When the Modi government took charge in May 2014, one of the first pre-poll promises that it kept, was to scrap the Planning commission. As we have written before, we believed that the Commission was a relic of the days of the License Raj days. Hence, it needed to go. The only question on our minds was concerning the institution that would replace it. Our question has now been answered.
The Planning Commission has now been officially replaced by the NITI (National Institution for Transforming India) Aayog. Its role will be that of a dynamic think tank of the central and state governments. This is certainly a welcome move. The NITI Aayog will provide strategic and technical advice to the government across the full spectrum of key policy decisions.
As an institution that will ideate and provide policy direction, the NITI Aayog does appear to be a good alternative to the Planning Commission. A source of confidence also comes from the structure of the NITI Aayog. It will be led by the PM and will have CMs of all states on its governing council. This could effectively end the impasse between the central and state governments when it comes to important policies like the GST bill.
India faces a host of problems which if left unresolved, will prevent the country's rise in the world. It would be impractical to expect the NITI Aayog to find solutions for them all. However, in the field of economics and policy making, it can certainly break new ground. We hope the NITI Aayog plays an active role in energising the government machinery. By providing sound economic direction to the government and reducing friction between the centre and the states, it can play a role of a catalyst for growth.