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8/27/2016 1
8/27/2016 2
Credit Seminar
SPEAKER: SHEELA KHARKWAL
2
NITI AAYOG: AN OLD WINE IN NEW BOTTLE?NITI AAYOG: AN OLD
WINE IN NEW BOTTLE?
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• Introduction
•Timeline of Planning in India and A brief overview of the Five Year
Plans
•Planning Commission: Criticism/Anti-Arguments
•NITI Aayog and its Organizational set-up
•Structural comparison between planning commission and NITI Aayog
•Objectives and functions of NITI Aayog
•Functional comparison between planning commission and NITI Aayog
•A look on NITI Aayog through “Economic Prism”
•Niti Aayog: Criticism/Anti-Arguments and Challenges ahead
•Conclusion
contents
Introduction
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5
“Constant development is the law of life, and a man who always
tries to maintain his dogmas in order to appear consistent drives
himself into a false position”. -Mahatma Gandhi
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Timeline of Planning in India
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A Brief Overview of Five Year Plans
Planning Commission’s responsibilities:
Periodic assessment of all the resources.
Augmenting deficient resources.
Formulating plans for efficient, judicious and balanced utilization of resources.
Appraisal and evaluation of programmes.
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So far 11 FYP’s have been completed. 12th FYP is under implementation since Apr 1, 2012 and will continue till March 31, 2017.
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I II III IV V VI VII VIII IX X
2.1
4.5
5.6 5.7
4.4
5.2 55.6
6.5
8
3.6
4.3
2.83.3
4.8
5.76
6.8
5.4
7.6
GROWTH RATE (% of GDP)Target achieved
Source: Planning Commission of India
Economy
Demography
Globalisation
Privatisation
Technology
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Planning Commission: Criticism/Anti-Arguments
>9% GDP, during 2005-07 THANKS American boom prior to sub-prime crisis
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Planning Commission
Almost all nations of
world experienced
high growth.
Inflation
Inflation rose nonstop during the 11th FYP.
Infla
planning commission brags reducing
poverty line on Tendulkar’s parameters.
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27 crore People below poverty Line
37 crorepeople BPL.
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PC: Extra-Constitutional and Non-Statutory body
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ConstitutionPlanning Commission
PC: one size fits all and
we know best
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States unenthusiastic of central schemes :NO direct funding to states
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Funds from centre
NGO’s and DRDA’s
States
PC Office manned by Generalist IAS/IES with short tenure
panel members filled with academicians and nonperforming NGO’s.
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Need of subject specialists with International exposure like Mr. Raghuram Rajan
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PC: An agent of the ruling party or
coalition at the centre.
Other states
From the
center
Government needs to become an “enabler” rather than a “dictator”.
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• NITI stands for National Institution for Transforming India.
• NITI = Policy
Aayog = Commission
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Structure of NITI
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Governing council
Regional councils
Full time members
Part time members
Ex-officio members councils
Special invities
Chairperson
(Prime Minister)
Vice Chairperson
(Nominated by PM)
Chief executive officer
(Nominated by PM)
(Max 2, from
relevant
institutions)
(Max 4,
from union
ministries)
(Nominated
by PM)
Compostion of NITI Aayog
Structural comparison between NITI Aayog and PC
Position Planning Commission NITI Aayog
Born 1950, March 15th 2015, January 1st
Chairman Prime minister Prime minister
Vice
ChairmanCabinet Minister rank Again Cabinet Minister rank
CEO
(secretary
in PC)
Member-Secretary (IAS)A secretary level bureaucrat with
fixed tenure.
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PositionPlanning
CommissionNITI Aayog
Ex-officio
members
Finance Minister
Planning
minister
PM can nominate four-Union ministers. At
present:
1. Home 3. Finance
2. Railway 4.Agriculture
Full time
members
8 full time members,
who enjoyed “Minister
of State” rank.
Less members
At present only 2.
Rank: Same
Special Invitees
Union ministers for
1. Transport 2.HRD 3.Social Justice
+PM can invite other experts as and when
needed.8/27/2016
28
PositionPlanning
CommissionNITI Aayog
part-time membersTech experts from research
institutes. Rotational posts.
Governing Council
Chairman: Prime minister
Chief ministers of all states
Lieutenant governors of all
Union territories.
Ad hoc Regional
Councils
Will have CMs of states that fall
in the region.
To deal specific issue concerning
a group of states for example
irrigation, naxal-problem,
infrastructure etc.
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Mandate of NITI
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To foster cooperative federalism
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Objectives and functions
To serve as a Think tank, adirectional and policy dynamo for thegovernment.
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Ideas“How” more imp
than “what”
Bottom up approach: in plan formulation
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To solve issues and impediments of state in time bound manner at the level of state itself.
