mechanisms. The above would mark the replacement of the one-way flow of policy from centre-to-state, with a genuine and continuing Centre-State partnership. The Aayog is supposed to further this cooperation with the enhanced vibrancy of Competitive Federalism; the Centre competing with the states and vice versa, and the states competing with each other, in the joint pursuit of national development.
2. Shared National Agenda: It will ‘evolve’ a shared vision of national development priorities and strategies, with the active involvement of the states. This will provide the framework ‘national agenda’ for the Prime Minister and Chief Ministers to implement.
3. State’s Best Friend at the Centre: It will support states in addressing their own challenges, as well as building on strengths and comparative advantages. This will be through various means, such as coordinating with ministries, championing their ideas at the Centre, providing ‘consultancy’ support and ‘building capacity’.
4. Decentralised Planning: The new body is to ‘restructure’ the planning process into a ‘bottom-up model’, empowering states, and guiding them to further empower local governments in developing mechanisms to formulate credible plans at the village level, which are progressively aggregated up the higher levels of the government. The maturing of India’s governmental institutions has enabled increasing the specialisation of their functions. There is, thus, a need to separate as well as energise the distinct ‘strategy’ element of governance from the usual ‘process’ and ‘implementation’ element. As a dedicated ‘Think Tank’ of the government, NITI Aayog will carry out this ‘directional’ role, strategically charting the future of the nation. It will provide specialised inputs—strategic, functional and technical—to the Prime Minister and the government (Centre as well as the state), on matters critical to the fulfillment of the national development agenda. It means, the new body is to function like a ‘think tank’.
5. Vision & Scenario Planning: To ‘design’ medium and long-term strategic frameworks of the big picture vision of India’s future—across schemes, sectors, regions and time; factoring in all possible alternative assumptions and counterfactuals. These would be the ‘drivers of the national reforms agenda’, especially focussed on identifying critical gaps and harnessing untapped potentialities. The same would need to be intrinsically dynamic with their progress and efficacy constantly monitored for necessary mid-course recalibration; and the overall environment (domestic and global) continuously scanned for incorporating evolving trends and addressing emerging challenges. This would mean a fundamental transition from merely planning for where the nation’s money goes, to planning where we want the nation to go. And given its unique position as the aggregator and integrator of all developmental initiatives of the Government of India and the states, the new body would be ideally suited for the same.
6. Domain Strategies: To ‘build’ a repository of specialised domain expertise, both sectoral and cross-sectoral; to assist ministries of the Central and state governments in their respective development planning, as well as problem solving needs. This will especially enable the imbibing of good governance best practices, both national as well as international, especially with regards to structural reforms in the country.
7. Sounding Board: To be an ‘in-house sounding board’ whetting and refining government positions, through objective criticisms and comprehensive counter-views in the economy.
8. Network of Expertise: To ‘mainstream’ external ideas and expertise into government policies and programmes through a collaborative community of national and international experts, practitioners and other partners. This would entail being government’s link to the outside world, roping in academia (universities, think tanks and research institutions), private sector expertise, and the people at large, for close involvement in the policymaking process. To bring the point home, the document quotes the Rigveda – ‘let us welcome noble thoughts flowing in from all directions’.
9. Knowledge and Innovation Hub: The body to be an ‘accumulator’ as well
as ‘disseminator’ of research and best practices on good governance, through a state-of-the-art Resource Centre which identifies, analyses, shares and facilitates replication of the same. The document further adds, an increasingly mature Indian population has steadily increased the focus on, and demand for, actual delivery and results. To keep up with such enhanced aspirations, the new body will have the mandate to go beyond mere planning and strategising, to facilitating implementation of the development agenda as well. This would involve making implementation central to the planning process, through an emphasis on tangible outcomes, realistic targets, strict time lines and robust monitoring and evaluation—a transition from the isolated conceptualisation of merely ‘planning’, to ‘planning for implementation’. It will also act as a ‘catalyst’ to the government machinery at large—filling gaps, enhancing capabilities and de-clogging bottlenecks, as and where required.
