Approval for reconstitution of NITI Aayog

Context:

Prime Minister approved reconstitution of policy think tank NITI Aayog, renaming Rajiv Kumar as its vice chairman and appointing Home Minister Amit Shah as an ex-officio member.

About:

NITI Aayog

• The National Institution for Transforming India or NITI Aayog was formed via a resolution of the Union Cabinet on January 1, 2015.
• It is the premier policy ‘Think Tank’ of the GOI, providing both directional and policy inputs. While designing strategic and long term policies and programmes for the GOI, it also provides relevant technical advice to the Centre and States.
• NITI Aayog replaced the Planning Commission instituted in 1950. This was done in order to better serve the needs and aspirations of the people of India.
• An important evolutionary change from the past, NITI Aayog acts as the quintessential platform of the GOI to bring States to act together in national interest, and thereby fosters Cooperative Federalism.

Why NITI Aayog replaced Planning Commission?

• Reform of the Planning Commission was long overdue. An intensive exercise was undertaken. Many stakeholders were consulted. International practices were examined. An outline was drawn of a substantially reformed institution which would have a capability for “systems reform” rather than making of Five-Year Plans, and which would have the “power of persuasion” without providing budgets.
• A commission chaired by Rangarajan examined budgetary processes, divisions of responsibilities between the Finance Ministry and the Planning Commission, and distinctions between ‘plan’ and ‘non-plan’ expenditures. It concluded that budgetary responsibility must be concentrated in the Finance Ministry, and it was no longer desirable for the Planning Commission to have powers for financial provisions.
• Some in the Planning Commission were worried that it would lose its teeth if it did not have any financial power. Chief Ministers retorted that the Planning Commission must improve its ability to understand their needs and to develop ideas that they would want to adopt because they accepted the ideas as good for them, not because they would have to if they wanted the money.
• It is not surprising, therefore, that the bold charter of NITI Aayog announced in 2015.

Functions of NITI Aayog

• To evolve a shared vision of national development priorities sectors and strategies with the active involvement of States in the light of national objectives.
• To foster cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis, recognizing that strong States make a strong nation.
• To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.
• To pay special attention to the sections of our society that may be at risk of not benefiting adequately from economic progress.
• To design strategic and long term policy and programme frameworks and initiatives, and monitor their progress and their efficacy.
• To provide advice and encourage partnerships between key stakeholders and national and international like-minded Think tanks, as well as educational and policy research institutions.
• To create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners.
• To actively monitor and evaluate the implementation of programmes and initiatives, including the identification of the needed resources so as to strengthen the probability of success and scope of delivery.
• To focus on technology up gradation and capacity building for implementation of programmes and initiatives.

Composition of NITI Aayog

• The full-time organizational framework will comprise of, in addition to the Prime Minister as the Chairperson.
• Vice-Chairperson: To be appointed by the Prime Minister.
• Members: Full-time
• Part-time members: Maximum of 2 from leading universities research organizations and other relevant institutions in an ex-officio capacity. Part time members will be on a rotational basis.
• Ex Officio members: Maximum of 4 members of the Union Council of Ministers to be nominated by the Prime Minister.
• Chief Executive Officer: To be appointed by the Prime Minister for a fixed tenure, in the rank of Secretary to the Government of India.

New Reconstitution

• The Prime Minister will serve as the Chairman of Niti Aayog.
• Vice-Chairman Rajiv Kumar continues in his post along with Permanent members VK Saraswat, Ramesh Chand and VK Paul.
• The ex-officio members now include Defence Minister, the Home Minister, the Finance Minister and Agriculture Minister.
• Special invitees to NITI Aayog include Minister of Road, Transport and Highways, Minister of Social Justice and Empowerment, Minister of Railways and Minister of Statistics.

Earlier Fallouts

• Recent ruling government needs to increase employment and incomes; revive investments and growth; untangle the financial sector; navigate muddied-up international trade; solve the perennial problems of poor education and health, and the growing problems of environmental pollution and water scarcity.
• Regardless of whether or not India has the fastest growing GDP, it has a long way to go to achieve economic and social inclusion, and restore environmental sustainability. India’s problems are complex because they are all interrelated. Fixing one part of the system alone can make matters worse.
• Now, when the country’s economy has not performed to the high expectations, the performance of the NITI Aayog is under scrutiny, as it should be. Many people are even nostalgically recalling the Planning Commission, including some who were very critical of it and wanted it overhauled.

Arguments in favour for it

• Changes with continuity are necessity of time. This step of reconstitution is a good starting point for a new journey in transforming the governance of the Indian economy. This will enhance an open-minded review of what NITI Aayog has achieved so far to adopt the new role described in its charter — that of a catalyst of change in a complex, federal, socioeconomic system.
• This will make governance more effective. This step has provided a new bottle. It points to the need for new methods of cooperative learning and cooperative implementation by other ministries.

Reaction against it

• This created uproar not only within the government, but also in the political circles.
• Implementation of radical change is never easy. If things don’t go well soon, nostalgia will rise for the old order — even though there was dissatisfaction with it. And the change-maker will be blamed for the disruption.
• There is deep concern that NITI Aayog has lost its integrity as an independent institution to guide the government; that it has become a mouthpiece of the government and an implementer of the government’s projects. Many insist that NITI Aayog must have the ability to independently evaluate the government’s programmes at the Centre and in the States.

Will this reconstitution help India?

• As four ministries have been included, this reform will include changes in labour laws, privatisation moves, and creation of land banks for new industrial development. It will bring more totality in the nature of NITI Aayog.
• The newly top council of NITI Aayog will more focus on crucial matters like water management, agriculture and aspirational district programmes, which is crucial to stem the declining trend in economic growth.

Way Forward

• This measure requires evaluations and course-corrections in the midst of action.
• It requires new methods to speed up ‘organisational learning’ amongst stakeholders in the system who must make plans together and implement them together rather than reconstituting. Participation from other people is also necessary to make Aayog not a think-tank only from the above but from below also.
• Merely filling this new bottle with reconstituting from above will not transform India. The debate about NITI Aayog’s efficacy must focus on whether or not it is performing the new role it must, and what progress it has made in acquiring capabilities to perform this role, rather than slipping back into the reconstitution of NITI Aayog.

Practice Question

‘NITI Aayog’ is the missing pillar of India’s good governance. Do you agree with the recent reconstitution of Aayog? How far this step will improve the capability of governance in India?