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Niti Aayog 2.0

Topics Covered:

  1. Statutory, regulatory and various quasi-judicial bodies.


Niti Aayog 2.0


What to study?

  • For Prelims: Niti Aayog- objectives, composition and functions.
  • For Mains: Need for reforms and challenges associated.


Context: In a paper titled ‘Towards India’s New Fiscal Federalism’, former Finance Commission chairman Vijay Kelkar has pitched for setting up of a ‘new Niti Aayog’ and giving it responsibility for allocating capital and revenue grants to the states.


Need for setting up of ‘Niti Aayog 2.0’:

Replacing the Planning Commission, which was promoting regionally balanced growth in India, by the Niti Aayog, a think tank, has reduced the government’s policy reach. Therefore, the need has arisen for an institution to do the job at hand related to the structural issues including removal of regional imbalances in the economy.


Few suggestions related to composition and functions of the revamped Niti Aayog:

  • It will be responsible for allocating development or transformational capital or revenue grants to the states.
  • In order to make the new Niti Aayog more effective, it is essential to ensure that the institution is at the ‘High Table’ of decision making of the government. This means the vice-chairman of the new Niti Aayog will need to be a permanent invitee of the Cabinet Committee on Economic Affairs (CCEA).
  • It need not be involved with the approval of the state’s annual expenditure programmes. It should rather strive to be a think-tank with ‘praxis’ possessing considerable financial muscle and devote its energies to outline coherent medium and long term strategy and corresponding investment resources for transforming India.
  • New Niti Aayog will annually need the resources of around 1.5 to 2% of the GDP to provide suitable grants to the states for mitigating the development imbalances.


Other arguments supporting the revamp of Niti Aayog:

  • NITI Aayog cannot transform a deeply unequal society into a modern economy that ensures the welfare of all its citizens, irrespective of their social identity.
  • It has no role in influencing public or private investment. It does not seem to have influence in policymaking with long-term consequences. For instance, demonetisation and the Goods and Services Tax.
  • NITI Aayog is supposed to be a think tank. This implies that while generating new ideas, it maintains a respectable intellectual distance from the government of the day. Instead, we see uncritical praise of the Govt-sponsored schemes / programmes.

Sources: the hindu.

Mains Question: ‘Niti Ayog’ is the missing pillar of India’s good governance. Do you agree? Comment on the possible improvements in India’s Good governance