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Exercises · Q3

Q.Why was the Planning Commission replaced by NITI Aayog? State the main differences between the two.

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Why the change was made. The Planning Commission functioned for over sixty years but faced mounting criticism:

  • It was seen as too centralised, deciding allocations for states from the top down.
  • It followed a "one-size-fits-all" approach ill-suited to a large and diverse country.
  • It reduced states to claimants of central funds rather than genuine partners in development.

To build an institution better suited to a diverse, growing economy and to a stronger role for states, the government replaced it with NITI Aayog on 1 January 2015.

Main differences.

FeaturePlanning CommissionNITI Aayog
Set up19501 January 2015
NaturePlan-making, fund-allocating bodyThink-tank and policy adviser
Allocates funds to states?YesNo
Centre–state relationsTop-down directionCooperative federalism (partnership)
Main toolFive Year PlansPolicy advice, strategy, monitoring

For a state like Manipur, the shift means a stronger voice in shaping national priorities and central support delivered through targeted programmes rather than a single centrally-fixed allocation.

✓Final answer

The Planning Commission was replaced because of its centralised, top-down, one-size-fits-all working; NITI Aayog (1 January 2015) differs in being an advisory think-tank that does not allocate funds and works through cooperative federalism, treating states as development partners.

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