NITI Aayog

NITI Aayog, the National Institution for Transforming India, is an advisory body to the government, established through a Union cabinet resolution on January 1, 2015, replacing the erstwhile Planning Commission. It is neither a constitutional nor a statutory body.

This blog post delves into the core aspects of NITI Aayog, exploring its history, structure, objectives, functions, major initiatives, and the challenges it faces.

☰Table of Contents

Basic Facts

Established on – January 1, 2015.
Full Form – National Institution for Transforming India.
Headquarters – New Delhi.
Under the aegis of – Ministry of Planning.
Unofficial Motto of NITI Aayog – Sabka Saath, Sabka Vikas, Sabka Vishwas (Collective Efforts, Inclusive Growth, and Trust of All).
First Chairperson of NITI Aayog – Narendra Modi.
First Vice Chairman of NITI Aayog – Dr. Arvind Panagariya.
First CEO of NITI Aayog – Sindhushree Khullar.
Current Chairperson of NITI Aayog – Narendra Modi.
Current Vice Chairman of NITI Aayog – Suman Bery.
Current CEO of NITI Aayog – B.V.R. Subrahmanyam.
7 pillars of NITI Aayog – Pro-people, Pro-activity, Participation, Empowering, Inclusion of all, Equality, and Transparency.

History

The shift from the Planning Commission to NITI Aayog marked a significant paradigm change in India's governance philosophy.

The Planning Commission, established in 1950, operated on a top-down model with five-year plans and direct allocation of funds. Over time, its relevance diminished as India moved towards a more liberalized economy and greater decentralization.

Recognizing the need for a more collaborative and responsive institution, the Government of India announced the dissolution of the Planning Commission and the creation of NITI Aayog in August 2014.

The new institution was formally established on January 1, 2015, with a mandate to foster cooperative federalism, provide strategic policy advice, and act as a knowledge hub for the nation's development.

Structure of NITI Aayog

Chairperson: The Prime Minister of India is the ex-officio Chairperson.
Full-time Organizational Framework:

Vice Chairperson: Appointed by the Prime Minister, holding the rank of a Cabinet Minister.
Members (Full-time): Holding the rank of a Minister of State.
Chief Executive Officer (CEO): Appointed by the Prime Minister for a fixed tenure, holding the rank of Secretary to the Government of India.
Ex-Officio Members: Maximum of four members of the Union Council of Ministers to be nominated by the Prime Minister.
Secretariat: Comprising various verticals and divisions focusing on different sectors and themes.

Governing Council: Comprises the Chief Ministers of all States and Union Territories with Legislatures, and Lt. Governors of Andaman & Nicobar Islands, Delhi, and Puducherry. This council provides a platform for states to contribute to the formulation of national policy.
Regional Councils: Formed to address specific regional issues, comprising Chief Ministers of States and Lt. Governors of Union Territories in the region, chaired by the Chairperson of NITI Aayog or his nominee.
Special Invitees: Experts, specialists, and practitioners with relevant domain knowledge nominated by the Prime Minister.

Objectives of NITI Aayog

The core objectives of NITI Aayog are

Act as a Think Tank: Provide strategic and long-term policy frameworks, programs, and initiatives, and offer expert advice to both central and state governments.
Develop a Shared Vision of National Development: Facilitate a common understanding and shared vision for national development priorities among states and the central government.
Serve as a Knowledge and Innovation Hub: Act as a platform for good governance, best practices, research, and the diffusion of innovation across various sectors.
Foster Cooperative Federalism: Encourage the active participation of states in the formulation and implementation of national policies, recognizing that strong states make a strong nation.
Promote Competitive Federalism: Drive healthy competition among states in achieving development outcomes through transparent performance monitoring and indices.
Monitor and Evaluate Programs: Track the implementation and progress of various government schemes and initiatives to ensure effective resource utilization and outcome achievement.
Resolve Inter-Sectoral and Inter-Departmental Issues: Facilitate coordination and collaboration among different ministries and departments to address complex development challenges.
Build Capacity: Strengthen the capacity of states to formulate and implement their development plans effectively.

