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Difference Between NITI Aayog and Planning Commission

Last Updated : 29 Nov, 2021
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In March 1950, the Government of India passed a resolution establishing the Planning Commission. It was created to help the government accomplish its stated goals of fostering a quick improvement in the people’s quality of life by effective exploitation of the country’s resources, greater output, and giving opportunities for everybody to participate in the community’s service. The Planning Commission was tasked with assessing all of the country’s resources; supplementing those that were insufficient; devising plans for the most efficient and balanced use of resources, and deciding priorities. In 1951, the country’s first five-year plan was implemented. The Indian government replaced the Planning Commission, which was created in 1950, with the NITI Aayog. This action was taken to better fulfill the people’s needs and ambitions with a focus on a “Bottom-Up” approach to envision the goal of Maximum Governance, Minimum Government, mirroring the spirit of “Cooperative Federalism.”. The Government of India’s top policy think tank, NITI Aayog, provides directional and policy suggestions. NITI Aayog offers appropriate technical assistance to the Centre, States, and Union Territories in addition to creating strategic and long-term policies and programs for the Government of India. This action was taken to better fulfill the people’s needs and ambitions. NITI Aayog is a significant evolutionary development in that it serves as the Government of India’s primary platform for bringing the States together in the national interest, fostering cooperative federalism.

Concepts adopted by NITI Aayog differ from the Planning Commission:

1. Organization:

A deputy chairperson, a member secretary, and full-time members make up the Planning Commission. The regular procedure is used to nominate secretaries or member secretaries. New CEO and Vice-Chairperson positions have been created at NITI Aayog. There will be five full-time and two part-time members. Ex-officio members will include four cabinet ministers. The Prime Minister appoints the CEO directly. The position of CEO is equivalent to that of a Secretary. Ex-officio members would be four Cabinet members. Two part-time members and five full-time members make up the NITI Aayog.

2. Planning:

With public sector resources, the Planning Commission favors top-down planning for government. In a market economy that is connected with the globalized globe, the NITI Aayog develops national development strategies. Recognizing the states’ rising autonomy and responsibility, the NITI Aayog recognizes and allows for more engagement by states and other stakeholders (civil society). Furthermore, one of the key pillars of the NITI Aayog is openness and e-governance, which contrasts sharply with the old Planning Commission’s planning style.

3. Finance and States’ Role:

With the introduction of the Planning Commission, the role of the Finance Commission was severely decreased. The Planning Commission was in charge of allocating monies. The NITI Aayog has no responsibility for the allotment of funds. The Finance Ministry will decide on the tax portion that states will get, as well as money distribution and Union support. The Planning Commission had the authority to provide funding to state governments and several central government ministries for a variety of national and state-level programs and projects. The Planning Commission developed policies first, and subsequently, state governments were consulted on funding allocations for programs and projects. The ultimate policy will produce fruit at NITI Aayog following adequate discussions with state governments throughout the policy formation stage. NITI Aayog offers appropriate technical assistance to the Centre, States, and Union Territories in addition to creating strategic and long-term policies and programs for the Government of India.

4. Reporting and Constitution:

The National Development Council, which included State Chief Ministers and Lieutenant Governors, reported to the Planning Commission. The Governing Council of NITI Aayog consists of State Chief Ministers and Lieutenant Governors. The Planning Commission, which is now defunct, was an Executive Body. Because it is not named in the Indian Constitution and was not constituted by an Act of Parliament, NITI Aayog is likewise an Executive Body. However, it may be turned into a Statutory Body if necessary by passing a statute in Parliament; UIDAI is one example.

5. Good governance principles include:

The governance principles adopted by the two planning organizations are perhaps the most important variation between them. The modern NITI Aayog aspires to foster an open, transparent, responsible, proactive, and purposeful governing approach. In the case of the former Planning Commission, these concepts were there in theory but mostly lacking in practice. The former Planning Commission was founded as ‘a staff agency’, but over time it grew into a strong and directive body, deficient in good governance norms.

6. Key role and objectives:

Albeit, the former Planning Commission worked as an extra-Constitutional body with broad powers over financial allocation and use, the NITI Aayog (while non-constitutional) has a more consultative role and a lesser executive role. Its primary function is that of a “think tank.” While the PC has considerable executive powers, the NITI Aayog functions as a policy research organization that assists the government (executive) in devising effective policies for the creation of a “new India.”

7. The number of participants:

There were eight full-time members on the previous Planning Commission. The number of full-time members on the NITI Aayog board might be lower than those on the Planning Commission.


With changing conditions, new ideas (such as sustainable development and cooperative federalism) were added to the planning objectives, resulting in the formation of NITI Aayog. However, the Planning Commission’s contributions to the nation’s progress must not be overlooked. In addition, several flaws in the operation of NITI Aayog must be addressed as soon as possible. The NITI Aayog’s replacement of the Planning Commission will help shift the focus away from projects and programs and toward policies and institutions, from spending inputs to real results through stronger governance, and away from political squabbling over incremental appropriations and toward new challenges and possibilities.

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