Friday, February 12, 2016

[Editorial # 64] NITI Aayog's purpose is still unclear: Business-Standard

[Following editorial has been published in Business-Standard on 12th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

A visible sign of change in the nature of policymaking under the Narendra Modi government was seen on January 1, 2015 when the 64-year-old Planning Commission was replaced with the ambitiously named National Institution for Transforming India (or NITI) Aayog. The hope then was that it would be a leaner outfit with more sector experts. It was also expected to perform the role of a think tank and advisor on social and economic policies for the prime minister. The appointment of the well-known trade economist, Arvind Panagariya, as vice-chairman, and two respected academics and a scientist as members - plus the sharp reduction of staff - suggested that Mr Modi was on the right track. Replacing a secretary for planning with a CEO for the organisation indicated a new direction in institution building. Yet, over a year on, NITI Aayog's usefulness and purpose remain unfortunately unclear.

On current evidence, NITI Aayog can best be described as a poor relation to the Planning Commission rather than a brave new initiative. As yet, no significant policy prescriptions have emerged from its pink-and-grey portals, nor does the political establishment - although it includes many first-timers in government - appear to access it for advice, even on matters such as trade negotiations regarding which NITI's experts are world-renowned. Then the usual problems that beset government institutions are already surfacing. Some in it argue for more members to distribute the workload. There also appears to be some variance over the responsibility of the office bearers. Are they supposed to be policy advisors, as their expertise suggests, or quasi-political liaisons with state governments?

Certainly, it was common knowledge that the Planning Commission had outlived its utility in that form once controls were relaxed and the states came to play a bigger role in economic decision making. In the last years of the United Progressive Alliance, the chief ministers of some of India's better-run states - Mr Modi in Gujarat and J Jayalalithaa in Tamil Nadu notable among them - were vocal in their objections to spending priorities being dictated by a centralised body. In addition, over the past few years several decisions devolved far greater decision-making powers to the states in terms of how they choose to spend central grants and funds for welfare schemes. This diminishes one of the Planning Commission's major roles. Another function, that of resource allocation, has been shifted to the finance ministry. Clearly, NITI Aayog should have been freed up to find an alternative role. But it is unfortunate that the political leadership has not adequately empowered it to do so, or structured it to fulfil its initial promise.

NITI Aayog would have been in an ideal position to provide the government, which suffers the lack of a sound advisory establishment, with the crucial research heft and intellectual underpinning for its many policy initiatives, making it a genuine and powerful agent of transformation. There is still time - many bemoan the lack of new ideas emerging from stultified Union ministries. The NITI Aayog could be freshly empowered to serve as an advocate for progressive, market-friendly reform, so the political leadership has additional input on whatever policy proposals may emerge from the traditional bureaucracy.

Questions:

1. Trace out the history of Planning in India.

2. Why did India choose a path of Economic Planning? Which countries in the world have adopted Economic Planning?

3. What is Planning Commission? When, why and how was it constituted?

4. What were the contributions of Planning Commission towards economic growth of India?

5. It is often alleged that Planning Commission is a direct evidence of quasi federal nature of Indian polity. Do you agree? Justify.

6. Do you think that Planning Commission had outlived its utility? Explain with examples.

7. Why was Planning Commission abolished? 

8. Which organisation replaced Planning Commission? What was the objective behind setting up such an organisation?

9. It is being said that NITI Ayog has not been able to do justice to its mandate. What are the factors behind its not meeting the intended objectives? 

10. Do you think economic planning has any place in a free-market economy? Does India still need to follow a path of economic planning? 

11. Write a note on the composition of NITI Ayog? How is it different from that of Planning Commission?

21 comments:

  1. PLANNING COMMISSION:
    it was formed in 1950 to formulate the five year plans of the free india. the ideals fo VYP are borrowed from USSR.

