Q10.How are the principles followed by NITI Aayog different from those followed by the erstwhile planning commission in India?

India's economic governance evolved significantly with the replacement of the Planning Commission (PC) by NITI Aayog (NA) in 2015. This shift marked a fundamental change in the nation's development approach, moving from a centralized model to one emphasizing cooperative federalism and market orientation.

Fundamental Differences in Guiding Principles

The core divergences between the erstwhile Planning Commission and NITI Aayog are evident in their foundational philosophies and operational principles:

• Planning Approach: PC followed a top-down, centralized model for resource allocation. NA adopts a bottom-up approach, fostering cooperative federalism and state participation.
• Role & Mandate: PC was a powerful resource allocator and five-year plan formulator with financial powers. NA is a think-tank, policy forum, and strategic guide, without financial allocation.
• States' Involvement: PC had limited state involvement. NA actively integrates states through its Governing Council in policy formulation.
• Economic Philosophy: PC operated within a command economy framework. NA promotes market-oriented reforms, innovation, and private sector engagement.
• Nature of Body: PC acted as a powerful executive arm. NA is advisory, facilitative, and focuses on monitoring. Both are extra-constitutional.
• Focus Areas: PC concentrated on sectoral planning and resource distribution. NA prioritizes long-term strategy, technology, innovation, and competitive federalism.

Significance of the Shift

This transformation signifies a move towards a more inclusive, responsive, and competitive federal structure. NITI Aayog aims to leverage states' strengths, promote innovation, and adapt to global economic dynamics, enhancing India's development trajectory.

The transition from the Planning Commission to NITI Aayog represents a paradigm shift from a command-and-control economy to a collaborative, market-friendly, and federalist approach, better suited for India's diverse and dynamic development needs.