Planning Commission to NITI Aayog

Planning Commission to NITI Aayog

Planning Commission

Introduction

• Planning Commission was not mentioned in the Constitution. Planning Commission was an economic advisory body set up by a resolution of the Union Cabinet on 15th March, 1950.

• Pt. Jawaharlal Nehru was the first, and Narendra Modi is the last chairman of the Planning Commission. Gulzari Lai Nanda was the Deputy Chairman of the 1st Planning Commission.

Composition

The Planning Commission consisted of:

• The Chairman

• Four part-time Ministers

• Seven full-time members

The Prime Minister had been the Chairman of the Planning Commission.

Functions

The main functions of the Planning Commission were:

1. To prepare an integrated Five-Year Plan for the most effective and balanced utilisation of the country's resources for economic and social development.

2. To act as an advisory body to the Union Government and State Governments.

Replacement

• On 15th August, 2014, the Prime Minister Narendra Modi announced that a new institution would be formed in place of the Planning Commission—NITI Aayog.

NITI Aayog

Introduction

• On the 1st January 2015, by resolution, the Government of India constituted a 'NITI Aayog' (NITI stands for 'National Institution for Transforming India').

Composition

• The Prime Minister of India is the Chairperson.

• The Chief Ministers of all the States and the Lt. Governor of Andaman & Nicobar Islands (UT) are the members of NITI Aayog's Governing Council.

• The Aayog will have five full-time members, two permanent members, four Union Ministers as ex officio members, and three Union Ministers as special invitees.

Leadership

• Arvind Pangariva (An Indo-US economist and former Chief Economist of the Asian Development Bank) was the first Vice Chairman of the NITI Aayog.

• The first meeting of the newly constituted planning body, the NITI Aayog, was chaired by the Prime Minister, Narendra Modi, in February 2015.

National Development Council (NDC)

Introduction

• The National Development Council was formed in 1952 to associate the States in the formulation of the Plans.

Composition

• All members of the Union Cabinet

• Chief Ministers of States

• Administrators of the Union Territories

• Members of the erstwhile Planning Commission (now NITI Aayog)

• The Prime Minister of India is the Chairman of the NDC

Functions

1. Review the working of the national plan.

2. Recommend measures to meet the targets of the national plan.

Note: It is an extra-constitutional and extra-legal body.

National Integration Council

Introduction

• National Integration Council was set up in 1986 to deal with welfare measures for the minorities on an all-India basis.

Composition

It includes:

• Union Ministers

• Chief Ministers of States

• Representatives of National and Regional political parties

• Labour and women representatives

• Public figures and media representatives

Note: NDC is a non-constitutional body.

Finance Commission

Constitutional Basis

• The Constitution provides for the establishment of a Finance Commission (Art. 270, 273, 275, and 280) by the President. The first Finance Commission was constituted in 1951.

Finance Commissions of India

Composition

The Finance Commission consists of a Chairman and four other members.

• Qualifications:

  • Chairman: persons who have had experience in public affairs

  • Members: persons who

    • are or have been or are qualified to be appointed judges of the High Court; or

    • have special knowledge of the finance and accounts of the government; or

    • have had wide experience in financial matters and administration; or

    • have special knowledge of economics

• Members hold office for such period as may be specified by the President and are eligible for reappointment.

Functions

1. To recommend to the President the basis for the distribution of the net proceeds of taxes between the centre and states.

2. To recommend the principles which should govern the grants-in-aid to be given to states out of the consolidated Fund of India.

3. To tender advice to the President on any other matter referred to the Commission in the interest of sound finance.

4. To suggest amounts to be paid to the states of Assam, Bihar, Odisha, and West Bengal instead of the assignment of a system of export duty on Jute products.

The commission submits its recommendations to the President, which are generally accepted by the Central Government.
The recommendations of the Commission are applicable for five years.

Final Thoughts

The Planning Commission, though not a constitutional body, played a pivotal role in shaping India’s economic policies through Five-Year Plans before being replaced by NITI Aayog in 2015 for a more dynamic and cooperative federal approach.

The formation of NITI Aayog, along with the National Development Council and National Integration Council, reflects India’s evolving planning and governance structure, ensuring state participation and inclusive growth. On the other hand, the Finance Commission, a constitutional body, continues to guide fiscal federalism by recommending tax distribution and grants between the Centre and States.

Together, these institutions highlight India’s commitment to planned economic development, federal cooperation, and financial accountability to achieve balanced and sustainable growth.