Major Functions of NITI Aayog

The main functions of NITI Aayog are as follows:

Policy Formulation and Strategic Planning

NITI Aayog plays a central role in the formulation of long-term policies and strategies.

Unlike the Planning Commission, which focused mainly on centrally planned economic allocations, NITI Aayog acts as a think tank for the government.

It also provides a platform for crafting comprehensive strategies across sectors like infrastructure, energy, education, healthcare, agriculture, and rural development.

For instance, the National Electric Mobility Mission Plan (NEMMP), aimed at promoting electric vehicles in India, was formulated under the guidance of NITI Aayog.

Monitoring and Evaluation of Government Programs

NITI Aayog uses a data-driven approach to evaluate and monitor the progress of various government schemes and projects. This function involves regular assessments to ensure that initiatives are on track and delivering results.

For example, programs like the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Swachh Bharat Mission are evaluated to ensure they meet their targets effectively.

While the Development Monitoring and Evaluation Office (DMEO) under NITI Aayog is tasked with performing this role, it provides critical feedback to the government.

Fostering Cooperative Federalism

NITI Aayog emphasizes the cooperative federalism model, which means fostering collaboration between the central government and state governments.

The Governing Council, comprising all Chief Ministers, Lieutenant Governors, and Union Ministers, fosters collaboration on key national issues.

Additionally, Regional Councils focus on region-specific developmental challenges, offering states an opportunity to directly engage with the Centre on matters such as resource distribution, inter-state river management, and agriculture policy.

Encouraging Innovation and Entrepreneurship

One of the significant roles of NITI Aayog is to foster innovation and entrepreneurship in India, aiming to transform the country into a knowledge-based economy.

This includes facilitating technological advancements and providing policy support for the startup ecosystem.

Atal Innovation Mission (AIM): AIM promotes innovation and entrepreneurship by supporting the creation of Incubators and Accelerators, promoting startups, and engaging students in entrepreneurship.
Startup India: NITI Aayog has played a role in driving Startup India through innovation-driven policies.

Promoting Sustainable Development Goals (SDGs)

NITI Aayog works closely with other agencies to ensure that India achieves the United Nations Sustainable Development Goals (SDGs) by 2030.

SDG India Index: NITI Aayog has developed the SDG India Index to track the country’s progress toward meeting these global goals. The index evaluates India's performance in key sectors like health, education, gender equality, and environment.

The National Action Plan on Climate Change is another example of its role in promoting sustainable development.

Facilitating Data-Driven Governance

NITI Aayog emphasizes the use of data analytics for governance, enabling evidence-based policymaking. The idea is to move from intuition-based decision-making to data-informed decisions.

Performance Tracking: Through initiatives like the Aspirational Districts Programme, data is used to measure progress on a variety of indicators in backward districts and identify areas needing urgent attention.

India Innovation Index: NITI Aayog developed this index to measure the innovation capabilities of Indian states and promote regional economic development.

National and Regional Development Initiatives

NITI Aayog is at the forefront of implementing various development programs aimed at addressing national disparities and regional imbalances.

Aspirational Districts Programme: Targets 112 backward districts in India, aiming to transform them by focusing on basic infrastructure, health, education, and nutrition.
North East Development: NITI Aayog actively promotes the development of the northeastern states, which often face unique challenges due to geography and socio-economic conditions.

Recommending Policy Reforms & Institutional Changes

NITI Aayog also plays an advisory role, recommending reforms to improve economic policies, institutional frameworks, and governance structures at various levels.

Agricultural Reforms: NITI Aayog has proposed several reforms to improve agriculture, including contract farming laws and the promotion of agri-tech solutions.
Public Sector Enterprise Reform: It advocates for strategic disinvestment in inefficient public sector enterprises.v

Major Initiatives of NITI Aayog

NITI Aayog has been instrumental in shaping numerous flagship initiatives and policies that are crucial for India's development agenda. Some of its notable contributions include:

Atal Innovation Mission (AIM)

A flagship initiative to promote a culture of innovation and entrepreneurship, including programs like Atal Tinkering Labs (ATLs) in schools to foster creativity and Atal Incubation Centres (AICs) to support startups.