10. Harmonisation: To ‘facilitate harmonisation’ of actions across different layers of the government, especially when involving cross-cutting and overlapping issues
across multiple sectors through: communication, coordination, collaboration and convergence among all stakeholders. The emphasis will be on bringing all together on an integrated and holistic approach to development.
11. Conflict Resolution: To provide a ‘platform’ for mutual resolution of inter-sectoral, inter-departmental, inter-state as well as centre-state issues; facilitating consensus acceptable and beneficial to all, to bring about clarity and speed in execution.
12. Coordinating interface with the World: It will be the ‘nodal point’ for strategically harnessing global expertise and resources in India’s developmental process—coming in from across nations, multi-lateral institutions and other international organisations.
13. Internal Consultancy: It will offer an internal ‘consultancy’ function to Central and state governments on policy and programme design— providing frameworks adhering to basic design principles such as decentralisation, flexibility and a focus on results. This would include specialised skills such as structuring and executing PPPs.
14. Capacity Building: To enable ‘capacity building’ and ‘technology up- gradation’ across governments, benchmarking with latest global trends and providing managerial and technical knowhow.
15. Monitoring and Evaluation: It will ‘monitor’ the implementation of policies and programmes, and ‘evaluate’ their impact; through rigorous tracking of performance metrics and comprehensive programme evaluations. This will not only help identify weaknesses and bottlenecks for necessary course-correction, but also enable data-driven policymaking; encouraging greater efficiency as well as effectiveness.
The government document has categorically pointed out the very ‘purpose’ of the new body —in the process of carrying out its functions, the Aayog will be guided by an overall vision of development which is inclusive, equitable and sustainable. The instituion is to follow a strategy of empowerment built on human dignity and national self-respect—the document quote Swami Vivekanada to emphasise this: “to encourage everyone in his struggle to live up to his own highest idea”. The new body to follow a development model which is all round, all pervasive, all inclusive and holistic.
Antyodaya: To prioritise service and upliftment of the poor, marginalised and downtrodden, (the document quotes the idea of ‘Antodaya’ as articulted by Pandit Deendayal Upadhyay). Development is incomplete and meaningless, if it does not reach the farthest individual. “Nothing is more dreadfully painful than poverty” (the centuries old sage-poet Tiruvallur has been quoted).
Inclusion: To empower vulnerable and marginalised sections, redressing identity-based inequalities of all kinds—gender, region, religion, caste or class—the document quoted from Sankar Dev—“to see every being as equivalent to one’s own soul is the supreme means (of attaining deliverance)”. Weaker sections must be enabled to be masters of their own fate, having equal influence over the choices the nation makes.
Village: To integrate our villages into the development process, to draw on the vitality and energy of the bedrock of our ethos, culture and sustenance.
Demographic Dividend: To harness our greatest asset, the people of India, by focussing on their development, through education and skilling, and their empowerment, through productive livelihood opportunities.
People’s Participation: To transform the developmental process into a people-driven one, making an awakened and participative citizenry—the driver of good governance. This includes our extended Indian family of the non-resident Indian community spread across the world, whose significant geo-economic and geo-political strength must be harnessed.
Governance: To nurture an open, transparent, accountable, pro-active and purposeful style of governance, transitioning focus from Outlay to Output to Outcome.
Sustainability: Maintain sustainability at the core of our planning and developmental process, building on our ancient tradition of respect for the environment.
The Aayog will be a lean organisation, modelled as a network of expertise, focusing on functionality, flexibility and domain knowledge, with the following ‘structure’ and ‘mechnaism’:
(i) Chairman: the Prime Minister of India (de-facto).
(ii) Governing Council: will comprise the Chief Ministers of all states and Lt. Governors of union territories.
