New NITI Aayog: How Vijay Kelkar’s proposed NITI 2.0 will be different from Planning Commission

By: |
January 28, 2019 1:44 PM

Former Finance Commission Chairman Vijay Kelkar has proposed setting up a new ‘Niti Aayog' to overcome the challenges faced by the present Niti Aayog. However, he added that the new organisation will still be different from the erstwhile Planning Commission.

Vijay Kelkar (PTI File photo)

Barely less than five years after the government replaced Planning Commission with Niti Aayog, a former senior bureaucrat has called for a revamp of the new body into a new avatar, calling it Niti Aayog 2.0. The erstwhile PC was abolished in the spirit of cooperative federalism and a new think tank ‘Niti Aayog’ was created to facilitate grass root planning and help the government in policy making.

By its very design, NITI Aayog has differed with its predecessor — the Planning Commission. The former does not have powers to allocate funds, but could only make recommendations to the government. Funding is the sole purview of the finance ministry, unlike with the Planning Commission, which could also allocate funds. Secondly, it couldn’t impose policies for state governments to follow, again something where the Planning Commission had a strong say.

Former Finance Commission Chairman Vijay Kelkar has proposed setting up a new ‘Niti Aayog’ to overcome the challenges faced by the present Niti Aayog. However, he added that the new organisation will still be different from the erstwhile Planning Commission.

Here are the ways in which Vijay Kelkar’s proposed new Niti Aayog 2.0 will be different from or similar to the erstwhile Planning Commission.

In his paper, titled ‘Towards India’s New Fiscal Federalism’, Kelkar said that it is desirable that a functionally distinct entity such as the new Niti Aayog 2.0 be created to deal with the structural issues including removal of regional imbalances in the economy.

It will have the powers for allocating development or transformational capital or revenue grants to the states, he said. However, the new Niti Aayog will not approve the annual expenditure programmes of individual states, unlike the Planning Commission.

The Niti Aayog 2.0 shall be a permanent invitee of the Cabinet Committee on Economic Affairs (CCEA), just like the Planning Commission. This is to enable it to contribute to the highest level of policy making with knowledge-based advice and the national and long term perspective on the policy proposals.

“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,” Vijay Kelkar suggested.

The new Niti Aayog will need around 1.5 to 2 per cent of the GDP every year in resources to provide suitable grants to the states for mitigating the development imbalances.

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