Niti Aayog falls short of expectations

The first meeting of NITI Aayog’s Governing Council was held in February 2015. Thereafter, three Sub-Groups of Chief Ministers were constituted by the Prime Minister, one each on rationalization of centrally sponsored schemes, skill development, and Swacch Bharat, with NITI Aayog acting as the secretariat. During its first three months, it initiated the work relating to the Mid-Term Appraisal of the Twelfth Five-Year Plan.

All the three Sub-Groups of Chief Ministers submitted their reports during the year 2015–16. In the finalization of these reports, the officials of NITI Aayog seemed to have played their role more as agents of the Central Government than as technical advisers.

This was evident from the fact that just a day after the presentation of the report of the Sub-Group of Chief Ministers on Rationalisation of Centrally Sponsored Schemes, the Ministry of Finance issued a notification without taking on board most of its recommendations. The fate of the reports by the other two Sub-Groups seems to have been similar.

In the second year of its operation, a second meeting of the Governing Council was held, which emphasized the shift in focus from planning to policy to influence the decisions of the private as well as the public sectors. The conference also emphasized the need for greater interaction between the Centre and the States.

In this context, it was suggested that NITI Aayog should act as a repository of best practices for States and provide them advocacy support in resolving matters pending with the Union Ministries.

The Aayog took up the pending cases of the State of Telangana with the Union Ministries concerned while requesting other States to make use of its intermediation. But in retrospect, this role was more recommendatory and most of its suggestions were not acted upon by the Union Ministries concerned.

The Aayog also held a conference in July 2017 with the States to discuss their role in transforming India. However, the actions taken on the suggestions made by the States are still not known.

It also published a number of papers on sectors like agriculture, health, education, skill development, managing urbanization, power, infrastructure, social justice, etc. In the area of policy advocacy, it prepared a draft bill on agricultural land leasing and one on regulatory reforms, and completed the appraisal of the Twelfth Five-Year Plan suggesting policy correction in a number of areas. Most of these areas are in the domain of States. During the year 2016–17, the Aayog included, under the label of ‘notable initiatives’, the constitution of a Committee of Chief Ministers on Digital Payments and initiated the process to develop identified islands for maritime trade, shipping, and fisheries, all areas identified as priority by Central Government.

The Aayog prepared the first-ever indices measuring States’ performance in health, education, and water management. It also discussed issues relating to the removal of distinction between Plan and non-Plan expenditure, and the attainment of targets set under Sustainable Development Goals (SDGs) with State officials. Further, it took up the formulation of a Fifteen-Year Vision document as well as a Seven-Year Strategy and a Three-Year Action Agenda to ensure implementation of the Vision. Of these, the Three-Year Action Agenda has already been released and placed in the public domain. There is no evidence that the States have participated in the preparation of this Vision.

The Aayog’s Annual Report gives a detailed account of its work during the year 2017–18. Of relevance to Union–State relations is the draft roadmap for the development of the Northeastern and Eastern States, which is laudable. There is a separate section devoted to cooperative federalism. The report highlights two key aspects, and these relate to the joint development of the national developmental agenda by the Centre and the States, and the advocacy of State perspectives with Central Ministries. It also lists a series of initiatives to ensure that ‘States are equal partners in the policy-making and implementing process’. Among the items listed are the third meeting of the Governing Council, the National Conference of Chief Secretaries on drivers for transforming India, and several initiatives relating to agriculture.

To sum up, the activities of the Aayog since its inception have mainly been confined to bringing out reports and occasional papers on various sectors of the economy; preparing draft legislations and policy notes for the consideration of the Central Government; evaluating Central Government schemes and bringing out a compilation of best practices in certain sectors; holding conferences with State officials; and working as a secretariat for the Sub-Groups of Chief Ministers.

The singular achievement of NITI Aayog is that it has not irritated the States, as it has dispensed with the Annual Plan approval and the practice of giving grants.

It is clear that NITI Aayog is meant to be a replacement of the Planning Commission. In many ways, it is a new incarnation that warrants an initial assessment. It is intended to address the observed weaknesses in the functioning of the Planning Commission. It is also expected to give a new orientation to the manner in which the developmental process is managed. It seeks to address the most important aspect of the weaknesses in the working of the erstwhile Planning Commission, viz., the management of Union–State relations.

NITI Aayog’s mandate is very broad and sweeping. It has inherited the physical infrastructure as well as the manpower from the erstwhile Planning Commission. (It has, however, taken a number of experts/advisers laterally.) Yet, the underlying ecosystem that governs the thinking has not changed demonstrably. Above all, the Planning Commission had a special stature by virtue of its Deputy Chairman being invited to the Cabinet meetings of the Union Government.

The Vice Chairman of NITI Aayog has not been extended such a courtesy. In a way, therefore, NITI Aayog started with some disadvantages. The Aayog’s performance can be assessed with reference to what was promised when it was established.

NITI Aayog was expected to address new realities of macroeconomic management that were missed by the Planning Commission. The stated objective was that the States would be allowed to implement their plans or functions assigned to them in the Constitution without having to get them approved. To this limited extent of giving up the practice of formal approval of the State plans, NITI Aayog has delivered.

The official notification establishing NITI Aayog recognized the pitfalls of the one-size-fi ts-all approach inherent in Central Planning. It is not very clear in what manner this has been changed. The notification also explained that the nature of the Planning process would be changed to align with the shifts in the economy. From the Annual Reports available, it is not very clear in what manner the process has been improved.

The notification also mentions the importance of making States the actual drivers of national development. However, most of the programmes initiated in the recent past were conceived and initiated by the Prime Minister and the Central Government, and the States have been more or less persuaded to implement them. It is difficult to find evidence that policies and programmes have evolved out of consultations between the Union and the States. On the contrary, many flagship schemes carry the ‘prefix’ ‘Pradhan Mantri’, and are declared as Central Government schemes.

The major complaints of States in regard to the functioning of the Planning Commission remain unaddressed. The complaints have largely been on the perception that the Centre is encroaching upon the States’ responsibilities; imposing its own priorities while funding; assuming, without basis, that governance in States is weak despite the Union’s own dismal record in administering Union Territories; taking credit for schemes that are jointly funded; and continuing to advocate a one-size-fits-all approach in administration.

The Aayog has missed some opportunities to make a qualitative difference. The CSS had to be reformed in the light of the recommendations of the Fourteenth Finance Commission.

Though the Niti Aayog was involved in the process, the manner in which these schemes were modified shows that the effort was only to shift greater responsibility onto States in terms of financing. The reform does not in any manner reflect the qualitative change in the design and implementation of the Central schemes that was promised when the Planning Commission was wound up.

A second opportunity arose when the distinction between Plan and non-Plan was removed. At that point, the organization had an opportunity to insist on taking a sector-wise comprehensive view of capital and revenue expenditures. However, that has not been done.