Q11. How are the principles followed by NITI Aayog different from those followed by the erstwhile planning commission in India?

Model Answer:

Introduction

The NITI Aayog (National Institution for Transforming India) was established in 2015 to replace the Planning Commission, which was set up in 1950. While both institutions aimed at fostering economic growth and development in India, their principles and operational frameworks differ significantly. 

Body

1. Approach to Planning

  • Planning Commission:
    • Emphasized centralized planning with a top-down approach.
    • Formulated five-year plans focusing on resource allocation, target setting, and detailed project designs.
    • Primarily focused on public sector investment and government-led initiatives.
  • NITI Aayog:
    • Adopts a cooperative federalism approach with a bottom-up model.
    • Encourages states to play a more significant role in planning and policy formulation.
    • Promotes participatory governance, emphasizing stakeholder engagement and public-private partnerships.

2. Focus on Outcomes

  • Planning Commission:
    • Concentrated on inputs and outputs with limited emphasis on outcomes.
    • Evaluation of plans was largely based on achieving targets set in five-year plans without a robust framework for assessing the impacts on society and the economy.
  • NITI Aayog:
    • Shifts focus towards outcomes and impacts rather than just outputs.
    • Implements a system of monitoring and evaluation that emphasizes the effectiveness of programs in terms of social and economic outcomes.
    • Introduces performance-based funding and incentives for states based on their achievements.

3. Policy Formulation

  • Planning Commission:
    • Acted as an advisory body to the government, with significant bureaucratic involvement.
    • Policy formulation was often lengthy, involving extensive consultations within government departments but limited involvement from external stakeholders.
  • NITI Aayog:
    • Functions as a policy think tank, focusing on innovative policy solutions.
    • Involves multiple stakeholders, including the private sector, civil society, and experts, in the policy-making process.
    • Encourages flexibility and adaptability in policy frameworks, allowing for quick responses to emerging challenges.

4. Economic Growth and Development Paradigm

  • Planning Commission:
    • Emphasized growth-oriented strategies with an industrialization focus.
    • Primarily concerned with economic planning and development through the lens of national priorities, often neglecting social aspects.
  • NITI Aayog:some text
    • Adopts a more holistic development approach, incorporating sustainable development, social equity, and environmental concerns.
    • Focuses on job creation, skill development, and improving living standards through inclusive growth strategies.

5. Role and Structure

  • Planning Commission:
    • A governmental body with a fixed structure and hierarchy.
    • Was viewed as a centralized authority for planning, with decisions taken at higher levels without much room for regional input.
  • NITI Aayog:
    • An independent think tank with a more flexible structure.
    • Encourages a collaborative approach among states and between various stakeholders, allowing for regional solutions to local problems.

6. Data and Research Orientation

  • Planning Commission:
    • Relied heavily on traditional data sources and statistical analyses.
    • Limited focus on real-time data, making it difficult to adapt plans to changing circumstances.
  • NITI Aayog:
    • Emphasizes the use of data analytics and research for informed decision-making.
    • Encourages the use of technology and innovative solutions to address developmental challenges and improve service delivery.

Conclusion

The shift from the Planning Commission to NITI Aayog marks a significant evolution in India's approach to planning and development. NITI Aayog's emphasis on cooperative federalism, outcome-based evaluation, and holistic development reflects a more modern, inclusive, and flexible framework suited to India’s diverse and dynamic needs. This transformation aims to facilitate sustainable growth while addressing regional disparities and promoting social welfare. 

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