New era dawns: Niti Ayog empowers states for development; Prime Minister Narendra Modi to head new body

On the last day of 2014, curtains came down on the last relic of the Nehruvian socialist economy with the Union government replacing the Planning Commission (Yojna Ayog) with another body, the National Institution for Transforming India (NITI Ayog).

In 1950, Jawaharlal Nehru, who admired Joseph Stalin's drive to industrialise the Soviet Union, set up and chaired the Commission to map out a development path for India's agrarian economy.

A 2,883-word long Cabinet resolution on setting up this institution calls it a Think Tank of the government or a "directional and policy dynamo,"providing governments at the central and state levels relevant strategic and technical advice." Noted economist Arvind Panagariya (62) will be the vice-chairman in the NITI Ayog.
Prime Minister Narendra Modi had announced in his Independence Day address to the nation that the Planning Commission would be dumped. US-based academic Panagariya is a free market, right wing economist who, over the last two years, has been writing advisories to the BJP about how to run the economy. He had also openly offered his services and now has been given the job he wanted.

How will NITI differ from Planning Commission?
Unlike the Planning Commission, the new body is for governance across the public and private domains, the Cabinet resolution says. "Everyone has a stake in ensuring good governance and effective delivery of services. Creating Jan Chetna, therefore, becomes crucial for people's initiative. In the past, governance may have been rather narrowly construed as public governance. In today's changed dynamics – with 'public' services often being delivered by 'private' entities, and the greater scope for 'participative citizenry', governance encompasses and involves everyone." The NITI Aayog will also seek to put an end to slow and tardy implementation of policy, by fostering better inter-ministry and better Centre-State coordination.

Will it be Modi's economic bureau?
Yes. Modi took the chief ministers into confidence on December 7 to go ahead with the new institution to strengthen "cooperative federalism" by promoting the concept of "Team India," noting that even then prime minister Manmohan Singh said on April 30 last year that the current structure of the Planning Commission has "no futuristic vision in the post-reform period".

What else does the resolution say?
The Cabinet resolution, which provides the ideological framework, invokes Mahatma Gandhi on constant development in life, BJP ideologue late Deen Dayal Upadhyaya for uplifting the downtrodden, Swami Vivekananda, Constitution's architect Dr Ambedkar and Tamil poet and philosopher Thiruvalluvar, to let the NITI Ayog act as the "pillars" that provide a "Bharatiya approach to development." It prescribes 13 objectives on which the NITI Ayog has to remain focussed.

Will NITI devolve more powers to states?
The new body will allow state governments to determine the architecture of economic growth and development, the resolution says: "The one-size-fits-all approach, often inherent in central planning, has the potential to create needless tensions and undermining the harmony needed for national effort. The resolution quotes Dr Ambedkar that it is "unreasonable to centralise powers where central control and uniformity is not clearly essential or is impracticable."The Planning Commission was unpopular with chief ministers as it engaged in promotion of Centre-to-state one-way flow of policy.."

How is it structured?
The structure will be the same as the Planning Commission with the Prime Minister remaining its chairperson, but the difference lies in its governing council comprising chief ministers of all states and lieutenant governors of Union territories and fixed-tenure regional councils to address specific issues, affecting more than one state or region.

How will members be nominated?
The new institution leaves scope for the PM to nominate experts, specialists and practitioners with relevant domain knowledge as special invitees. The members of the new body will include PM as the chairperson, his nominee as the vice-chairperson, full-time members, rotational part-time members, four Union ministers as ex-officio members, a chief executive officer for a fixed tenure in the rank of the secretary to the Centre and the usual secretariat.