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  2. 1. Trace out the history of Planning in India.
    1934- M. Visvervaraya was the pioneer who published a book named ‘Planned Economy for India’ proposing a 10-year plan.
    1938- Pandit Jawaharlal Nehru appointed the National Planning Committee to prepare a plan of economic development.
    1944- Bombay Plan was prepared by India’s capitalists for economic development by focusing on industrialization. An alternative to the above was given by M.N. Roy known as ‘People’s Plan’. It favoured agriculture and small scale industries.
    1945- S.N. Agarwal authored the ‘Gandhian Plan’ putting emphasis on expansion of small unit production and agriculture.
    1950- ‘Sarvodaya Plan’ was given by J P Narayan and a few points were accepted by the Government. The Planning Commission of India was set up on March 15, under the chairmanship of Nehru.
    1951- First Fiver-Year Plan was launched.
    1952- National Development Council was set up to approve suggestions made by the Planning Commission.
    Two subsequent Plans were drafted till 1965 after which there was a break due to Indo-Pakistan conflict, successive years of drought, general rise in prices, etc disrupted the planning process.
    The Five Year Plan was restarted in 1969 after three annual plans between 1966 and 1969.
    The Eighth Plan in 1990 could not take place due to changing political situation in the Centre and 1990-1991 and 1991-1992 were treated as annual Plans.
    1997- Since the launch of the Ninth Plan the emphasis on Public sector has become less.
    2015- Formation of NITI Aayog with current Prime Minister as the Chairperson.

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  3. 2. Why did India choose a path of Economic Planning? Which countries in the world have adopted Economic Planning?
    The main idea behind economic planning was to provide protection to national growth and prevent exploitation by the developed countries and the bourgeoisie class. The dearth of private capital in a newly independent country and the lack of incentive for the private sector to operate in conditions where profits could not be made demanded the State to step in. Hence, the socialist model was adopted by our leaders after witnessing the extra-ordinary success of planning in the Soviet Union. United States and France also had implemented Economic Planning.

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  4. 3. What is Planning Commission? When, why and how was it constituted?
    Planning Commission was a non-statutory and non-constitutional body which formulated India’s Five Year Plans among its other functions. It had the responsibility of making an assessment of all the resources of the country, increasing the production capacity increasing employment. It was set up by a Resolution if the Government of India in March 1950. It was formulated to ensure a rise in the standard of living of the Indian people by efficient exploitation of the resources of the country and also by providing employment to the people.

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  5. 2. Why did India choose a path of Economic Planning? Which countries in the world have adopted Economic Planning?
    A. During the time of independence the socioeconomic indicators were poor and to meet the challenges of the independent india economic planning is adopted. most of the developing countries including india have economic planning.

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  6. 4. What were the contributions of Planning Commission towards economic growth of India?
    A.Though PC had overshadowed the othe constitutional bodies like the FC, CVC its contribution to the growth prospects have to be recogniszed.
    agriculture: India achieved surplus production of agriculture production of 250MT contrary to the situation where india was dependent on imports of food grains from US.
    GDP: Though the growth rate after independece remained as hindu growth rate of <4% , the LPG reforms of 1991 raised the growth rate to 9% in 2008 , mainly due to the indicative planning adopted by the government.
    SERVICE SECTOR: india has exceptional in case of developing countries where 58% share of GDP comes from this sector similar to the developed nations in 2013.
    Hence , the growth aspects of agriculture and service sectors had positive growth aspects in the economy due to the VYP plans of PC.

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  7. 5. It is often alleged that Planning Commission is a direct evidence of quasi federal nature of Indian polity. Do you agree? Justify.
    A. PC was a statutory body formed in 1950 to make the VYP with the objective of increasing the living standards of the people, creating growth prospects with employment oppurtunities to the citizens. However, over a period of time the role of PC became dominance making it less relevant to the current secenario.
    India federation has the quasifederal nature where the center has the overriding authority in the matters as prescribed by the constitution in articles 249, 250,252 etc.
    role of PC:
    The PC became authoritative where the funds to the states is made by its members. the horizontal and vertical disrtibution of revenue sharing was made by it leaving less scope for economic autonomy to the states. Hence the states are made to be dependent on the center. The recommendations of the FC a constitutional body that determines the revenue sharing model remained to fill the gaps in the budgets of the state governments.
    ONE SIZE FITS FOR ALL:
    the planning at the center for 120cr population for a diversed countries is the most challenging issue keeping the ground realities of the states. The failure of provide relevant poverty estimates shows its failure.
    NO MECHANISM FOR REDRESSAL:
    there is no proper redressal mechanisms for the states on issues of inter-miniterial issues and the lack of consensus with the states for the development agenda through cooperative federalism remained as a distinct dream.

