With noted economist The Planning Commission was established on 15 March 1950, with the then Prime Minister Jawaharlal Nehru as the Chairman mainly to formulate a plan for utilisation of country's resources and definingthe stages, on the basis of priority, in which the plan should be carried out.
The first Five-Year Plan, launched in 1951, focused mainly on development of the agricultural sector and the emphasis of the eight subsequent Plans was on a growing public sector with massive investments in basic and heavy industries. However, since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and it has been suggested that the Planning Commission should henceforth play a strategic and indicative role, assisting the Centre and State in carrying out broader economic planning. Subsequently, it was scrapped last year and
Sixty-two-year-old Arvind Panagariya, who is named as the first Vice-Chairman of NITI Aayog (in contrast, Planning Commission had a Deputy Chairperson at the helm), is an Indian-American economist and Professor of Economics at Columbia University. A close associate of well-known trade economist Jagdish Bhagwati, Panagariya is known for his market-friendly views. He has earlier Chief Economist of Asian Development Bank and a Professor of Economics and Co-director, Centre for International Economics, University of Maryland at College Park. Holding a Ph D in Economics from Princeton University, Panagariya has also worked for
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Earlier this month, Prime Minister Narendra Modi, who is NITI Aayog’s Chairman, appointed economist Bibek Debroy and former Defence Research & Development Organisation (DRDO) chief V K Saraswat as full-time members.
Also, Union Home Minister
As NITI Aayog is expected to meet soon to review the 12th plan that runs up to 2017, there are concerns whether the government is going scrap Five Year Plans altogether. A section of economists has been arguing that the Five Year Plans should go along with the Plan Panel. Modi, too, has repeatedly said states should be given a free hand in determining their policies and plans, indicating that Five Year Plans are redundant.
Another topic of debate is the classification of public expenditure in terms of revenue and capital, and plan and non-plan expenditures. Plan expenditure is spent on government programmes and schemes, while non-plan expenditure includes spending on defence, subsidies and devolution to states. The government has been trying to remove the distinction as it has become dysfunctional and an obstacle in outcome-based budgeting. As NITI Aayog assumes responsibility as the government’s economic think tank, one is curious as to how it would approach plan and non-plan expenditures.
Given the multiplicity of NITI Aayog’s objectives—as a centre-state council, think tank and advisory body—its proposed structure seems to be cumbersome. Also, considering the untimely death of Planning Commission, which was not a Constitutional body and was not set up through legislation, one is forced to wonder about the fate of NITI Aayog, which too was not set up though legislation, in the long run.
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