NITI Aayog

History and Background

The NITI AAYOG's full form is the National Institute for Transforming India. The difference between NITI Aayog and the Planning Commission is that NITI Aayog replaced the Planning Commission that has been running in India for the past 65 years. The substitute of the planning commission has shown efficient progress in the current socio-economic scenario. The NITI Aayog acts as a mind map for the government and ministries to frame better policies for the nation. Compared to the Planning Commission, NITI Aayog was established to offer a more adaptable and decentralised approach to economic planning. In keeping with India's federal framework, it seeks to include states more actively in the planning and decision-making processes. It also encourages improved coordination and collaboration between the federal government and state governments, NITI Aayog advances cooperative federalism. It aims to provide states more authority to take the initiative and modify laws to suit their unique requirements and goals.

CLAT 2025: 10 Free Mock Tests | Legal Maxims | Landmark Judgements | PYQs

CUET BA LLB 2025:  Legal Studies ebook | 5 Free Mock Tests

MH CET LAW 2025: 10 Free Mock Tests | Legal Reasoning Practice Questions

Monthly Legal Current Affairs:  August’24 | July’24 | June’24

This Story also Contains

1. History and Background
2. Difference between NITI Aayog and the Planning Commission
3. Composition of NITI Aayog
4. Roles and Responsibilities
5. Objectives of NITI Aayog
6. Functions of NITI Aayog
7. Initiatives of NITI Aayog
8. Significance of NITI Aayog
9. Strategies of NITI Aayog
10. Challenges faced by NITI Aayog
11. NITI Aayog and Finance Commission

Difference between NITI Aayog and the Planning Commission

Composition of NITI Aayog

The following people make up the NITI Aayog:

• NITI Aayog chairperson is the Prime Minister of India

• The governor council comprises of lieutenant governors of union territories and Chief Ministers of each state

• It also has regional councils that are established to deal with specific problems on opportunities that impact multiple states and the Prime Minister has the authority to call meetings of regional councils, which are set up for tenure.

• The Chief Minister ministers of the state and the governors of union territories make up this the chairperson or the nominee designated by the chairperson is the authority over the regional council

• For better governance and better performance professionals and specialists with pertinent domain knowledge are nominated by the Prime Minister of India

• The prime minister has one more function and serves as the chair of a full-time organisation structure and the vice chairperson is one that is appointed by the prime minister

• A few part-time members are also appointed up to 2 members in an X official role who work part-time to provide expertise

• Ex-official members comprise of four council members who are chosen by the prime minister

• The NITI Aayog CEO (chief executive officer) will be appointed by the Prime Minister for a particular tenure. He will be answerable to the Indian government as secretary. The first CEO of NITI Aayog was Sindhushree Khullar.

Roles and Responsibilities

The Union Government announced the formation of the NITI Aayog on January 1st, 2015. The parliament passed a resolution assigning the NITI Aayog as the Planning Commission of India's successor. The Indian Planning Commission used to have two primary responsibilities:

1. Carrying out the five-year strategy.

2. Provide the states with funds.

It is the principal policy-making organisation in the nation and is anticipated to support the expansion of the national economy. The goal is to build a state so powerful and advanced that will support the development of the powerful and dominating country. It will create India's growth in a significant way for the global economy. The two major hubs are the Knowledge and Innovation Hub" and the "Team India Hub"

The NITI Aayog has the following as its supporting bodies

• Administration and Support Units

• Agriculture and Allied Sectors

• Aspirational Districts Programme Cell

• Communication and Social Media Cell

• Industry-I

• Industry-II

• Infrastructure-Connectivity

• Infrastructure-Energy

• Micro, Small and Medium Enterprises

• Natural Resources and Environment, and Island Development

• Project Appraisal and Management Division

• Data Management and Analysis, and Frontier Technologies

• Economics and Finance Cell

• Education

• Social Sector-I (Skill Development, Labour and Employment, and Urban Development)

• Social Sector Health and Nutrition, and Women and Child Development)

• Governance and Research

• Governing Council Secretariat and Coordination

• Public–Private Partnership

• Rural Development

• Science and Technology

• Social Justice and Empowerment, and Voluntary Action Cell

• State Finances and Coordination

• Sustainable Development Goals

• Water and Land Resources

Objectives of NITI Aayog

NITI Aayog put forward objectives majorly:

• The State’s involvement in establishing a "national agenda" and in light of national goals.