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  8. 8. Which organisation replaced Planning Commission? What was the objective behind setting up such an organisation?
    A. NITI AAYOG replaced PC under the aegies of honorable PM to rejuvenate the planning process in india.
    The role of PC since 1950 though had good records in the areas of surplus production in agricultre, manufacturing and service sector yet it failed to meet the basic objectives of poverty alievation,hunger, unemployment, unequal wealth distribution etc. Hence, the role of PC remained authoritative rather than "cooperative federalism" due to the top down approach of policy making and intervention of center in state planning mechanisms.
    Hence, to inculcate the participatory of citizens in decision making and providing autonomy to the states in meeting the requirements or regional importance and to promote health competition within the states the PC was replaced by the NITI AAYOG.

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  9. 9. It is being said that NITI Ayog has not been able to do justice to its mandate. What are the factors behind its not meeting the intended objectives?
    A. NITI AAYOG performs the role of thinktank to advice the government and supervision of the implementation of the planned objectives.
    NOT A CONSTITUTIONAL BODY
    like the PC , NITI AAYOG also formed based on the cabinet resolution. Hence, they are not accountable to the parliament for their failure to implement the laws in spirit.
    LACK OF long term VISION:
    the states are supposed to lobby with the different ministries unlike the erstwhile PC to get the funds from the center. This race for development increases the regional disparities when the values are not brought into the picture.
    NO EQUAL REPRESENTATION:
    the governors of the UTs are invited rather than the CMs who are elected directly by the people .

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  10. 1. The fundamrntal principle of the economic planning, deriving from the sovereign authority of the state, was first initiated in India in 1938 by Congress President and Indian National Army supreme leader Netaji Subhash Chandra Bose, who had been persuaded by Meghnad Saha to set up a National Planning Committee. British Raj also formally established a planning board that functioned from 1944 to 1946. Industrialists and economists independently formulated at least three development plans in 1944. The Planning Commission, as a central agency in the context of plural democracy in India, needs to carry out more functions than fundamental economic planning.
    After India achieved Independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India, was established on March 1950, with Prime Minister Jawaharlal Nehru as the Chairman. Authority for creation of the Planning Commission was not derived from the Constitution of India or statute rather it is an arm of the central Government of India.
    The first Five-Year Plan was launched in 1951, focusing mainly on development of the agricultural sector. Two subsequent Five-Year Plans were formulated before 1965, when there was a break because of the Indo-Pakistan conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-Year Plan was started in 1969.
    The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Center, and the years 1990–91 and 1991–92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.
    For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.
    In 2014, the Central Government led by Prime Minister Narendra Modi proposed to replace it with a more dynamic organisation that is more popular and connected to the times.

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  11. 2. REASONS FOR INSTALLING PLANNING COMMISSION.
    Since India just got out from the hurt breaking incident of partition, every entity was deeply intoxicated. Country's economic, Social and welfare level was drastically depressed. Thus in order to halt further inequalities and social adversities, Planning Commision was introduced (as a statutory body) as an economic tool to balance each aspect in positive direction.
    To make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting those are related resources which are found to be deficient in relation to the nation's requirement. To formulate a plan for the most effective and balanced utilisation of country's resources and to define the stages, on the basis of priority, in which the plan should be carried out and propose the allocation of resources for the due completion of each stage. It was commenced to indicate the factors that tend to retard economic development and to determine the conditions which need to be established for the successful execution of the plan within the incumbent socio-political situation of the country.
    To determine the nature of the machinery required for securing the successful implementation of each stage of the plan in all its aspects. To appraise from time to time the progress achieved in the execution of each stage of the plan and also recommend the adjustments of policy and measures which are deemed important along with a successful implementation of the plan. To make necessary recommendations from time to time regarding those things which are deemed necessary for facilitating the execution of these functions. Such recommendations can be related to the prevailing economic conditions, current policies, measures or development programmes. They can even be given out in response to some specific problems referred to the commission by the central or the state governments.
    OTHER COUNTRIES WITH "ECONOMIC PLANNING"
    India adopted this idea from the Soviet Union block. Currently most of the communist countries of Eastern Europe, Russia and China are majorly following the Socialist form of Economic Planning method for the ground root upliftment.