(iii) Regional Councils: will be formed to address specific issues and contingencies impacting more than one state or region. Strategy and planning in the Aayog will be anchored from state-level; with regional councils convened by the Prime Minister for identified priority domains, put under the joint leadership of related sub-groups of states (grouped around commonalities which could be geographic, economic, social or otherwise) and central ministries. The regional councils will have the following features:
(a) Will have specified tenures, with the mandate to evolve strategy and oversee implementation.
(b) Will be jointly headed by one of the group Chief Ministers (on a
rotational basis or otherwise) and a corresponding Central Minister.
(c) Will include the sectoral central ministers and secretaries concerned, as well as state ministers and secretaries.
(d) Will be linked with corresponding domain experts and academic institutions.
(e) Will have a dedicated support cell in the Aayog’s secretariat.
(iv) Special Invitees: It will have experts, specialists and practitioners with relevant domain knowledge as special invitees nominated by the Prime Minister.
(v) Full-time Organisational Framework: In addition to PM as its Chairman it will comprise:
(a) Vice-Chairperson—to be appointed by the PM.
(b) Members: all as full-time.
(c) Part-time Members: maximum of 2, from leading universities, research organisations and other relevant institutions in an ex-officio capacity. Part time members will be on a rotational basis.
(d) Ex-Officio Members: maximum of 4 members of the Union Council of Ministers to be nominated by the PM.
(e) Chief Executive Officer: to be appointed by the PM for a fixed tenure, in the rank of Secretary to the Government of India.
(f) Secretariat: as deemed necessary.
Specialised Wings in the NITI Aayog
The Aayog will house a number of specialised ‘Wings’, as per the government document:
(i) Research Wing: It will develop in-house sectoral expertise as a dedicated think tank of top notch domain experts, specialists and scholars.
(ii) Consultancy Wing: It will provide a market-place of whetted panels of expertise and funding, for Central and state governments to tap into; matching their requirements with solution providers, public and private,
national and international. By playing match-maker instead of providing the entire service itself, NITI Aayog will be able to focus its resources on priority matters, providing guidance and an overall quality check to the rest.
(iii) Team India Wing: It will comprise representatives from every state and ministry and will serve as a permanent platform for national collaboration. Each representative in this Wing will:
(a) Ensure every state/ministry has a continuous voice and stake in the Aayog.
(b) Establish a direct communication channel between the state/ministry and the Aayog for all development related matters, as the dedicated liaison interface.
A national “Hub-Spoke” institutional model will be developed, with each state and ministry encouraged to build dedicated mirror institutions, serving as the interface of interaction. These institutions, in turn, will nurture their own networks of expertise at the state and ministry level. NITI Aayog will function in close cooperation, consultation and coordination with the ministries of the Central government, and state governments. While it will make recommendations to the Central and state governments, the responsibility for taking and implementing decisions will rest with them.
The Aayog will seek to facilitate and empower the critical requirement of good governance, which is people-centric, participative, collaborative, transparent and policy-driven. It will provide critical directional and strategic input to the development process, focussing on deliverables and outcomes. This, along with being as incubator and disseminator of fresh thought and ideas for development, will be the core mission of NITI Aayog. The document, at the end, quotes from Chanakya to emphasise the importance and need of good governance – “good governance is at the root of a nation’s wealth, comfort and happines”.
This way, the idea of the NITI Aayog looks not only ‘innovative’ in its approach but contemporary, too—imaginatively forging into the emerging
idea and need of ‘happiness’ (as being sponsored by the UNO in the World Happiness Report). It gives a call for inclusion of ethos and cultural elements of India in the development model, delicatedly linking the issue of growth and development to the ‘behavioural’ dimensions of the people of India (rightly in sync with the recent proposition of the World Bank in its World Development Report 2015). We find several such shining ‘stars’ in the newly set up body, which will be surely analysed and discussed again and again by analysts, experts, scholars. At the end, we can wisely conclude that the erstwhile PC was aimed at serving some purposes which was suitable for the old time, while the current times require us to carry on the legacy to a new level where we can build India, which can combine and integrate the energy and potential of all who belong to the nation being all open to the world (agreeing categorically to the idea of globalisation).