Answer:

Niti Aayog replaces the Planning Commission which was responsible for assessing national resources and drafting five-year plans for India. There are various reasons which demanded a transition to a new institution of NITI Aayog:

♤ Political character of the institution- Far from being the think-tank for providing strategic vision for the country, the Commission was reduced to a political tool of the central government for dictating the policy choices of state governments and micro managing implementation.

♤ By the mid-1960s after a series of plan failure the Planning Commission changed from an investment to a spending body. The phenomenal increase in government plans and schemes, dating to the mid-1980s, took place at the Commission’s behest and coincided with India’s looming fiscal crisis.

♤ Huge diversity of the country made centralized planning an incongruity

♤ State governments have better information about what is required at the local level

♤ Plethora of Centrally Sponsored Schemes with one size fits all approach

♤ It also served as a template for other extra-constitutional establishments (for example, the National Advisory Council) that came to lord over elected governments and states.

♤ The fall of centrally-planned economies across the world. These plans curtailed the free play of market forces, reduced opportunities for private entrepreneurship and eventually inhibited India’s growth.

♤ Direct conflict with the trend in the Finance Commission, a constitutional body unlike the Planning Commission. While each successive Finance Commission has tried to devolve greater revenues to states, the Planning Commission in turn encroached on all funds to implement Plan targets.

♤ The states had little recourse in terms of resolving the outstanding issues of conflict either with the central government or with other states.

Niti Aayog which consists of a full time organizational structure (PM as chairman and a CEO appointed by PM), also comprise a governing council which includes state chief ministers and lieutenant governors of Union territories. In this way it reflects the

changes required in India’s governance structures and provide a more active role for

the state governments in achieving national objectives.

Niti Aayog replaces the command and control structure of the planning commission and accommodates diverse view in a collaborative way as follows:

♤ By acting as a “think-tank" that will provide Governments at the central and state levels with relevant strategic and technical advice across the spectrum of key elements of policy.

♤ Ending slow and tardy implementation of policy, fostering better Inter-Ministry coordination and better Centre-State coordination. It will help evolve a shared vision of national development priorities, and foster cooperative federalism, recognizing that strong states make a strong nation.

♤ Provision to convene regional councils to address specific issues and contingencies having an impact on more than one state or a region for a specific tenure.

♤ By having full-time members and up to two part-time members from leading universities, research organizations and other relevant institutions.

♤ By fostering cooperative federalism through structured support initiatives and mechanisms with the states on a continuous basis.

♤ Developing mechanisms to formulate plans at the village level and aggregating these progressively at higher levels of government as well as offering a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate implementation of the development agenda.

♤ By creating a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and partners.