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  12. 3.
    WHEN ?
    The Planning Commission was set up in March, 1950 by a Resolution of the Government of India.
    WHY ?
    The basic idea lies behind in the Constitution of India i.e. the citizens, men and women equally, have the right to an adequate means of livelihood, that the ownership and control of the material resources of the community are so distributed as best to subserve the common good, and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.
    "The Constitution of India has guaranteed certain Fundamental Rights to the citizens of India and enunciated certain Directive Principles of State Policy, in particular, that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life, and shall direct its policy towards securing, among other things"
    HOW ?
    In July, 1951 the Planning Commission presented a draft outline of a plan of development for the period of five years from April, 1951 to March, 1956. The Plan included a number of development projects which had been already taken in hand as well as others which had not yet been begun. The Draft Plan was divided into two parts, first was consisting largely of projects in execution which were to be implemented in any case, and the second proposing an outlay which was to be undertaken if external assistance were available.
    While the execution of development schemes which had been included in the plan after consultation with the Central Ministries and the State Governments was not to be affected, the Draft Outline was addressed to the country for general discussion.

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  13. 4. After the partition, India was owing to the greater urgency of the programmes for agriculture and irrigation, the provision made for the development of industry in the public sector was insufficient. In the Plan, in addition to providing for an integrated steel plant, further expansion of basic industries, including manufacture of heavy electrical equipment and fertilisers, and for increased transport facilities required for industry and mineral development.
    Village industries, small-scale industries and handicraft, whose importance for the economy as a whole can scarcely be exaggerated, have been given greater emphasis in the Plan. In addition to the setting up of new boards for khadi and village industries and for handicrafts, the imposition of a cess on millmade cloth to assist the development of khadi and handloom, and measures taken for the reservation of certain lines of production in favour of the handloom industry, the Central Government's plan for cottage and small-scale industries.
    Besides the plan for the public sector, the Planning Commission has formulated development programmes for forty-two industries in the private sector. From a highly centralised planning system, the Indian economy is gradually moving towards indicative planning where the Planning Commission concerns itself with the building of a long-term strategic vision of the future and decide on priorities of nation. It works out sectoral targets and provides promotional stimulus to the economy to grow in the desired direction. It also plays an integrative role in the development of a holistic approach to the policy formulation in critical areas of human and economic development. The Planning Commission has asked the States to hike the power tariff to save the ailing power sector. It also called upon the States to utilise the power subsidy for improvement to essential services like drinking water supply, education and health for promoting inclusive growth.

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  14. history of Planning in India.
    M.Visvervaraya published a book in 1934 ‘Planned economy for India’ In which he proposed ten year plan.
    1938
    INC headed by Jawhar lal Nehru appointed National Planning Committee to prepare plan for economic development. The basic task was to provide for national planning to solve problems of poverty and unemployment, national defence.
    1940
    Bombay Plan prepared by the Indian capitaists. Under this plan planning and industrialisation was synonymous.
    People’s Plan which ws given by M.N.Roy.Priority given to agriculture and small scale industries.
    Gandhian Plan given by S.N.Agarwal. Emphasised on the expansion of small scale industries and agriculture industry. Decentralisation. Self-contained villages and cottage industries.
    1950
    Planning commission set up in March 1950. Instructed to
    1. Make assessment of capital and human resources and how can they be utilized in the most efficient manner.
    2. Determine priorities and the stages in which it will be implemented. Allocotion of resources for completion of plan in each stage.
    3. Determine the factors which will affext the economic development.
    4. Determine conditions for the execution of the plan.
    1951
    First five year plan was launched.
    1956 second five year plan. 1961 3rd.1969 fourth.1974 fifth. 1979 annual plan. 1980 6th. 1985 7th. Annual plan 1990. 1992 8th plan.1997 9th plan.2002 10th plan. Eleventh plan 2007.

