The Planning Commission and NITI Aayog are two key institutions in India’s economic planning and policy formulation landscape, each playing distinct roles at different times in the country’s history.
Planning Commission
Establishment and Role:
- Establishment: The Planning Commission was established in 1950 by a Cabinet resolution, with Prime Minister Jawaharlal Nehru as its first Chairman.
- Role: The primary role of the Planning Commission was to formulate Five-Year Plans and annual plans to guide India’s economic and social development. It set targets for various sectors, allocated resources, and monitored plan implementation.
Functions:
- Formulation of Plans: Drafting Five-Year Plans (e.g., First Five-Year Plan 1951-56) outlining strategies for industrialization, agriculture, infrastructure, and social sectors.
- Resource Allocation: Allocating funds and resources to states and sectors based on developmental priorities and targets.
- Monitoring and Evaluation: Monitoring plan implementation, assessing progress, and recommending corrective measures.
Example:
During its tenure, the Planning Commission played a crucial role in India’s development, guiding the country through phases of rapid industrialization, agricultural modernization, and social welfare expansion. For example, the Green Revolution initiated in the 1960s to boost agricultural productivity was a direct outcome of planning commission policies.
NITI Aayog
Establishment and Role:
- Establishment: NITI Aayog (National Institution for Transforming India) was established on January 1, 2015, through a Government resolution to replace the Planning Commission.
- Role: NITI Aayog serves as a policy think tank and a strategic body that provides inputs on policy matters to the central and state governments. Unlike the Planning Commission, it does not allocate funds or formulate Five-Year Plans.
Functions:
- Policy Formulation: Providing strategic and technical advice to the government on key policy issues, economic reforms, and development priorities.
- Cooperative Federalism: Promoting cooperative federalism by fostering better center-state relations and facilitating state-specific development strategies.
- Monitoring and Evaluation: Monitoring the implementation of central government schemes and programs, evaluating their impact, and suggesting improvements.
Example:
NITI Aayog has been instrumental in recommending policy reforms across various sectors, promoting initiatives such as Atal Innovation Mission to foster entrepreneurship and innovation, and Health Index to assess and improve the performance of states in the health sector.
Comparison
- Nature: Planning Commission was a centralized planning body with a directive role, while NITI Aayog operates as a policy think tank with a consultative and advisory role.
- Approach: Planning Commission focused on top-down planning and resource allocation, whereas NITI Aayog emphasizes bottom-up policy formulation and cooperative federalism.
- Flexibility: NITI Aayog has greater flexibility in responding to dynamic economic challenges and policy needs compared to the rigid planning framework of the Planning Commission.
Conclusion
The transition from the Planning Commission to NITI Aayog reflects India’s evolving governance framework and approach to economic planning. While the Planning Commission played a critical role in India’s early development, NITI Aayog represents a shift towards decentralized planning, innovation-driven policymaking, and cooperative federalism. Both institutions have shaped India’s economic policies and development strategies, contributing to the country’s progress and aspirations for inclusive and sustainable growth in the global economy.
