NITI AAYOG: LESSONS FROM DECADES PAST

India is a rare Asian nation without a ministry for planning today. When Latin American and sub-Saharan nations did the same in the 1980s and 90s, their economies stagnated

- SANTOSH MEHROTRA

TODAY marks the 10th birthday of a national organisation—the Niti Aayog—that succeeded the Planning Commission. What was it meant to do? And what has it achieved in the last decade?

To understand what Niti Aayog could have done, we need to place on record what the Planning Commission did. Shorn of all verbiage, the Planning Commission essentially had four functions. First, it articulated a vision for the next five years for the country's economic and social development based on a political vision given to them by the Union government (which was to consult line ministries and state governments) through the National Development Council. Second, it was to formulate a five-year plan in accordance with the vision and convert it into an actionable document. Third, it was to articulate programmes to implement the vision. Finally, it was required at the beginning of each financial year to negotiate, with the finance minister and the commission's chairman (the PM) annual budget allocation for plan and non-plan funds. This then left the finance minister free to formulate the national budget for that financial year.

The last 10 years have shown that the Niti Aayog performs practically none of these four functions. India is the only Asian country which, after 2014, has no ministry planning, nor a five-year plan (other than South Korea since 1994, soon after which it became a high-income country). In the 1980s and 1990s, Latin American and sub-Saharan countries abandoned central planning under the influence of neo-liberal, IMF- and World Bank-driven structural adjustment policies. They saw their per capita incomes stagnating and poverty increasing. No Asian economy abandoned central planning and continued to grow relatively evenly.