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To recommend a national agenda includingstrategic and technical advice on elementsof policy and economic matters.
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To create a knowledge, innovation and entrepreneurial support.
To design strategic and long term policy andprogramme frameworks and initiatives, and monitortheir progress and their efficacy.
To focus on technology up gradation and capacitybuilding for implementation of programmes andinitiatives.
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To pay special attention to the sections of oursociety that may be at risk of not benefittingadequately from economic progress.
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Functional comparison : Planning Commission Vs NITI
Aayog
Planning commission NITI Aayog
function Design FYP-Five year plans. Design national agenda andcooperative federalism.
Mostly work as a “policy-formulation-hub”.
Money
Matters
Decide two “money” matters:
1. How much money to give to eachstate for centrally sponsoredschemes (CSS)
1. How much money to give for eachstate’s own state-five-year-plans.
The Press release is ‘silent’ on
money/funding. so, most probably
it’ll be left to finance ministry.
.8/27/2016 39
Planning Commission NITI Aayog
States
Role
States/UT were represented in
National Development
Council.
PC framed FYP=>went to
Cabinet=>NDC approved
FYP=>Tabled in parliament.
States/UT represented in Governing
council.
No specific mention about whether they
can approve/reject/amend Niti Aayog’s
proposals!
Approach One size fits all, top-down
socialist planning.
Press release talks about participatory
planning
But how exactly will they do that? No
specific details laid out.
Given the entry of Free marketeconomists and Technocrats, mostprobably it’ll be an ‘indicative planning’
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0
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A look on NITI Aayog
through
8/27/201642
NITI Aayog
resource transfer
Fiscal federalism?
• Economistssceptical about centralized bureau of planning.
• Since 8th FYP role of private sector ed, Need for Indicative type of planning
• Govt. focus Broad issues rather than fixing targets.
• Biggest drawback States Receiving end with begging bowl rather than partners and Tied Funds
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Resource transfer
• At present Govt. is silent in this matter
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• 60% Resource transfer takes place through Finance Commission
•Only 2-3% through Planning Commission
•Additional responsibility can easily be shifted to Finance commssion
Some experts believe Inter-state council will decide money allocation to states, then finance ministry will release the fund.
Planned and Non-plan expenditure
• A Big issue since long
• Report of the panel headed by Dr. C. Rangrajan: Distortions crept in by this Illogical distinction
• Setting up of NITI, changes entire way is an important question??
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• Who decides Special category status of states??
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Niti Aayog: Criticism/Anti-Arguments
NITI Aayog is long on generalities and short on specifics.
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LOCKED!!!!!
NITI Aayog coverage
Opposition views NITI Aayog :a ‘gimmickry’ and ‘an old wine in new bottle.’
NITI Aayog, like Planning Commission, is a non-Constitutional body.
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• Planning commission used tomonitor of human development inthe States, Sub-plans for women, SCand ST.
Niti Aayog doesn’t sayhow they’ll do it???
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ZIPPED
Mr. Modi’s “arbitrary decision” to dismantle the PlanningCommission, without taking NDC or states intoconfidence this undermines cooperative federalism.
(Kerala CM)
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Challenges ahead
• Quality of experts entertained would be the determining factor of the
value of Think tank.
• For achieving the goal of Cooperative federalism, the new governing
council has to be more active. Feasibility of convening meetings
with all chief Ministers and LT’s (Governing council of NITI Aayog) in
one place at regular interval?
• Few questions with reference to the functioning of new structure need tobe answered thoroughly, like who would
Lobby with the finance ministry to protect plan expenditure,
Determine transfers to centrally sponsored scheme, and
Assign special category status of states in the absence of
planning commission?8/27/2016 53
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At least 100 IAS/IESofficers will now have to beaccommodated in otherministries.
How they’ll be integrated inthe new system?? No clearanswers given in the press-release.
Sudden dismantling ‘unplanned’ economy inwhich the corporate will call the shotsspur privatization.
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Conclusions
• This replacement : second generationreforms
• Decision: bold and long overdue initiative..
• There is no point in quarreling with thename.
• The substance behind the change matters.
• Therefore clarity is needed in manyaspects. Once answers to these emerge, thenthe new body could function smoothly.
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To change the emphasis• from the projects and programs to policy Institutions,
• from expenditure inputs to real outcomes throughbetter governance and,
• from political disputation over Incremental allocationsto new challenges and opportunities in a globalenvironment.
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Expectations
• Structural differences are not much but inclusion ofCM’s and Lt. Governors in the council a break with the past.
• Though there may be some Political influence, but it ismuch too early to declare it as Old Wine In NewBottle.
• A fair chance should be given to prove that the governmentinitiatives will deliver.
• The Aayog’s functioning could make or break the economicdevelopment of India in the future.
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