The Modi government has replaced the 65-year-old Planning Commission, a leftover from the Socialist era, with a Niti Aayog or National Institution for Transforming India, marking a major shift in policy- making by involving states.
To be headed by Prime Minister Narendra Modi, the new body will have a governing council comprising chief ministers of all states and Lt Governors of Union Territories and will work towards fostering "co-operative federalism" for providing a "national agenda" to the Centre and states. The membership of states has rendered the National Development Council, a body of CMs that would approve Five-Year Plans, defunct.
The new body, which would remain at its predecessor's address in Lutyen's Delhi will have a vice chairperson and chief executive officer. Economist Arvind Panagariya has been appointed as the first vice-chairman of Niti Aayog, which will have two full-time members - economist Bibek Debroy and former DRDO chief VK Saraswat.
The PMO also nominated home minister Rajnath Singh, finance minister Arun Jaitley, railways minister Suresh Prabhu and agriculture minister Radha Mohan Singh as ex officio members.
Transport minister Nitin Gadkari, HRD minister Smriti Irani and social empowerment minister Thawar Chand Gehlot will be special invitees. However, two elected chief ministers - of Delhi and Puducherry - will not be members of the new Niti Aayog. The Article 239 of the Constitution defines both Delhi and Puducherry as Union Territories and therefore, their administrators - lieutenant governors - will be members of the panel. The two part-time members would be from leading universities and research organisations, the number of full time members has not been specified as yet.
Experts, specialists and practitioners with relevant domain knowledge would also be part of Niti Aayog as "special invitees nominated by the PM". Prime Minister Modi who announced the dismantling of Planning Commission in his maiden Independence Day speech last year, hailed the replacement in a series of tweets, saying that the inclusion of of CMs and LGs will "foster a spirit of cooperative federalism".
"Through Niti Aayog, we bid farewell to a 'one size fits all' approach towards development. The body celebrates India's diversity and plurality," Modi tweeted.
The scrapping of Planning Commission addresses the long-held view that the body which was conceived at a time when the Centre was supposed to occupy "commanding heights of economy" had outlived its relevance because of diminished role of the State and the emergence of the private sector and because of the foci of economic activities shifting to states. Beginning with former Prime Minister Rajiv Gandhi's dismissing the body as "bunch of jokers," the Commission's utility had been increasingly called into question, with state governments protesting against their limited role in the planning process despite Congress' protests against what it has called the assault on Nehruvian policies.
In its statement, Modi government focused on the lament of states about the "top-down" approach and how the new body would be the remedy. An important evolutionary change from the past will be replacing a centre-to-state one-way flow of policy by a genuine and continuing partnership with the states.