NITI Aayog: Upgraded Version of Planning Commission

The Planning Commission, which had a 65-year legacy, has been succeeded by the NITI Aayog. For a long time, the Planning Commission’s utility and significance have been questioned. The replacement appears to be more relevant and sensitive to the country’s current economic demands and situation.

NITI Aayog Evolution

On January 1, 2015, the NITI Aayog was established. In Sanskrit, the term “NITI” refers to morals, behavior, and guidance, among other things. However, in this context, it refers to policy, and NITI is an acronym for “National Institution for Transforming India.” It is the country’s principal policymaking body and is anticipated to promote the country’s economic growth. Its objective is to establish a strong state that will contribute to the development of a vibrant and robust nation. This enables India to establish itself as a prominent economy on the global stage. The NITI Aayog was established with two hubs: the “Team India Hub” and the “Knowledge and Innovation Hub.”

  1. Team India is in charge of coordinating the participation of Indian states and the central government.
  2. The Knowledge and Innovation Hub develop a think tank’s capabilities within an institution.

Additionally, NITI Aayog is establishing itself as a State-of-the-Art Resource Center, equipped with the necessary resources, expertise, and abilities to move quickly, accelerate research and innovation, provide critical policy vision to the government, and manage unforeseen difficulties. The NITI Aayog was established because citizens had expectations of growth and progress in the administration as a result of their participation. This needs administrative reforms and proactive strategy alterations capable of seeding and fostering significant scale change.

Composition of Niti Aayog

  • Chairperson: Prime Minister
  • Vice-Chairperson: To be appointed by Prime-Minister
  • Governing Council: Chief Ministers of all states and Lt. Governors of Union Territories.
  • Regional Council: To address specific regional issues, Comprising Chief Ministers and Lt. Governors Chaired by Prime Minister or his nominee.
  • Adhoc Membership: 2 members in ex-officio capacity from leading Research institutions on a rotational basis.
  • Ex-Officio membership: Maximum four from Union council of ministers to be nominated by Prime minister.
  • Chief Executive Officer: Appointed by Prime-minister for a fixed tenure, in the rank of Secretary to Government of India.
  • Special Invitees: Experts, Specialists with domain knowledge nominated by Prime-minister.

NITI Aayog Hubs

  1. Team India Hub acts as an interface between States and centers.
  2. Knowledge and Innovation Hub builds the think-tank acumen of NITI Aayog.

The Aayog planned to come out with three documents — 3-year action agenda, a 7-year medium-term strategy paper, and a 15-year vision document. 

7 pillars of effective governance envisaged by NITI Aayog

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Overview of NITI AAYOG | Image Source: Internet 

The 7 pillars of successful governance are the foundation of the NITI Aayog. They are as follows:

  1. Pro-people: it satisfies both societal and individual objectives
  2. Proactivity: anticipating and responding to the needs of citizens.
  3. Participation entails the involvement of the general public.
  4. Empowering: Empowering people, especially women, in all parts of their lives.
  5. Inclusion of all: regardless of caste, creed, or gender, all people are included.
  6. Equality: ensuring that all people, particularly young people, have equal access to opportunities.
  7. Transparency: Increasing the visibility and responsiveness of government


  • The 65-year-old Planning Commission had become obsolete. It was once necessary for a command economy structure but is no longer necessary.
  • India is a diverse country, and each of its states is at a different stage of economic development, with its own set of strengths and weaknesses.
  • A one-size-fits-all approach to economic planning is obsolete in this context. It is incapable of restoring India’s competitiveness in today’s global economy.


  • To promote cooperative federalism on a continuous basis through structured support initiatives and mechanisms with the States, recognizing that strong states result in a strong nation.
  • To establish mechanisms for developing credible plans at the village level and gradually consolidate them at higher levels of government.
  • To ensure that, in areas specifically referred to, national security interests are incorporated into economic strategy and policy.
  • To pay particular attention to segments of our society that may be at risk of not benefiting sufficiently from economic progress.
  • To advise and facilitate collaborations between key stakeholders and like-minded think tanks on a national and international scale, as well as educational and policy research institutions.
  • To establish a system of knowledge, innovation, and entrepreneurial support through the collaboration of national and international experts, practitioners, and other stakeholders.
  • To provide a forum for the resolution of cross-sectoral and cross-departmental issues in order to expedite the development agenda’s implementation.
  • To operate a cutting-edge Resource Center, to serve as a repository for research on good governance and best practices in sustainable and equitable development, and to assist in their dissemination to stakeholders.


The NITI Aayog must prioritize from a long list of 13 objectives while keeping a clear grasp on the differences between policy, planning, and strategy to demonstrate its policymaking prowess.
NITI Aayog demands a wide range of budgetary flexibility, not just in terms of planned and unplanned spending, but also in terms of revenue and capital expenditure, because a faster rate of increase in capital expenditure can remove infrastructure deficiencies at all levels of the economy.

Difference between NITI Aayog and Planning Commission

There are many similarities and differences between NITI Aayog and Planning Commission. Here are some differences on the basis of organization, planning, relation with states, and many more factors.


Planning Commission — Was chaired by a deputy chairperson and included full-time members. The usual procedure is used to appoint secretaries or member secretaries.

NITI Aayog — New Secretary-level CEO and Vice-Chairperson positions. There will be five full-time and two part-time members. Ex-officio members will include four cabinet ministers. CEO is selected directly by Prime Minister


  • The planning commission favors top-down government planning using public-sector resources.
  • NITI Aayog is responsible for developing a national development strategy in a market economy that is integrated into a globalized world.

Relation with States

  • The planning commission was a federal government agency with no state government representation. For interaction with states, there was no structural mechanism.
  • NITI Aayog provides a collaboration with state governments to develop cooperative federalism. It gives you a place to interact with states in a structured and regular way.


  • With the introduction of the Planning Commission, the Finance Commission’s position was significantly diminished. The Planning Commission was responsible for allocating monies.
  • NITI Aayog has no involvement in allocating funds. The finance ministry is responsible for allocating taxes to states, allocating funds to CSS (Centrally Sponsored Schemes), and assisting states with their plans.

Constituent Assembly and Reporting

  • The Planning Commission reported to the National Development Council, which was comprised of State Chief Ministers and Lieutenant Governors.
  • The Governing Council of Niti Aayog is comprised of State Chief Ministers and Lieutenant Governors.

Criticism of Niti Aayog

  • As with the planning commission, it is an ad hoc body that is not accountable to parliament.
  • Without consulting the states, the planning commission was disbanded.
  • Lieutenant Governors, not chief ministers, represent UTs. This is contrary to federalism’s ideas.
  • Funding for welfare schemes may be impacted. For instance, gender budgeting has been reduced by 20%.


NITI Aayog will work in close collaboration, consultation, and coordination with the Central and State Government Ministries. While it will give recommendations to the Central and State Governments, the Central and State Governments will be responsible for making and executing decisions. NITI Aayog would attempt to support and empower the critical requirements of good governance – that is, the government that is people-centric, participatory, collaborative, transparent, and policy-driven.

It will give crucial strategic direction and feedback to the development process, with an emphasis on deliverables and outcomes. Along with acting as an incubator and disseminator of new ideas and concepts for development, this will be NITI Aayog’s primary role.