Aspirational Districts Programme (ADP)

An ambitious initiative aimed at rapidly transforming 112 of the most underdeveloped districts across the country by focusing on key indicators in health & nutrition, education, agriculture & water resources, financial inclusion & skill development, and basic infrastructure.

Sustainable Development Goals (SDG) India Index

NITI Aayog is the nodal agency tasked with overseeing the adoption and monitoring of the SDGs in India, publishing an annual index that tracks the progress of states and UTs against the global goals.

'Vision 2030' of NITI Aayog is a long-term roadmap for India's development, aligning with the United Nations' Sustainable Development Goals (SDGs) and aiming for a more prosperous and sustainable future.

Its aims include ending poverty, achieving gender equality, protecting the planet, and realizing human rights.

Composite Water Management Index (CWMI)

NITI Aayog publishes this index to assess and improve water resource management practices across states and UTs.

State Health Index

A composite index that assesses the performance of states and UTs on various health outcomes and system performance.

Women Entrepreneurship Platform (WEP)

It is a comprehensive initiative launched to empower women entrepreneurs across India.

It serves as an aggregator platform, connecting women with essential resources like funding, mentorship, market linkages, and training.

WEP aims to build a robust ecosystem for women-led businesses, fostering their growth and contribution to the nation's economy.

National Data and Analytics Platform (NDAP)

Under development, this platform aims to make government data more accessible and user-friendly, promoting evidence-based policy-making.

Poshan Abhiyaan

A multi-ministerial convergence mission with a vision to address malnutrition in a targeted manner.

Electric Vehicle (EV) Promotion

NITI Aayog has been at the forefront of policy advocacy for accelerating EV adoption in India, including campaigns and strategies for sustainable mobility.

e-AMRIT Portal

The portal has been developed and hosted by NITI Aayog under a collaborative knowledge exchange programme with the UK government and as part of the UK–India Joint Roadmap 2030, signed by the Prime Ministers of the two countries.

It is a one-stop destination for all information on electric vehicles, busting myths around the adoption of EVs, their purchase, investment opportunities, policies, subsidies, etc.

Challenges faced by NITI Aayog

Despite its significant contributions, NITI Aayog faces certain challenges:

Lack of Financial Powers: Unlike the Planning Commission, NITI Aayog does not have the power to allocate funds to states, which can sometimes limit its leverage in policy implementation. Its role is primarily advisory.
Ensuring Effective Implementation: While NITI Aayog designs policies and frameworks, the ultimate responsibility for implementation lies with various ministries and state governments. Ensuring effective execution remains a challenge.
Balancing Central and State Priorities: Striking a balance between national development goals and the specific needs and priorities of individual states can be complex.
Data Availability and Quality: Reliable and timely data are crucial for evidence-based policy-making. Challenges in data collection, consistency, and quality can hinder NITI Aayog's analytical capabilities.
Overcoming Resistance to Change: Introducing new policy frameworks and pushing for reforms can sometimes face resistance from vested interests or established bureaucratic structures.
Maintaining Independence and Objectivity: As a government think tank, NITI Aayog must maintain its independence and objectivity in its research and recommendations to be truly effective.

Why In News?

NITI Aayog has been in the news recently for several key reasons, primarily revolving around India's economic performance and major policy discussions.

NITI Aayog officials, including CEO B.V.R. Subrahmanyam, have been widely quoted on India surpassing Japan to become the world's fourth-largest economy.

They also project that India is poised to displace Germany from the third rank in the next 2.5 to 3 years, highlighting the country's robust growth trajectory.

10th Governing Council Meeting

The 10th Governing Council Meeting of NITI Aayog was recently held in New Delhi, chaired by the Prime Minister.

This high-level meeting focused on the theme 'Viksit Rajya for Viksit Bharat@2047', with discussions on various aspects of national development involving Chief Ministers of states and Union Territories.

