On the first day of 2015, Prime Minister Narendra Modi’s twitter account announced the introduction of a new planning body named National Institution for Transforming India (NITI) Aayog that would replace the age old Planning Commission.

On the same day, a Press Note on NITI Aayog was released heralding an “evolutionary change” from the functioning of the erstwhile Planning Commission, moving from “a centre-to-state one-way flow of policy” to a “genuine and continuing partnership with the states.”

That sounds lovely, but what’s the Planning Commission?

The Planning Commission was set up by a Resolution of the Government of India in March 1950 in order to pursue the objectives declared by the government to promote a “rapid rise in the standard of living of the people”. The Commission’s responsibility was to make an assessment of all the country’s resources, elevate deficient resources, and formulate plans and determine priorities accordingly.

Well that sounds fine, so why the change?

A report backed by the government, states that “the Planning Commission was created in response to the unique challenges faced by a nascent democracy and a fledgling economy. It conceived a top down approach to planning that envisaged a dynamic Central Government building up the economic and social order of weak States.”

How is that a problem?

Well, while that approach may have worked at the time of the Planning Commission’s conception, times have changed in the 64 years since. Which is to say that India has undergone a political and economic transition. “A Planning Commission responsible only to the Prime Minister no longer enjoys the legitimacy that it enjoyed in the turbulent times in which it was created,” states the report.

Similarly, the press note states that with a change in the country’s requirements comes a need for a new government think-tank – “a directional and policy dynamo”.

“A directional and policy dynamo”? That sounds fancy, so what is NITI Aayog expected to do?

The Prime Minister tweeted that having served as a Chief Minister in the past, he knows the importance of actively consulting with State governments and NITI Aayog is expected to do just that. Modi also hopes that NITI Aayog will be more inclusive than the Planning Commission was – abandoning a “one-size fits all” policy – and adopting a body that “celebrates India’s diversity and plurality”.

But how is NITI Aayog different from the Planning Commission?

• NITI Aayog is strictly a think-tank and does not have the power to implement policies. On the other hand, the Planning Commission could implement policies.
• While the Planning Commission reported to the National Development Council that included the state Chief Ministers (CMs) and Lieutenant Governors, NITI Aayog will directly involve a governing council with the CMs and Lieutenant Governors.
• The Planning Commission allocated funds to central ministries and state governments based on the Gadgil-Mukherjee formula. NITI Aayog isn’t involved in fund allocation.
• The Planning Commission incorporated a top-down flow of policy while the adoption of NITI Aayog hopes to consolidate a state-to-centre flow of policy.
• The Planning Commission formulated Five Year Plans, NITI Aayog’s method of functioning is, as of yet, unclear.
• The Planning Commission was empowered to award states with ‘Special Category Status’. However, there’s confusion about who’s going to do that now because it hasn’t been defined as a role of NITI Aayog.
• The structures of the two bodies also differ. NITI Aayog comprises:
  Chairperson (Prime Minister),
  Governing Council (Chief Ministers of States and Lt. Governors of Union Territories), Regional Councils (formed on need basis),
  Full time members, Part time Members,
  Ex-officio Members (Maximum 4 Council of Ministers nominated by the Prime Minister),
  Special Invitees (Experts and Specialists with domain knowledge),
  Chief Executive Officer (appointed by the PM) and a Secretariat.
• The Planning Commission comprised of:
  Chairman (Prime Minister),
  Deputy Chairman,
  Members,
  Secretary,
  Deputy Secretary.
• While the members of the Planning Commission took home salaries in the range of 80K to 1.2 lakh per month, they also enjoyed perks such as petrol allowance, rent free housing, free medical treatment at government approved hospitals and more. Not much is known about the entitlements of NITI Aayog members.

Has the government announced who will be part of the new policy-making committee?

Yes, some names announced include:

Vice-Chairman: Arvind Panagariya, Economist

Full-Time Members:

Bibek Debroy, Economist

V.K. Saraswat, Former Director General of the Defence Research and Development Organisation and the Chief Scientific Advisor to the Minister of Defence.

Ex-officio Members:

Rajnath Singh- Union Home Minister

Arun Jaitley- Union Finance, Corporate Affairs and Information & Broadcasting Minister

Suresh Prabhu- Union Minister of Railways

Radha Mohan Singh- Union Minister of Agriculture

Special Invitees:

Nitin Gadkari- Union Minister of Road Transport & Highways and Shipping

Thawar Chand Gehlot-Union Minister of Social Justice and Empowerment

Smriti Zubin Irani- Union Minister of Human Resource Development (HRD)

In conclusion

Revamping the Planning Commission has been spoken about for over a decade. This is the only time a step has been taken in that direction. Cosmetic or will it be more? Watch this space.