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  15. 5. Being the statutory body of the government with the Prime Minister as the Chairmen of the Commission, two aspect are clear. No backing of the constitution will inadvertently make the commission unaccountable and centrally organized. Secondly, since the commission is centrally monitored, states are rendered with less role to play. This issue is very pertinent because the planning of the Union Government and constitutionally alloted subjects between state and union government lists can clash face to face. Through this manner, Union would be able enough to further curb down the role of State governemnt in policy formulation of its subject list. In case, there are different political parties in center and state government, then union could interefere in state subject list in multifarious ways, which would finally result in the failure of proper execution of policies and stagnant or slugging growth of the Nation as whole.
    YES ! Planning Commission is a direct evidence of quasi federal nature of Indian polity.
    "MAXIMUM GOVERNMENT, LESS GOVERNANCE !!"
    Successful implementation of development programmes requires adequate funds, appropriate policy framework, formulation of suitable plan schemes, and effective delivery machinery. Past experience has suggested that availability of funds is no panacea for tackling the problems of poverty, backwardness and low human development in India. It may be necessary but not a sufficient condition. The determining factor seems to be the capability of the funding Ministries and State Governments to formulate viable schemes and the delivery system to optimally utilise funds and achieve sustainable growth.
    JUSTIFICATION
    Inability of the Union ministries to control the execution of the schemes with a view to ensuring the attainment of the stated objectives in the most cost effective manner and within the given time-frame, as a result of which, the programmes continued to be executed in uncontrolled and open-ended manner without quantitative and qualitative evaluation of delivery.
    The controlling Union ministries confined their role to the provision of budget and release of the funds to the state governments rather mechanically without reference to the effective utilisation of the funds released earlier in accordance with the guidelines and capacity of the respective state governments to actually spend the balance from the previous years and releases during the current year.
    The ministries were unable to ensure correctness of the data and facts reported by the state governments. Overstatement of the figures of physical and financial performance by the state governments was rampant. No system of accountability for incorrect reporting and verification of reported performance were in vogue.
    The Ministry was more concerned with expenditure rather than the attainment of the objectives. Large parts of funds were released in the last month of the financial year, which could not be expected to be spent by the respective state governments during that financial year.
    The state government's attitude to the execution of the programmes was generally indifferent. They laid emphasis on release of assistance by the ministry rather than ensuring the quality of expenditure and attainment of the objectives. Misuse of the funds provided for vulnerable sectors and sections of the society was rampant. The state governments' attitude towards such misuse was one of unconcern. The controlling Union ministries had no clue to such misuse. Thus, in many cases, the figures of expenditure booked in accounts assumed precedence over the bonafide and propriety of the expenditure.

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  16. 6. HISTORICAL RELEVANCE OF THE PLANNING COMMISSION
    Once India won independence from the British, the country’s leaders realised there was an enormous amount of development work that needed to be done across several sections of the economy. So they set up a Planning Commission which would chart the goals that the government needed to achieve at the end of every five years. This was the start of India’s five-year plans, a practice which continues to this day. These plans would cover everything from how much grain must be produced, which industries the country must focus on, how much money needed to be invested and where all our produced goods should be sold.
    There was another reason why the Planning Commission was created. Independent India’s first leaders, not least among them being our first Prime Minister Jawaharlal Nehru, were influenced by and believed in a socialist model of economics. Socialism, by definition, is a system where the government very closely oversees every aspect of the economy. It believes in common ownership of natural resources, a co-operative model of doing business and a planned system of production. Creating the Planning Commission, which set out not just production targets but also decided how much each sector received by way of allocation of government funds.
    INEFFICIENCIES OF PLANNING COMMISSION - AFTER 6 DECADES
    This is the time to examine the role of the Planning Commission in the light of developments since the era of planning began in 1950 and its current relevance. The significant feature is the evolution of mixed economy with both government and private sector participation. The latest venture is public-private participation in major projects such as infrastructure development.
    The growing importance of prudent fiscal management as a tool for economic development has been recognised. The one-year span of the annual budget was found to be inadequate to reflect reforms in government revenue and expenditure which take longer time to devise and execute. There are many factors raising doubts on the efficacy and relevance of the five-year plans as the instrument. The division of expenditure between Plan and non-Plan is artificial and creates problems. The dichotomy results in dual and confusing responsibility of the Ministry of Finance and the Planning Commission and adversely affects the whole budget process, formulation and implementation. The Ministry of Finance is responsible for fiscal consolidation. The finalisation of Plan allocations for the State budgets also suffers from this weakness. Ultimately, the Central Government has to fix the market borrowing by the State governments taking the overall sustainable borrowing limits, including the needs of the Central Government. The Planning Commission tends to have a more optimistic estimate of resources likely to be available for financing the Plan expenditure as fiscal deficit management and control is not its direct responsibility.

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  17. ANSWER 6th CONTINUES.....

