Q.What is NITI Aayog?

NITI Aayog is a key institutional term in the AP Intermediate Economics syllabus, frequently asked as a short-answer question.

NITI Aayog, standing for the National Institution for Transforming India, is the premier policy think tank of the Government of India, established with effect from 1 January 2015 to replace the Planning Commission that had functioned since 1950.

Unlike the Planning Commission, which allocated plan funds to states and ministries in a top-down manner, NITI Aayog does not control plan finances. It instead provides strategic and technical policy advice, prepares long-term vision and strategy documents, monitors development indicators across states, and promotes cooperative and competitive federalism by giving state governments — through a Governing Council of all Chief Ministers — a direct role in shaping national policy. The Prime Minister serves as its Chairperson, supported by a Vice-Chairperson, a Chief Executive Officer, and full-time and part-time members.

A common error is writing that NITI Aayog 'allocates funds to states like the Planning Commission did' — this is incorrect; fund allocation now happens through the Finance Commission and the Union Budget, while NITI Aayog's role is advisory and coordinating.