NITI AAYOG Economic and Business Environment (Paper 3) – CSEET CURRENT AFFAIRS
The very objective of every country is to look after the affairs of the nation and its people. This is a pervasive activity with different sectors led by various institution or regulatory bodies. These institutions or regulatory bodies emerge at the need to regulate, formulate or to have a common platform to the nations with identical needs.
For example, let it be WHO, an international organization a specialized responsible for international public health. Let us take an example in India; Reserve Bank of India (RBI) is India’s central bank, which controls the issue and supply of the Indian rupee. It regulates the entire banking sector in India.
If you could find the essence above, these organizations are established for a purpose. Be it a national or international organization, it has a duty to perform and regulate some specific objectives on which it took shape as an institution or regulatory body.
Now in this article we are going have an overview of a National Body in India, which replaced the planning commission in India five years ago. Similar to other articles in CSEET, this shall also be in simple bulletin points for better understanding.
NITI stands for National Institution for Transforming India. It was established with the aim to achieve sustainable development goals with cooperative federalism by encouraging the involvement of State Governments of India in the economic policy-making process using a bottom-up approach.
To know the need of NITI Aayog, we have to know about its precursor.
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Planning Commission – Precursor
- The Planning Commission was established in March 1950 by a Government of India
- Prime Minister as Chairperson.
- To establish heavy industries through public investment for achieving rapid industrialization.
- Its functions was to assess and allocate plan resources, formulate plans and programs for area development, determine implementation methodology, identify resource constraints and appraise & adjust implementation.
- The Planning Commission from 1950 to 2014 formulated twelve five year plans.
- The Prime Minister announced the closure of the Planning Commission from the ramparts of Red Fort on August 15, 2014.
Now let take a break to know that need which is necessary for the study, the key take away that the planning commission was a top-down model wherein actions and policies are initiated at the highest level; hierarchical. So it flows from Central to State. After 6 decades of planning commission with the model a need for change was necessitated.
Establishment of NITI Aayog
The Government of India, in keeping with its reform agenda,
- Constituted the NITI Aayog to replace the Planning Commission.
- It was aimed to serve the needs and aspirations of the people of India.
- It acts as the quintessential platform of the Government of India to bring States to act together in the national interest, and thereby fosters Cooperative Federalism.
Now the significance of NITI Aayog to be noted here is that it is a bottom-up approach, wherein the policies arise from the bottom to top. This way the state governments are encouraged participation into the upbringing of the nation.
Scope of NITI Aayog-
- Was established in 2015
- Has been entrusted with the mandate of re-imagining the development agenda by dismantling old-style central planning.
- It was mandated to foster cooperative federalism, evolve a national consensus on developmental goals, redefine the reforms agenda, act as a platform for resolution of cross-sectoral issues between Center and State Governments, capacity building and to act as a Knowledge and innovation hub.
NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs. IT also provides relevant technical advice to the Centre and States while designing strategic and long term policies and programs for the Government of India.
Composition of NITI Aayog
The present NITI Aayog is constituted with the below participants (as on February 03, 2020) –
- Chairperson- Shri Narendra Modi, Hon’ble Prime Minister
- Vice-Chairperson- Dr. Rajiv Kumar
- Full-Time Members- Shri V.K. Saraswat, Prof. Ramesh Chand, Dr. V. K. Paul
- Ex-officio Members- Shri Raj Nath Singh, Minister of Defence; Shri Amit Shah, Minister of Home Affairs; Smt. Nirmala Sitharaman, Minister of Finance and Minister of Corporate Affairs; Shri Narendra Singh Tomar, Minister of Agriculture and Farmers Welfare; Minister of Rural Development; Minister of Panchayati Raj.
- Special Invitees- Shri Nitin Jairam Gadkari, Minister of Road Transport and Highways; Minister of micro, Small and Medium Enterprises; Shri Thaawar Chand Gehlot, Minister of Social Justice and empowerment; Shri Piyush Goyal, Minister of Railways; and Minister of Commerce and Industry; Shri Rao Inderjit Singh, Minister of State (Independent Charge) of the Ministry of Statistics and ProgrammeImplementation and Minister of State (Independent Charge) of Ministry of Planning.
- Chief Executive Officer- Shri Amitabh Kant
Functions of NITI Aayog
The primary idea of the NITI Aayog as mentioned above was to bring in-state participation. This brought in letter and spirit was anticipated to deliver the below results:
- Competitive Federalism: NITI Aayog came up with performance-based rankings of States across various verticals to foster a spirit of competitive federalism. It helps to identify the best practices in different States in varioussectors and then try to replicate them in other States. For example: Healthy states Progressive India etc.
- Cooperative Federalism: The composition NITI Aayog, gives better representation of states in this body which facilitates direct interactions with the line ministries, also helps to address issues in a relatively shorter time.
- Greater Accountability: NITI Aayog established a Development Monitoring and EvaluationOffice which collects data on the performance of various Ministries on a real-time basis. This data is used at the highest policymaking levels to establish accountability and improve performance. Though there were 12 Five-Year Plans before this, they were mostly evaluated long afterthe plan period had ended. Hence, there was no real accountability.
- Think tank of innovative ideas: NITI Aayog is visualized 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.
- Convergence for resolution: Being a common point for similar issues faced by different sectors, states etc., it acts as a convergence point and platform to discuss these issues.
NITI Aayog in News
As per a recent article in Times of India dated February 03, 2020 under heading States need to boost ease of doing business. It is expected that State governments will now have to accelerate their move on ease of doing business to remove bottlenecks for investors and the taxpayer charter will help instill confidence and end harassment.
As per NITI Aayog, “Most follow-up now has to be done at the level of the states. The Economic Survey gives the example of, if you want to run a restaurant, you need 43 clearances. In those 43 clearances, I doubt if more than one or two would be at the central government level, the rest would be municipal, state, that is where the rubber meets the road. Investment climate will be improved now by reforms of state governance and ease of doing business”.
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