    NEED FOR THE REVISION OR DISMANTLING IT
    Today, in the contemporary competition in the International Economic System and under the influence of New International Economic Order (NIEO) India has come a long way from the days of government control over industry. India now has what is called a ‘mixed economy’, where the free markets and the forces of demand and supply are allowed to decide what should be produced in what quantity. At the same time, the government enforces the rules of the game, ensuring that there is enough healthy competition in industry and the gains of economic development are redistributed to ensure that the poor are helped as well. The Congress government wanted to keep the Planning Commission but change its functions so that it would oversee reforms in the economy instead of setting production and fund allocation targets. The Modi government has dismantled the 6 decade Planning Commission altogether and that a new think-tank that will advise on how to regulate industry, on fixing government finances and encouraging economic reforms. The think-tank is meant to provide the ‘big picture’ for the country’s future.

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  18. Why did India choose a path of Economic Planning? Which countries in the world have adopted Economic Planning?
    Attainment for higher rate of economic growth.
    To reduce economic inequalities.
    With the object of attaining full employment.
    Modernizing various sectors.
    to attain economic self-reliance.
    Further the planning was done along the socialist line to restrict concentration of wealth in few hands.

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  19. 9. In a myriad step to replace PC, NITI aayog is aimed to foster better Inter-Ministerial coordination and better Centre-State relations. The institution is serving as a ‘think tank’, strengthening ‘Cooperative Federalism’ by recognising 'strong states make a strong nation' and inculcating ‘bottom-up’ approach for development process.

    Though it has been one year in its inception, there have been mixed results regarding it's performance.

    Positive:
    1. It has brought best minds at same platform, containing specialist from different areas, helping government to be an ‘enabler’ rather than a ‘provider of first and last resort’.
    2. The aayog has granted specific responsibilities to its members, for instance Task Force to tackle Agriculture Development under Dr. Arvind Panagariya, Revamping Indian Railways under Bibek Debroy etc.
    3. Quantified work on the basis of priorities by forming sub-group of CM on revamping CSS, Swachh Bharat and Skill Development; focusing in specified direction.
    4. Aayog is awarded a five star rating by the Bureau of Energy Efficiency (BEE) in pioneering the changes in Government Buildings.

    Lagging areas:
    1. The Aayog is not given full-autonomy because of which delays have been there, unlike EC (constitutional body) which have shown fulfilling results due to it's independent structure.
    2. Many states are still not attending Aayog’s meeting showing its incompetence to cooperate with these states.
    3. There is lack of competent officers and staff members leaving many posts vacant. Apart from that most officers consider NITI Aayog a punishment posting.
    4. There is not a very clear distinction between the roles of NDC, Governing Council and Inter-State Council – which may lead to policy conflict.

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  20. 7. Planning Commission has been scraped for various reasons:

    *Toothless body, can’t hold State/union/ministries/departments accountable for failing to achieve targets.
    *Failed to implement land reforms. Faulty policies for MSME, industrialization, Factory-labour law problems.
    *Office manned by Generalist IAS/IES with short tenure; panel members filled with academicians and jholachhap NGOs.
    * IAY, ICDS etc. programs failed to show tangible result despite pumping crores of rupees.
    *They tried to bypass state Governments via NGO-funding, DRDA. Hence States unenthusiastic about implementing Central-schemes
    *For so many years, Government worked as the “provider of first and last resort”. But, today Indian industry and service sector has reached on global scale, a neo-middle class has emerged.
    *Times have changed, from being a underdeveloped country in 1950s – India has become a major economic force.
    *Hence our needs have changed- from mere food security to profitable agriculture. In this playground, Government needs to become an “enabler” rather than a “player”.

    And for these reasons Planning Commission was replaced by NITI Aayog.

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    Replies
    1. Answer for 6 and 7 are more and less same according to me. These points can be added to give more clarity to the answer.

      * Achieved >9% GDP growth-rate during 2005-07, thanks to American boom prior to sub-prime crisis. But almost all nations of world experienced high growth. So 9% GDP did not come from Montek’s magic wand.
      * Post sub-prime crisis, failed to evoke the “animal spirit” in Indian economy. GDP-fell, inflation rose during 2008-13 nonstop.
      * Only in 2013- reforms done like reducing number of Centrally sponsored schemes (CSS), 10% flexifund to states, direct transfer of money to state consolidated fun etc. But it’s too little too late.
      * Shortcomings in planning commission led to formation of new bodies like PM’s economic advisory council, PM’s project monitoring group. more brains came to fore and more lack of coordination exist.

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