Difference between NITI Aayog and Planning Commission, Key Points

Q: Why was the Planning Commission replaced by NITI Aayog?

The Planning Commission was seen as outdated and centralized. NITI Aayog was formed to promoting federal cooperation, improve policy innovation, and ensure state-specific planning.

Q: What are the main functions of NITI Aayog?

It provides strategic and technical advice to the Centre and states, encourages innovation, and acts as a platform for knowledge sharing and monitoring development programs.

Q: Does NITI Aayog prepare Five-Year Plans?

No. NITI Aayog does not prepare Five-Year Plans. It promotes long-term vision documents, sector-specific strategies, and actionable policy frameworks.

Q: Which body has fund allocation powers, Planning Commission or NITI Aayog?

The Planning Commission had fund allocation powers. NITI Aayog is advisory in nature and does not allocate funds.

Q: What are some flagship initiatives of NITI Aayog?

Key initiatives include Atal Innovation Mission, Aspirational Districts Programme, SDG India Index, and Ease of Doing Business Index for States.

Table of Contents☰

The NITI Aayog, established as a successor to the Planning Commission, marks a transformative shift in India’s policy-making framework. It adopts a bottom-up, participatory approach aimed at promoting cooperative federalism and catering to the diverse development needs of individual states. With an emphasis on innovation, sustainable development, and institutional reform, NITI Aayog plays an important role in driving inclusive and adaptive growth across the country.

NITI Aayog

NITI Aayog stands for National Institution for Transforming India. It was established on January 1, 2015 by the Government of India, replacing the Planning Commission. It serves as the apex public policy think tank of the country, focusing on cooperative federalism, innovation, and evidence-based policymaking.

Key Features

A policy think tank, not a fund-allocating body.
Promotes bottom-up planning with state involvement.
Encourages innovation, digital governance, and sustainable development.
Plays a major role in monitoring and evaluating government schemes.
Chaired by the Prime Minister of India.

Planning Commission

The Planning Commission was established in 1950 by a Resolution of the Government of India, based on the recommendations of the Advisory Planning Board (1946). It was responsible for formulating Five-Year Plans and allocating funds to central ministries and states.

Key Features

Functioned as a centralized body with fund allocation powers.
Focused on top-down planning and centralized development models.
Emphasized economic planning through Five-Year Plans.
Criticized for being bureaucratic and rigid.
Also chaired by the Prime Minister of India.

Difference between NITI Aayog and Planning Commission

The NITI Aayog (National Institution for Transforming India) is a premier policy think tank established by the Government of India on 1st January 2015. It was set up to replace the Planning Commission and to introduce a more adaptive and consultative approach to policy formulation. Notable initiatives of NITI Aayog include the “15-Year Vision Document” and the “7-Year Strategy and Action Plan,” which aim to guide India’s long-term and medium-term development.

The Planning Commission, which was established on 15th March 1950 and functioned until its dissolution on 17th August 2014, was responsible for formulating Five-Year Plans that guided India’s economic strategy for decades. The following table outlines the key Difference between NITI Aayog and Planning Commission.

Difference between NITI Aayog and Planning Commission
Aspect	NITI Aayog	Planning Commission
Established In	2015	1950
Nature	Policy think tank	Centralized planning body
Approach	Bottom-up, cooperative federalism	Top-down, centralized planning
Fund Allocation Powers	No fund allocation role	Had powers to allocate funds to states and ministries
Planning Model	No Five-Year Plans; promotes medium and long-term strategies	Formulated Five-Year Plans
Focus Areas	Innovation, technology, monitoring, sustainable development	Industrial growth, infrastructure, poverty alleviation
State Involvement	Active participation through Governing Council	Limited involvement of states
Structure	Dynamic and flexible	Hierarchical and rigid
Chairperson	Prime Minister	Prime Minister
Key Initiative	Atal Innovation Mission, SDG Index, India@75	Five-Year Plans, Annual Plans

Why Was NITI Aayog Formed?

The Planning Commission faced criticism for:

Being bureaucratic and slow in execution.
Ignoring state-specific needs in a rapidly evolving economy.
Focusing too much on central control rather than federal cooperation.

NITI Aayog was established to:

Promote competitive and cooperative federalism.
Encourage innovation and policy experimentation.
Provide policy inputs, monitoring, and evaluation.

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