To be headed by Prime Minister Narendra Modi, the new body will have a governing council comprising chief ministers of all states and Lt Governors of Union Territories and will work towards fostering "co-operative federalism" for providing a "national agenda" to the Centre and states. The membership of states has rendered the National Development Council, a body of CMs that would approve Five-Year Plans, defunct.
The new body, which would remain at its predecessor's address in Lutyen's Delhi, a few blocks away from the Parliament will have a vice chairperson and chief executive officer, to be appointed by the PM.
Columbia University professor Arvind Panagariya was under active consideration for Vice Chairman's post, sources said.
The NITI Aayog, which will serve as a policy think-tank for the central as well as state governments, will have around 7-8 full-time members and two part-time members, while four union ministers would serve as ex-officio members. The two part-time members would be from leading universities and research organisations, the number of full time members has not been specified as yet.
Experts, specialists and practitioners with relevant domain knowledge would also be part of NITI Aayog as "special invitees nominated by the PM".
READ ALSO: Most CMs favour restructuring of Planning Commission
Prime Minister Narendra Modi who announced the dismantling of Planning Commission in his maiden Independence Day speech last year, hailed the replacement in a series of tweets, saying that the inclusion of of CMs and LGs will "foster a spirit of cooperative federalism".
"Through NITI Aayog, we bid farewell to a 'one size fits all' approach towards development. The body celebrates India's diversity and plurality," Modi tweeted.
The scrapping of Planning Commission addresses the long-held view that the body which was conceived at a time when the Centre was supposed to occupy "commanding heights of economy" had outlived its relevance because of diminished role of the State and the emergence of the private sector and because of the foci of economic activities shifting to states. Beginning with former Prime Minister Rajiv Gandhi's dismissing the body as "bunch of jokers" , the Commission's utility had been increasingly called into question, with state governments protesting against their limited role in the planning process despite Congress's protests against what it has called the assault on Nehruvian policies.
READ ALSO: Anti-Nehruvianism behind plan panel renaming: Cong
In its statement, Modi government focused on the lament of states about the "top-down" approach and how the new body would be the remedy. An important evolutionary change from the past will replacing a centre-to-state one-way flow of policy by a genuine and continuing partnership with the states.
The declared intent to empower states has played well as non-NDA chief ministers have also supported the dissolution of Planning Commission.
Significantly, Modi and the official statement also stressed that the NITI Aayog will pay special attention to the poor who have not benefited from development process."A pro-people, pro-active and participatory development agenda stressing on empowerment and equality is the guiding principle behind Niti Aaygog", Modi said in one of his tweets. The official statement also had the same emphasis saying that the new institution will "pay special attention to the sections of our society that may be at risk of not benefitting adequately from economic progress".
It also said that the new institution "has to provide at the Centre and state levels with relevant strategic and technical advice" on key policy issues.
Pangaria who along with his mentor Jagdish Bhagwati rooted for Modi during the campaign for 2014 polls, but was considered to be radical for a formal role in the government in view of his aggressive pro-market views. His possible selection will be a statement of Modi government's intent to blend welfare economics with the pursuit of reforms.
The NITI Aayog will also serve as a think tank, with the government saying that it will be "a directional and policy dynamo". Government said that the Niti Aayog will maintain a "state-of-art resource centre, be a repository of research and best practices".
As part of new institution, regional council would be formed to address specific issues and contingencies impacting more than one state or a region.
Like erstwhile planning panel, the new institution has also been set up through a Cabinet Resolution, wherein it has invoked words of leaders like Mahatma Gandhi, B R Ambedkar, Swami Vivekanand and Deen Dayal Upadhyaya.
The resolution says that NITI Aayog will provide a 'national agenda' for the PM and CMs to foster cooperative federalism while recognising that "strong states make a strong nation".
It will also interact with other national and international Think Tanks, as also with educational and policy research institutions.
The announcement finally brought the curtain down on planning commission, set up by first Prime Minister Jawaharlal Nehru in March 1950, which drafted 12 five-year plans in its nearly 65-year-history.
The Commission went through several ups and downs over the years of its existence, ranging from being a simple planning body to a powerful 'control-commission'.
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