Policy Discussions and Initiatives

NITI Aayog continues to be in the news for its ongoing work in diverse policy areas. Recent reports and discussions have included topics like:

Enhancing the competitiveness of MSMEs in India.
Approval of Rs 60,000 crore Skilling Scheme and establishment of rural training hubs.
Promoting India's participation in global value chains, especially in the automotive sector.
To prepare an Investment-friendly Charter and states are urged to leverage trade deals with the UAE, UK, and Australia.
Mainstreaming climate adaptation into local development planning.
The 'NITI NCAER States Economic Forum' portal helps states raise revenues and manage debts.
Viksit Krishi Sankalp Abhiyan
Discussions on labor productivity and the need for diversification into high-value sectors.
Calls for increased private sector involvement to achieve a 'hunger-free' India.

NITI NCAER States Economic Forum

It is a significant digital initiative launched by NITI Aayog in collaboration with the National Council of Applied Economic Research (NCAER).

Its primary purpose is to serve as a centralized, comprehensive repository of data concerning the social, economic, and fiscal parameters of Indian states.

This rich dataset spans over three decades, from 1990-91 to 2022-23, drawing information from credible sources like the Census, Periodic Labour Force Survey, and RBI reports.

The portal is designed to empower policymakers, researchers, and other stakeholders by providing easily accessible and authentic data.

It features state reports summarizing macro and fiscal landscapes, a detailed data repository categorized across five key verticals (Demography, Economic Structure, Fiscal, Health, and Education), an interactive dashboard with graphical representations of economic variables, and a section for expert research and commentary on state finances.

By offering such in-depth insights and historical trends, the portal aims to foster evidence-based policy formulation, facilitate comparisons and learning among states, and enhance transparency and accountability in fiscal management across the nation.

Differences Between Planning Commission and NITI Aayog

The table below highlights the key differences between the erstwhile Planning Commission and NITI Aayog.

Feature	Planning Commission (Erstwhile)	NITI Aayog (Current)
Model	Centralized	Decentralized
Formation	March 15, 1950 (Cabinet Resolution)	January 1, 2015 (Cabinet Resolution)
Approach to Planning	Top-down (Centralized planning)	Bottom-up (Collaborative with states)
Role & Nature	An extra-constitutional body with significant executive powers; formulated Five-Year Plans.	A policy think tank or advisory body to the Government of India; no executive powers.
Funding Authority	Had the power to allocate funds to states and ministries for various programs and projects.	Does not have powers to allocate funds; this power lies with the Finance Ministry.
Role of State Governments	Limited role; states primarily participated in the National Development Council meetings.	Active and proactive participation; states are equal partners in policy formulation through the Governing Council.
Policy Imposition	Had the authority to impose policies on states and tie fund allocations to approved projects.	No authority to impose policies on states.
Focus	Primarily focused on centralized planning, resource allocation, and achieving quantitative targets in Five-Year Plans.	Focuses on cooperative and competitive federalism, strategic policy design, innovation, and outcome-based monitoring.
Composition	Had a Deputy Chairperson, Member Secretary, and full-time members; no provision for part-time members.	Includes a Vice Chairperson, CEO, full-time members, part-time members (as needed), and ex-officio members from the Union Council of Ministers.
Chairman	Prime Minister (Ex-officio Chairman)	Prime Minister (Ex-officio Chairman)
Link with States	Reported to the National Development Council (NDC), which included CMs and LTs.	The Governing Council (CMs of all states & LTs of UTs) is an integral part of NITI Aayog itself.
Long-term Vision	Formulated Five-Year Plans.	Develops a 15-year Vision Document, 7-year Strategy, and 3-year Action Agenda.

Conclusion

NITI Aayog continues to evolve, adapting to the changing socio-economic landscape of India.

Its continued focus on cooperative and competitive federalism, innovation, sustainable development, and inclusive growth will be key to unlocking India's immense potential and achieving the vision of a 'New India.'

SideNotes:

Chairman of the 16th Finance Commission – Dr. Arvind Panagariya.
Name the Malayali member of the 16th Finance Commission – Annie George Mathew.
Term of the Finance Commission – Five years.
Father of Indian Economic Planning – Sir M. Visveswaraiah.