Niti Aayog at two: It is performing vital functions that are fundamentally different from the Planning Commission
Niti Aayog turned two years old yesterday. The anniversary offers an opportunity to reflect on how the new institution differs from its predecessor, the Planning Commission, and what functions it performs.
Two key activities of the Planning Commission had been to prepare and implement the Five Year Plans and to allocate financial resources to states. Neither of these activities forms a part of the mandate of Niti Aayog. The Twelfth Five Year Plan, which will conclude on March 31 this year, will be India’s last Five Year Plan.
Likewise, Niti Aayog does not allocate any financial resources to states. The 14th Finance Commission raised the share of states in the divisible pool from 32% to 42%, leaving no additional funds for allocation to states through Niti Aayog. The annual resource allocation exercise that brought state chief ministers to the doorstep of the Planning Commission is now a thing of the past.
Among many functions that Niti Aayog performs, three stand out: promotion of cooperative, competitive federalism; assisting the central government in policy making; and serving as the government’s thinktank. These three functions complement each other instead of being mutually exclusive.