The bodies associated with economic planning in India have undergone a significant structural shift, moving from the centralized [[Planning Commission]] to the contemporary [[NITI Aayog]].
1. The Planning Commission (1950–2014)
The Planning Commission was established on March 15, 1950, through a Union Cabinet resolution as an advisory body.
- Structure: The [[Prime Minister]] served as the Chairman, while a full-time Deputy Chairman acted as the executive head with the rank of a cabinet minister. The National Development Council (NDC) served as its governing council.
- Core Objectives: Its primary mandate was to promote a rapid rise in the standard of living by efficiently exploiting national resources and formulating Five-Year Plans (FYPs).
- Powers: It possessed the power to decide the amount of money the Union should give to each state for implementing centrally sponsored schemes and their respective five-year plans.
- Key Issues: Over time, it was criticized for being an extra-constitutional body that acted as a “super cabinet,” infringing on the federal character of the nation. It followed a “one size fits all” top-to-bottom approach and was often hampered by bureaucratic domination and political pressures.
2. NITI Aayog (2015–Present)
The National Institution for Transforming India (NITI Aayog) replaced the Planning Commission on January 1, 2015, to meet the modern requirements of India’s economy.
- Role: It functions as a policy think-tank and an advisory organization. Unlike its predecessor, it provides directional and technical advice but does not have the power to allocate funds to state governments.
- Composition:
- Chairperson: The [[Prime Minister]].
- Governing Council: Includes the Chief Ministers of all states and Lieutenant Governors of Union Territories, fostering cooperative federalism.
- Full-time Framework: Includes a Vice-Chairperson (appointed by the PM), members with the rank of Minister of State, and a Chief Executive Officer (CEO).
- Core Functions: It focuses on a “bottom-up” model of decentralized planning and evolving a shared national agenda with active state involvement. It also manages specialized wings for research, consultancy, and national collaboration (Team India Wing).
- Pillars of Governance: Its operations are based on seven pillars: pro-people, pro-active, participative, empowering (especially women), inclusion of all groups, equality for youth, and transparency.
Summary of Differences
| Feature | Planning Commission | NITI Aayog |
|---|---|---|
| Approach | Top-to-bottom (Centralized) | Bottom-up (Decentralized) |
| Mandate | Formulated Five-Year Plans | Drafts 3-year agendas, 7-year strategies, and 15-year visions |
| Financial Power | Allocated funds to states | No power to allocate funds (Finance Ministry/Commission does this) |
| Role of States | States had a limited say in expenditure | States are active partners through the Governing Council |