• It also aims to advance cooperative federalism by using consistent, well-organised support programmes and processes with the States.

• It also safeguards the socially and economically backward sections of the society which might be caused harm during economic breakdowns.

• It protects the subjects of national security concerning economic policies.

• The system also establishes a connection between the stakeholders and national, and international via partnership through research and educational institutions.

• It concentrates on improving technology and developing the ability to carry out projects and programmes.

• The functioning is also done to carry out any additional tasks that may be required to advance the national development plan and the aforementioned goals.

• It creates a common community of national and international professionals to facilitate knowledge generation, innovation, an entrepreneurial support system, etc.

• It efficiently evaluates programmes and initiatives' execution, including determining the resources required to increase the likelihood of success.

Functions of NITI Aayog

When it comes to creating long-term, strategic policies for the infrastructure, industry, healthcare, education, and agriculture, NITI Aayog is an indispensable resource.

• It studies the effects of policies and programmes on social and economic development while keeping an eye on how they are being implemented in various sectors.

• Analysis and research on important problems and obstacles to India's growth are carried out by NITI Aayog, which then presents the government with suggestions based on solid data.

• It makes it easier for states to participate in the creation of policies and encourages decentralised planning and execution, as well as, it promotes cooperative federalism.

• NITI Aayog collaborates with governments, specialists, and international organizations to share best practices, expertise, and creative ideas for sustainable development.

• It launches and backs several projects and programmes that advance sustainable development objectives, entrepreneurship, inclusive growth, and innovation.

• It encourages efficiency, accountability, and openness in government, encouraging innovation and entrepreneurship, and tackling important issues like poverty, inequality, and environmental sustainability, NITI Aayog seeks to reform India's economy and society.

Initiatives of NITI Aayog

Below are some initiatives taken by the education, health and infrastructural sectors:

• It breaks down barriers and guarantees that no institution or organisation is idle by gathering novel and innovative ideas and presenting them to the federal and state governments.

• As the States' envoy in Delhi, NITI Aayog is important since it allows direct engagement with the concerned ministries, resulting in issues being resolved more quickly.

• The Atal innovation mission was founded under NITI Aayog. It has done excellent work and has been immaculate in the improvement of India’s innovation. Education ecosystem. Tinkering labs have been set up in more than 1500 schools nationwide and the figure is expected to rise over 5000.

• Atal incubation centres have also been established to support young innovators and start-ups. It functions as a passage that allows the flow of fresh and creative ideas for better entrepreneurship so that there is development of business academies and civil society.

• Ayushmann Bharat, water conservation measures, artificial intelligence, and development in the medical council of India with the National Medical Commission among many initiatives that NITI Aayog has conceptualised with their respective ministries

• India has numerous percentages of malnourished children. They are also working on it by POSHAAN Abhiyaan. So, as to curb this issue of malnourishment and better governance over the policies that are present.

• The effectiveness of governance may enhance with the use of development, monitoring, and analysis by systems, degree of accountability and competitive federalism can be made by evaluating the performance of the various states across different verticals

Significance of NITI Aayog

• The NITI Aayog establishes a model for effective administration in which the government acts as an enabler rather than as a last-resort source of resources. To advance food security by emphasizing agricultural output and the real profits that growers get from their producers. It guarantees India's active involvement in international discussions and debates. To assure the full engagement and use of the economically active middle class. It utilizes India's human capital for science, entrepreneurship, and intellectual pursuits. It takes into account the NRI Community's Geopolitical and Geoeconomic might. It also takes advantage of urbanization as a chance to employ contemporary technologies to build a haven.

Strategies of NITI Aayog

• The strategy is to employ technology to lessen the possibility and uncertainty of governance mishaps, take advantage of India's demographic dividend and help young people reach their full potential. This is accomplished by offering job opportunities, fostering skill development, eradicating gender bias, and delivering education. One of the major significances is to end poverty and provide Indians with a greater opportunity to lead honourable and respectful lives.They address economic imbalances, caste systems, and gender prejudice. It incorporates communities into the nation's development process to offer over 50 million businesses—a significant contributor to the creation of jobs—policy support. It also aims to protect our natural resources and ecosystems.

