The government also announced creation of a special open forum on the website mygov.nic.in for suggestions on the new institution.
"We envision the proposed Institution as one that caters to the aspirations of 21st century India and strengthens participation of the States.... Let the ideas flow," the Prime Minister said in a statement.
It said, "The Prime Minister has invited ideas from people on what shape the new institution to replace the Planning Commission can take."
Addressing the nation from the Red Fort on Independence Day, Modi had said that the 64-year old Planning Commission, a vestige of socialist era, would be soon replaced with a new institution to address the current economic challenges and strengthen the federal structure.
"We need a new body with a new soul....We will have to think about giving a new shape to the Planning Commission.... Very soon this new institute will start working in place of Planning Commission," Modi had said.
He had said that it was set up to cater to the needs of earlier times and has participated in its own way in the development of the country.
"The internal situation of the country has changed, global environment has changed. Government is no longer the centre of economic development. Economy is much more broadbased now.
"State government is also a centre of development. I feel it is a good sign. If we have to take India forward, then states have to be taken forward," the Prime Minister had said.
Justifying the need to replace the Commission, he had said, "Sometime it becomes necessary to repair a house. It costs a lot of money. But it does not give us satisfaction. Then we feel it is better to make a new house."