Subject: Economy

The transformation from Planning Commission to NITI (National Institution for Transforming India) Aayog marks a paradigm shift in India's development planning approach, reflecting the evolving needs of a dynamic economy.

Key Differences in Principles

Structural Framework

• Planning Commission followed a top-down, one-size-fits-all approach with central control over resource allocation and policy implementation.
• NITI Aayog adopts a bottom-up, participatory approach through initiatives like Aspirational Districts Programme, enabling states to drive their development agenda.

Federal Relations

• Planning Commission operated on centralized planning principles, where states had limited autonomy in policy formulation.
• NITI Aayog promotes cooperative and competitive federalism by:
  • Fostering collaboration between Centre and States.
  • Encouraging healthy competition through initiatives like SATH (Sustainable Action for Transforming Human Capital) program.

Resource Allocation

• Planning Commission had financial powers to allocate resources to states and ministries.
• NITI Aayog functions as a think-tank and advisory body, focusing on:
  • Policy coordination.
  • Evidence-based policymaking.
  • Technical support to states.

Planning Approach

• Planning Commission emphasized on Five-Year Plans with rigid targets and allocations.
• NITI Aayog focuses on:
  • Dynamic monitoring through real-time data.
  • Flexible planning adapted to changing economic scenarios.
  • Innovation through programs like Atal Innovation Mission.

Implementation Strategy

• Planning Commission relied on directive planning with mandatory compliance.
• NITI Aayog employs:
  • Collaborative implementation involving multiple stakeholders.
  • Knowledge partnerships with experts and institutions.
  • State-level reforms through technical assistance.

The transformation from Planning Commission to NITI Aayog represents India's shift from a directed economy to a facilitated economy, aligning with the principles of cooperative federalism and sustainable development. The success of initiatives like Aspirational Districts Programme demonstrates the effectiveness of this new collaborative approach to national development.