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03 Apr 2017

PMO yet to approve NITI Aayog's three year action plan

National Institution on Transforming India (NITI) Aayog which had scheduled to release its three year action plan has been unable to meet its April 1st deadline pending PMO's approval.

The Aayog has finished consultations with ministries, an official declined to comment on the exact date on the plan's release. This leaves India without a plan in the interim period following the 12th Plan's expiry.

In context

NITI Aayog misses deadline, action plan release stalled

Planning Commission of India

The Planning Commission was inspired by the Soviet model of centralized planning. Jawaharlal Nehru, India's first PM, who set up and steered agrarian reforms through the Commission admired Joseph Stalin's drive to achieve industrialization through command economy built around top to bottom policy implementation.

Marking the end of the Nehruvian era


Marking the end of the Nehruvian era

The NITI Aayog was set up in 2015 replacing the erstwhile Planning Commission.

Rationalizing the move, union finance minister Arun Jaitley noted that the 65 year old organization is redundant in the present era.

Widely seen as a masterstroke ending the Nehruvian era, the Commission's top-bottom command economic approach is said to have resulted in India's slow economic growth in the pre-globalisation era.

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The NITI Aayog

The Aayog functions more like a think tank, as opposed to top down imposition of five year plans touted by the Commission.

Fostering a bottom-up approach, the Aayog, chaired by the PM includes 29 states and union territories as well as representatives from universities and experts.

It vouches for increased involvement of state governments as various states are at different stages of economic development.

Membership within the Aayog

Columbia University economist Arvind Panagariya is the Aayog's vice-Chairperson. While union ministers including Arun Jaitley and Rajnath Singh are ex-officio members, special invitees include Nitin Gadkari and Smriti Irani. Further, CMs of 29 states and governors from states and UTs constitute the Governing Council.

Key Features

The NITI Aayog Vision Document

Panagariya in 2016 declared that five year plans would conclude after the 12th Plan Period (2016-2017).

He added that five year plans would be replaced by three vision documents: the short term road map for 3 years, the medium term seven year strategy and the long term 15 year vision document.

Amongst other things, the plan would look at GDP in agriculture and manufacturing.


Facilitating the transition

While the government has ceased to consider the 12th Plan into the budget for the next fiscal year, the Finance Ministry has extended the 12th Plan for 6 months allowing ministries to conclude approvals/appraisals.

The Plan will take demonetization into account and will refrain from projecting revenue for the next year.

States would lose out on central funds on failure to meet deadlines.

Can India work without a plan?


Can India work without a plan?

Failure at timely delivery, can considerably discredit the Aayog's reputation as a better version of the Planning Commission.

Absence of the plan might force to put flagship initiatives including Swacch Bharat and Digital India on hold, without a specific tenure or financial plan.

Further, this might leave the states without funds halting urgent development activities.

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