On January 1, 2025, National Institute for Transforming India (NITI) Aayog celebrated its 10^th year of foundation.

NITI Aayog

• NITI Aayog is an advisory body (think-tank) to the government, established through a Union cabinet resolution, replacing the erstwhile Planning Commission.
• It is neither a Constitutional nor a statutory body.
• Mandate: It has a twin mandate:
• To oversee the adoption and monitoring of the SDGs in the country; and 
• Promote competitive and cooperative federalism among States and UTs.
• Composition:
• Chairperson: Prime Minister (PM) of India.     
• Governing Council:
• PM of India;
• Chief Ministers (CMs) of all the States and UTs with legislature;
• Lt. Governors of other UTs;
• Ex-Officio Members (include maximum 4 members of Union Council of Ministers nominated by the PM);
• Vice Chairperson, NITI Aayog (appointed by the PM);
• Full-Time Members, NITI Aayog; and
• Special Invitees (include experts, specialists and practitioners with relevant domain knowledge nominated by the PM).
• Regional Councils: Formed for a specified tenure, to address specific issues and contingencies impacting more than one state or a region.

• It will be convened by the PM and will comprise of the CMs of States and Lt. Governors of UTs in the region.
• Chief Executive Officer (CEO): Appointed by the PM for a fixed tenure, in the rank of Secretary to the Government of India. 

Key objectives:

• Formulation of credible plans at village levels, and special attention to weaker sections at risk of not benefiting adequately from economic progress.
• Incorporation of national security interests while formulating economic strategy and policy.
• Creating a knowledge, innovation and entrepreneurial support system.
• Serve as a platform for resolution of inter-sectoral and inter­ departmental issues.
• Other Features:
• It is supported by the attached and autonomous bodies of Development Monitoring and Evaluation Organisation (DMEO), Atal Innovation Mission (AIM) and National Institute of Labour Economics Research and Development (NILERD).

Its activities can be broadly divided into policy and programme framework; cooperative federalism; monitoring and evaluation; and think-tank, knowledge and innovation hub. 

Achievements of NITI Aayog 

• Enhanced cooperative federalism: Aayog served as a linking bridge between central and state governments, fostering collaboration to align regional priorities with national goals.
• E.g., NITI Aayog''s ''Team India Hub'' involves all states to work towards a national development agenda.
• Another example is the Aspirational Districts Programme (ADP) that aims to quickly and effectively transform 112 most under-developed districts across the country. NITI Aayog works closely with the respective line Ministries and various development partners to fast-track progress at the district level.
• Strengthened competitive federalism: Encouraged healthy competition among the states through data-driven and transparent indexes and ranking systems.
• E.g., Fiscal Health Index, Aspirational District Programme, Composite Water Management Index, State Energy and Climate Index etc. 
• Governance and policy advice: As a think tank, Aayog advised on long-term strategic policies and shifted its focus from financial allocation (priority of erstwhile Planning Commission) to policy advisory, thus promoted decentralized governance approach.
• E.g., It assisted several states in setting up of State Institutions of Transformation (SITs) for better governance and policy implementation.  

• Inculcated innovation, entrepreneurship and digital transformation: Through initiatives like Atal Innovation Mission (Atal Tinkering Labs, Atal Incubation Centre etc.), Knowledge and Innovation Hub, National Data and Analytics Platform (NDAP), roadmap for digital payments etc.
• Regional and inter-sectoral social interventions: E.g., NITI Forum for North East, SATH-E initiative, Poshan Abhiyan, State Health Index, School Education Quality Index etc. 
• Sustainable Developments Goals (SDGs) monitoring: Tasked with monitoring and adoption of SDGs in India, Aayog played a crucial role in synchronizing nation''s developmental programs in line with the targets. E.g., SDG India Index.

Shortcomings of NITI Aayog in Strengthening Cooperative Federalism and Fostering Innovation

• Perceived Centralization: Its focus on rankings and indices led to criticisms of promoting central priorities over state-specific needs.
  For example: Aspirational Districts Programme was criticized for lacking state-specific customization in addressing disparities.
• Limited State Engagement: Despite its cooperative mandate, it failed to institutionalize robust mechanisms for Centre-state negotiation.
  For example: The absence of a budgetary role undermined its authority in facilitating fiscal coordination with states.
• Dependence on Private Sector: Excessive reliance on management consultants marginalized academics and civil society, limiting diverse perspectives in policymaking.
  For example: Use of consultants like BCG sidelined technical experts, raising concerns about independent analysis.
• Weak Strategic Visioning: Short-term action plans like India@75 lacked comprehensive policy frameworks, reducing their long-term impact.
  For example: The Three-Year Action Agenda (2017-2020) had limited influence on major policy decisions.
• Failure to Address Regional Disparities: NITI Aayog has not effectively tackled growing regional inequalities, weakening its cooperative federalism mandate.

Reforms to Ensure NITI Aayog’s Continued Relevance and Effectiveness  

• Grant Financial Powers for Strategic Planning: Empower NITI Aayog with financial resources to implement coherent medium- and long-term strategies to address key challenges like regional disparities.
  For example: Restoring budgetary powers, similar to the Planning Commission, can enable resource allocation to bridge gaps in underdeveloped states like Bihar and Odisha.
• Foster an Inclusive and Transparent Policymaking Framework: Institutionalize democratic dialogue with diverse stakeholders, including states, academics, and civil society, to enhance policy credibility and inclusiveness.
  For example: A structured mechanism for public consultations during India@100 strategic planning can ensure policies address grassroots concerns and foster acceptance.
• Promote Evidence-Based Policymaking: Develop a credible knowledge system by collaborating with universities, research institutions, and think tanks to provide data-driven and independent policy advice.
  For example: Partnerships with institutes like IISc Bengaluru for climate policy formulation could improve the rigor and applicability of policies.
• Strengthen Centre-State Bargaining Mechanisms: Create institutionalized mechanisms for inter-ministerial and Centre-State negotiations to address development issues and minimize regional imbalances.
  For example: A formalized Centre-State council under NITI Aayog can address richer states’ concerns about fiscal devolution, as raised in 13th Finance Commission debates.
• Enhance Autonomy and Reduce Centralization: Establish NITI Aayog as an independent body, limiting its susceptibility to Union government priorities, to make it a credible think tank for Team India.
  For example: Empowering state-level think tanks aligned with NITI Aayog’s agenda could enhance competitive federalism and allow decentralized policymaking.

NITI Aayog has played a crucial role in shaping India''s policy landscape through cooperative federalism, strategic planning, and fostering innovation. However, its effectiveness is constrained by several limitations. To enhance its impact, NITI Aayog must evolve into a more empowered institution with greater financial autonomy, resource allocation and stronger policy enforcement mechanisms, ensuring better coordination between the states and with states and the center.