Topic 03 of 6 · Chapter 02 · Indian Economy
NITI Aayog — Structure, Functions & Difference from Planning Commission
Why NITI Aayog replaced Planning Commission, its structure, functions, and key initiatives like Aspirational Districts.
📋 In This Article
1. What is NITI Aayog?
NITI Aayog stands for National Institution for Transforming India. It was established on January 1, 2015 to replace the Planning Commission. Like the Planning Commission, it is an extra-constitutional body created by a Cabinet Resolution.
💡 Full Form: NITI = National Institution for Transforming India. “Niti” also means “policy” in Sanskrit. The name reflects the shift from top-down planning to policy advisory role.
2. Structure of NITI Aayog
- Chairperson: Prime Minister of India
- Vice-Chairperson: Appointed by PM (equivalent to Deputy Chairman of Planning Commission)
- Governing Council: Chief Ministers of all States + Lt. Governors of UTs
- Regional Councils: For specific regional issues
- Full-time Members: Experts in various fields
- Part-time Members: Leading academics and practitioners
- Ex-officio Members: Up to 4 Cabinet Ministers
- CEO: Secretary-level officer appointed by PM
⭐ Key Difference: Planning Commission had a Deputy Chairman. NITI Aayog has a Vice-Chairperson. Planning Commission had no role for Chief Ministers. NITI Aayog’s Governing Council includes ALL Chief Ministers — reflecting cooperative federalism.
3. Functions of NITI Aayog
- Provide strategic and technical advice to the government
- Foster cooperative federalism — involve states in policy making
- Design long-term policies and programmes
- Monitor and evaluate implementation of programmes
- Provide a knowledge and innovation hub
- Resolve inter-sectoral and inter-departmental issues
- Maintain a State of the Nation report
✅ Key Difference from Planning Commission: NITI Aayog does NOT allocate funds to states. Fund allocation is done by the Finance Ministry and Finance Commission. Planning Commission used to allocate plan funds — this was a major source of its power.
4. NITI Aayog vs Planning Commission
| Feature | Planning Commission | NITI Aayog |
|---|---|---|
| Established | March 15, 1950 | January 1, 2015 |
| Head | Deputy Chairman | Vice-Chairperson |
| States’ role | Minimal — top-down approach | Central — Governing Council has all CMs |
| Fund allocation | Yes — allocated plan funds to states | No — only advisory role |
| Approach | Centralised planning | Cooperative federalism |
| Five Year Plans | Prepared Five Year Plans | No Five Year Plans — prepares Vision Documents |
| Focus | Resource allocation | Policy advisory, innovation, monitoring |
5. Key Initiatives of NITI Aayog
- Aspirational Districts Programme: Focus on 112 most backward districts for rapid development
- India Innovation Index: Ranks states on innovation capacity
- SDG India Index: Tracks progress on Sustainable Development Goals
- Vision 2047: Long-term vision for India at 100 years of independence
- Atal Innovation Mission (AIM): Promotes innovation and entrepreneurship
- SATH Programme: Sustainable Action for Transforming Human Capital
6. Key Points for Exam
🔑 Must-Remember Facts
- NITI Aayog = National Institution for Transforming India
- Established: January 1, 2015
- Chairperson: Prime Minister
- Governing Council includes all Chief Ministers
- NITI Aayog does NOT allocate funds to states
- Replaced Planning Commission which was dissolved on January 1, 2015
- First Vice-Chairperson: Arvind Panagariya
- Aspirational Districts Programme — 112 backward districts
- NITI Aayog prepares Vision Documents (not Five Year Plans)
- Last Five Year Plan: 12th Plan (2012-17)