Kerala Chief Minister Pinarayi Vijayan has said that NITI Aayog has “not played the much-expected role of a facilitator” in the past four years and perhaps was not a substitute for the erstwhile Planning Commission.

He said that after doing away with the plans at the national level, states have lost the Gadgil formula, grants which they used to get as plan assistance earlier.

Besides, states now have also to bear a higher share - 40 per cent - instead of the earlier average 25 per cent in many centrally sponsored schemes, resulting in shrinking the state governments’ fiscal space, he said.

He said transformation of the Planning Commission to NITI Aayog has adversely affected states like Kerala, which had lost a source of funding for its Five-Year Plans.

Background

* NITI Aayog is a policy think tank of the Government of India, established with the aim to achieve Sustainable Development Goals and to enhance cooperative federalism. It was established in 2015 by the NDA government to replace the Planning Commission, which followed a top-down model.

* From 1947 to 2017, the Indian economy was premised on the concept of planning. This was carried through the Five-Year Plans, developed, executed and monitored by the Planning Commission.

* Prior to the Fourth Plan, the allocation of state resources was based on schematic patterns rather than a transparent and objective mechanism, which led to the adoption of the Gadgil formula in 1969. Revised versions of the formula have been used since then to determine the allocation of central assistance for state plans.

Functions of NITI Aayog

* To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of states in the light of national objectives.

* To foster cooperative federalism through structured support initiatives and mechanisms with the states on a continuous basis, recognising that strong states make a strong nation.

* To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.

* To ensure, on areas that are specifically referred to it, that the interests of national security are incorporated in economic strategy and policy.

* To pay special attention to the sections of our society that may be at risk of not benefiting adequately from economic progress.

* To design strategic and long-term policy and programme frameworks and initiatives, and monitor their progress and efficacy. The lessons learnt through monitoring and feedback will be used for making innovative improvements, including necessary mid-course corrections.

* To provide advice and encourage partnerships between key stakeholders and national and international like-minded think tanks, as well as educational and policy research institutions.

* To create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and other partners.

* To offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda.

* To maintain a state-of-the-art resource centre, be a repository of research on good governance and best practices in sustainable and equitable development as well as help their dissemination to stakeholders.

* To actively monitor and evaluate the implementation of programmes and initiatives, including the identification of the needed resources so as to strengthen the probability of success and scope of delivery.

* To focus on technology upgradation and capacity building for implementation of programmes and initiatives.

* To undertake other activities as may be necessary in order to further the execution of the national development agenda, and the objectives mentioned above.

Arguments against NITI Aayog

* NITI Aayog cannot transform an unequal society into a modern economy that ensures the welfare of all its citizens, regardless of their social identity.

* It has no role in public or private investment.

* It does not influence in policymaking with long-term consequences. For instance, demonetisation and Goods and Services Tax.

* If it is a think tank, it has to maintain a respectable intellectual distance from the government of the day.

* Instead, we see uncritical praise of government-sponsored schemes and programmes.

* It is not able to answer specific questions like why 90 per cent of the people are working in the unorganised sector and why more and more informalisation is taking place in the organised sector.

* Labour force participation rate of women is also declining, when neighbours like Bangladesh are registering an increase.

Arguments in favour of NITI Aayog

* NITI Aayog was formed to bring fresh ideas to the government.

* It can be visualised as a funnel through which new and innovative ideas come from all possible sources - industry, academia, civil society or foreign specialists and flow into the government system for implementation.

* Initiatives like Ayushmaan Bharat, our approach towards artificial intelligence and water conservation measures, and the draft Bill to establish a National Medical Commission to replace the Medical Council of India have all been conceptualised in NITI Aayog, and are being taken forward by the respective ministries.