Indian Economic Planning: Contemporary Status

Indian Economic Planning: Contemporary Status


India has a long history of economic planning, dating back to the pre-independence era. India adopted a mixed economy model, with a combination of public and private sectors, and a central planning authority. India's first five-year plan was launched in 1951, with the aim of achieving rapid industrialization and social development. Since then, India has implemented 12 five-year plans, covering various sectors and themes, such as agriculture, infrastructure, education, health, poverty alleviation, and environmental protection.

Indian Economic Planning: Contemporary Status
Indian Economic Planning: Contemporary Status


However, in recent years, India has undergone significant changes in its economic planning framework. In 2015, India replaced the Planning Commission, which was established in 1950, with a new institution called the National Institution for Transforming India (NITI Aayog). The NITI Aayog is a think tank that provides policy advice and guidance to the central and state governments. It also seeks to foster cooperative federalism, innovation, and sustainable development.


 NITI Aayog: Structure and Objectives


The NITI Aayog is headed by the Prime Minister of India, who is the chairperson of the governing council. The governing council consists of the chief ministers of all the states and union territories, and the lieutenant governors of union territories. The NITI Aayog also has a vice-chairperson, appointed by the Prime Minister, and four full-time members, who are experts in various fields. The NITI Aayog also has two part-time members, who are selected from leading universities and research institutions, and four ex-officio members, who are the ministers of finance, home, defence, and agriculture. The NITI Aayog also has a chief executive officer, who is appointed by the Prime Minister, and a secretariat, which consists of various divisions and units.


The objectives of the NITI Aayog are as follows


- To foster cooperative federalism, by facilitating collaboration and constructive engagement between the central government and state governments. It strives to ensure the active participation of states in the planning and decision-making process, fostering a more inclusive and decentralized approach to governance.

- To formulate policies and strategic plans to address key developmental challenges and opportunities in various sectors. It conducts research, analysis, and consultations to develop innovative and evidence-based policies, focusing on sustainable economic growth, social welfare, and overall transformation.

- To catalyze reforms across sectors, by identifying policy bottlenecks, recommending policy changes, and promoting initiatives to foster efficiency, competitiveness, and productivity. The aim is to create an enabling environment for inclusive and sustainable development, promoting entrepreneurship, innovation, and ease of doing business.

- To strengthen monitoring and evaluation, by tracking the implementation of programs and policies, assessing their impact and effectiveness. It adopts performance indicators, sets targets, and regularly tracks progress to ensure accountability, transparency, and efficient utilization of resources.

- To serve as a knowledge and innovation hub, by engaging with experts, think tanks, and research institutions to gather insights, expertise, and best practices. It fosters collaboration, research partnerships, and knowledge-sharing to drive evidence-based policymaking and leverage technology for sustainable development.


 NITI Aayog: Achievements and Challenges


Since its inception, the NITI Aayog has undertaken various initiatives and activities to fulfill its objectives and functions. Some of the notable achievements of the NITI Aayog are:

  • - It has prepared a three-year action agenda, a seven-year strategy, and a 15-year vision document, to provide a long-term perspective and direction for India's development. The action agenda covers the period from 2017-18 to 2019-20, the strategy covers the period from 2017-18 to 2023-24, and the vision document covers the period from 2017-18 to 2031-32. The documents outline the goals, priorities, and strategies for various sectors and themes, such as agriculture, industry, infrastructure, health, education, environment, governance, and social justice.
  • - It has launched the Atal Innovation Mission (AIM), to promote a culture of innovation and entrepreneurship in India. The AIM consists of various programs and initiatives, such as Atal Tinkering Labs, Atal Incubation Centers, Atal New India Challenges, Atal Community Innovation Centers, and Atal Research and Innovation for Small Enterprises. The AIM aims to provide support and mentorship to innovators, entrepreneurs, and start-ups, and to create an ecosystem of innovation and entrepreneurship in the country.
  • - It has developed various indices and reports, to measure and monitor the performance and progress of various sectors and states. Some of the indices and reports are: the Sustainable Development Goals (SDG) India Index, which tracks the achievement of the SDGs by the states and union territories; the School Education Quality Index (SEQI), which evaluates the quality of school education across the states and union territories; the Health Index, which ranks the states and union territories based on various health indicators; the Innovation Index, which measures the innovation performance of the states and union territories; and the Aspirational Districts Programme, which aims to transform the socio-economic conditions of the 112 most backward districts in the country.
  • - It has organized various dialogues and consultations, to facilitate stakeholder participation and consensus-building on various policy issues. Some of the dialogues and consultations are: the Governing Council Meetings, which are held annually to review the progress and challenges of the NITI Aayog and the states and union territories; the Regional Councils, which are formed to address specific issues and challenges pertaining to a group of states or a region; the NITI Lectures, which are delivered by eminent national and international experts on various topics of national and global importance; and the NITI Forums, which are platforms for discussing and deliberating on the development issues and opportunities of the North-Eastern Region and the Himalayan States.


However, the NITI Aayog also faces some challenges and limitations in fulfilling its mandate and vision. Some of the challenges and limitations are:


  • - It lacks the authority and power to allocate funds and resources to the states and union territories, unlike the Planning Commission, which used to determine the plan size and the plan allocation for the states and union territories. The NITI Aayog can only provide policy advice and guidance, but the final decision and implementation rests with the central and state governments. This may affect the coordination and cooperation between the NITI Aayog and the states and union territories, and also the effectiveness and impact of the policies and programs.
  • - It faces the challenge of balancing the diverse and competing interests and demands of the states and union territories, especially in the context of cooperative federalism. The states and union territories have different levels of development, resources, capacities, and priorities, which may not always align with the national goals and objectives. The NITI Aayog has to ensure that the policies and plans are inclusive and equitable, and that the states and union territories have adequate autonomy and flexibility to pursue their own development agenda, while also adhering to the national vision and framework.
  • - It has to cope with the rapidly changing and complex economic and social environment, both at the national and global level. The NITI Aayog has to constantly update and revise its policies and plans, to respond to the emerging challenges and opportunities, such as the COVID-19 pandemic, the climate change, the digital transformation, and the geopolitical dynamics. The NITI Aayog has to ensure that the policies and plans are relevant, adaptive, and resilient, and that they leverage the potential and opportunities of the new technologies and innovations.


In Conclusion


The NITI Aayog is a significant and strategic institution, that plays a crucial role in shaping India's economic planning and development. The NITI Aayog has brought a paradigm shift in the economic planning framework, from a top-down and centralized approach to a bottom-up and decentralized approach, from a one-size-fits-all model to a tailor-made and context-specific model, and from a rigid and fixed plan to a flexible and dynamic plan. The NITI Aayog has also introduced a new culture of innovation and entrepreneurship, and a new spirit of cooperative federalism and partnership, in the economic planning and policy-making process. The NITI Aayog has made significant contributions and achievements in various sectors and themes, and has also overcome various challenges and limitations. The NITI Aayog has the potential and the vision to transform India into a prosperous, inclusive, and sustainable nation, in the 21st century..



Athar Maqsood

Woking as an Author and Writer since 2020.
Education :
Bachelor in Political Science and Economics. Diploma in Computer Science, Tally, and Typing.

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