Event Reports

With NITI Aayog, states now have greater voice in planning, says ex-Revenue Secretary

India can now have economic forecasts with a longer and stronger vision. NITI Aayog is the tool to make it count.

Niti Aayog
Niti Aayog
Niti Aayog
Photolabs@ORF
2017
Jun
30

The nation can now have economic forecasts with a longer and stronger vision, and NITI Aayog is the tool to make it count,” according to Mr. M.R. Sivaraman, former Revenue Secretary of the Government of India.

Initiating an interaction on ‘Planning Commission and NITI Aayog’ at Observer Research Foundation, Chennai, on 17 June, Mr. Sivaraman, who also served as an Executive Director at the International Monetary Fund (IMF), distinguished the erstwhile Planning Commission and the NITI Aayog and their functions.

Unlike the Finance Commission, the Planning Commission was not a constitutional body but only an advisory body, whose members were the personal choice of the prime minister of the day. Hence elected political leaderships in states, and at times even senior ministers at the Centre, had problems ‘taking orders’ from the Planning Commission or its members, he said. Assessing the functions and contributions of the Planning Commission, which was based on the Harrod-Domar Model, focusing mainly on development of the agricultural sector, price stability, power and transport sectors, he flagged its successes and inadequacies over the past decades since Independence.

Unlike the Planning Commission, which was a plan-approval body for all governments and sectors in the country with the prime minister as the chairperson, the NITI Aayog has been conceived as the prime think tank of the Centre. Against the top-down, diktat-centric approach of the Planning Commission, states now demand and need to have greater voice in planning their expenditure. Hence, unlike the Planning Commission, the NITI Aayog has no powers to grant funds or make decisions on behalf of the states.

With this change of role in mind, the NITI Aayog flags the best practices among the states for others to emulate. It designs strategic and long-term policy and programme frameworks and initiatives, and monitor their progress and efficacy. The lessons learnt through monitoring and feedback are being used for making innovative improvements, including necessary mid-course corrections.

To this end, the NITI Aayog has a three-year plan, which is only the truncated form of the previous Five-Year Plans. It also has a seven-year strategic plan and a 15-year vision plan. Unlike the Planning Commission in ways, it also offers a platform for the resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda, said Mr. Sivaraman.

Two hubs

The NITI Aayog acts as the quintessential platform of the Centre to bring states to act together in national interest, and thereby fosters ‘cooperative federalism’. At the core of the NITI Aayog’s creation are two hubs, namely the ‘Team India Hub’ and the ‘Knowledge and Innovation Hub’. The former leads the engagement of states with the Centre and the latter builds its think tank capabilities.

The NITI Aayog is also developing itself as a state-of-the-art resource Centre, with the necessary resources, knowledge and skills, that will enable it to act with speed, promote research and innovation, provide strategic policy vision for the government, and deal with contingent issues. It develops mechanisms to formulate credible plans at the village-level and aggregate these progressively at higher levels of government.

In doing so, the NITI Aayog also seeks to create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and other partners. Even though the long-term scope of the NITI Aayog’s vision remains to be seen and proved, Mr. Sivaraman concluded that its vision is what the nation needs for the future.

This report was prepared by S. Sivanesan, Associate, Observer Research Foundation, Chennai.