• The task of organizing "Transforming our world: the 2030 Agenda for the Sustainable Development Goals" (SDGs) has been delegated to the NITI Aayog. The Millennium Development Goals (MDGs) are the result of a lengthy, inclusive process that started with the SDGs, which were created for the years 2006–2030. The Sustainable Development Goals (SDGs) encompass 17 goals, and during the United Nations Summit held on September 25–27, 2015, where the Prime Minister of India represented India, 169 related targets were resolved. Over the next 15 years, these SDGs will inspire and carry out their action in key sectors affecting both the world and the people.

• The current task for the NITI Aayog is to work proactively rather than only gathering data on the SDGs periodically to fructify the goals and targets by upholding high standards of quality rather than just quantity. The Ministry of Statistics and Programme Implementation (MoSPI) has already initiated a parallel exercise to engage with the ministries to refine the SDG targets and goals.

• The NITI Aayog has conducted a preliminary mapping of targets and goals for various ministries in consultation with the Ministry of Statistics and Programme Implementation (MoSPI). This mapping includes Centrally Sponsored Schemes (CSS), Central Sector Schemes, and State Schemes aligning with Sustainable Development Goals (SDGs), and can be accessed on the NITI Aayog website.

Challenges faced by NITI Aayog

• NITI Aayog guarantees the welfare of all citizens regardless of the difference in their social economic identity but cannot turn an uneven society into a modern economy as different verticals are different for the citizens to maintain equality. Certain positive divisions are important. It is one of the major challenges that is faced by NITI Aayog

• NITI Aayog does not have any influence over public or private investment decisions, but it keeps an eye on them. It seems that it has little impact on long-term policy decisions for the development of the country. As a think tank, it ought to be keeping a reasonable intellectual distance from the administration. Rather, we witness a mindless claim for the policies and initiatives backed by the government. Some particular problems such as why 90% of workers are still employed in the unorganised sector have not been addressed by them. This has to be discussed by the NITI Aayog.

• One of the major challenges in terms of women's empowerment is faced by NITI Aayog for example, women's labour force involvement has risen in countries such as Bangladesh, but in India, the situation differs and we have seen a decrease in participation. NITI Aayog has been given an excessive amount of authority which is not needed as we deal with the separation of powers and placing too much power in one body is never a good idea.

• NITI Aayog has not been equivalent to all the states and has seen humongous problems in the programs that are given by the central government. Well, it has been supporting some campaigns such as Bharat Mission, state level, smart city projects, et cetera. The need for balance and diverse developmental needs across the country is important, but the budgetary resources are equally important for the development.

NITI Aayog and Finance Commission

The NITI Aayog was established in the year 2015 replacing the planning commission. It serves as a policy maker or a think tank for the Government of India by focusing on planning and development for the nation. It also promotes innovation and entrepreneurship in consonance with the implementation and planning of the drafted programs. Whereas, the Finance Commission is a constitutional body established under Article 280 of the Indian Constitution. The primary goal of the Finance Commission is to distribute financial resources between the central and the state governments. It also ensures an optimum allocation of the resources such as fiscal subject matters and taxes. The Commission also confers upon financial matters that arrive about the president.

Thereafter, one of the major differences between the Finance Commission and NITI Aayog is that the Finance Commission is a well-established constitutional body with specific powers and functions enshrined in the Indian Constitution, on the other hand, the NITI Aayog is a non-constitutional body and acts as an advisory body to the government. The Finance Commission governs financial matters and appropriately allots financial resources whereas NITI Aayog caters for policy drafting and long-term planning of resources.

Further, the recommendations provided by NITI Aayog in the form of policies are subject to government intervention as it is working in an advisory capacity. The Finance Commission’s recommendation is backed by legality and it binds on the government. The members of the Finance Commission are duly constituted every five years including the chairman and other members as established in the constitutional provisions. The NITI Aayog’s members are appointed by the government and they grant services for a fixed tenure.

Hence, it can be concluded that both, NITI Aayog and the Finance Commission are an indispensable component of the framework of the Indian Government. The bodies are designed separately to perform distinct roles and functions in their capacities. Therefore, a balanced contribution of both bodies can bring growth and development in the country and also strike a boost for the Indian economy.