NITI Aayog: Why It Replaced the Planning Commission, Structure, Functions, Indices and Criticism (UPSC Notes + PYQs)

Why the change

The Planning Commission, also created by a Cabinet resolution in March 1950, drew up twelve Five-Year Plans and decided plan grants to States. By the 2000s, critics called it a top-down body in a market economy, and States resented going to Delhi for money. In August 2014 the government announced its end; NITI Aayog took its place, and the Twelfth Plan (2012-17) was the last. The National Development Council also fell out of use.

Structure

• Chairperson: Prime Minister.
• Governing Council: Chief Ministers of all States and Union Territories with legislatures, and Lieutenant Governors of other UTs.
• Regional Councils for issues touching more than one State.
• Vice-Chairperson appointed by the PM, full-time members, up to two part-time members from universities and research bodies, up to four Union Ministers as ex officio members, and a CEO.

What it does

Prepares strategy and vision documents, evaluates schemes through its Development Monitoring and Evaluation Office, ranks States to spur competition, and runs the Atal Innovation Mission (Atal Tinkering Labs, incubation centres). Its indices include the SDG India Index, the National Multidimensional Poverty Index, the Export Preparedness Index and the School Education Quality Index. The Aspirational Districts Programme (2018) used ranking on health, education, agriculture and infrastructure to push 112 lagging districts.

Planning Commission vs NITI Aayog

Indices that rank States

NITI Aayog uses rankings to push “competitive federalism”. Its main indices are:

Rankings create public pressure and healthy rivalry, but States complain that data are dated, weights are arbitrary and poorer States are judged by the same yardstick as rich ones. NITI’s 2024 discussion paper on multidimensional poverty, estimating that about 24.8 crore people escaped poverty between 2013-14 and 2022-23, is often quoted in Mains answers, along with its caveats.

Aspirational Districts Programme

Launched in 2018, the programme picks 112 of the most backward districts and ranks them monthly on 49 indicators in health and nutrition, education, agriculture and water, financial inclusion and skills, and basic infrastructure. It rests on convergence of schemes, collaboration between Centre, State and district officers and competition among districts. The UNDP praised it in 2020. An Aspirational Blocks Programme followed in 2023 for 500 blocks.

Criticism

With no money to give, it has less leverage over ministries; Governing Council meetings are irregular and some CMs skip them; and its reports are sometimes seen as close to the government’s line. Supporters say its value is in data, rankings and ideas that States can borrow.

Planning in India: the longer story

Planning ideas came before independence: the Bombay Plan of industrialists (1944), the Gandhian Plan and the National Planning Committee of the Congress (1938, chaired by Nehru). After 1950 the Planning Commission led the Five-Year Plans. The First Plan (1951-56) focused on agriculture; the Second (1956-61), built on the Mahalanobis model, pushed heavy industry. Plan holidays followed in 1966-69 and 1990-92. From the Eighth Plan (1992-97) planning became “indicative” rather than directive, as liberalisation shifted investment to the private sector.

How NITI Aayog works with States

Its main tools are competitive federalism (rankings that push States to improve) and cooperative federalism (Governing Council meetings, State support missions). Since 2023 it has run a State Support Mission to help States set up their own think tanks, called State Institutions for Transformation; Uttar Pradesh, Maharashtra and others have set these up. Sub-groups of Chief Ministers have produced reports on centrally sponsored schemes, skill development and Swachh Bharat.

Way forward

• Give it a statutory base and a clear evaluation mandate so ministries must respond to its findings.
• Regular Governing Council meetings with an agenda set jointly with States.
• Independent, published data behind every index, with State feedback before release.
• Stronger long-term work on climate, demographic change and jobs, areas markets alone do not plan for.

PYQ trend

Prelims has asked what NITI Aayog replaced (2015) and whether bodies like the FSDC are its organs (2016). Mains brings it in through cooperative federalism and the role of planning. Learn its indices: they appear in current affairs every year.

NITI Aayog: UPSC angle

NITI Aayog UPSC PYQs (Prelims)

Questions UPSC has actually asked, from the official papers. Pick an option to check yourself.

Mains PYQs on this topic

No UPSC Mains question from 2023-2026 is directly on this topic. Older papers (2013-2022) will be added as the Mains bank grows.

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