UNIVERSITY OF KASHMIR

(SRINAGAR)
School Of Law
Subject : Union -State Financial Relations
Assignment Topic: NITI Aayog and National
Development Council
Submitted To : Mr.Mir Mubashir
Submitted By :Roll no’s 10,31,32,39

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 Contents
S.No. Topic Page
No.
01 Index 01-02
02 Introduction 03
03 Key features and functions of NITI Aayog 03-04
04 The history of NITI Aayog 04
05 Objectives of NITI Aayog 05-06
06 Composition of NITI Aayog 06
07 Working of NITI Aayog 06-07
08 Relevance of NITI Aayog 08
09 Introduction of National Development 08-09
Council
10 Functions of National Development 09
Council
11 Comparison between National 09-10
Development Council and NITI Aayog
12 Conclusion 11

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Introduction
NITI Aayog, short for the national institution for transforming India, stands as a pivotal
institution in the landscape of Indian governance, steering the nation towards holistic
development and policy innovation. Formed on January 1st, 2015, as a replacement for the
traditional Planning Commission, NITI Aayog embraces a dynamic approach to
policymaking, emphasising collaborated federalism, state participation, and long term
strategic planning.
Unlike it's predecessor, NITI Aayog operates as a” Think Tank” offering both visionary and
practical insights to the Government of India. At its core, the institution champions the spirit
of cooperative federalism, involving not only the central government but also the States and
union territories in the formulation of key policies. This paradigm shift reflects a commitment
to inclusivity and a more decentralised approach to address the diverse developmental needs
of the country.
NITI Aayog’s multifaceted role extends beyond advisory functions. It spearheads initiatives
in critical sectors, conducts Policy Research, and champions in a way to projects to tackle the
nation’s social economic challenges. By fostering collaboration promoting innovation, and
emphasising capacity building, NITI Aayog plays a pivotal role in shaping India’s
development narrative, aligning policies with sustainable goals, and paving the way for a
vibrant and inclusive future

Explanation
NITI Aayog, or the national institution for transforming India is a policy think tank and a
government institution in India. It was established on January 1 st, 2015 to replace the
Planning Commission of India, which was the country’s premier planning body for over 6
decades. The formation of NITI Aayog was part of the government’s efforts to bring about a
more decentralised and cooperative approach to policymaking

Key features and functions of NITI Aayog include

1. Advisory Role: NITI Aayog serves as the premier policy “Think Tank” of the
Government of India , providing both directional and policy inputs. It acts as a
catalyst for the development agenda and support as the central and state governments
in policy formulation.
2. Collaborative Federalism: Unlike the Planning Commission, NITI Aayog fosters
cooperative federalism by involving the states in the economic policy- making
process it promotes the spirit of partnership and cooperative federalism between the
centre and the states.

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3. Special Initiatives: NITI Aayog takes up specific initiatives in various sectors, such
as health, education, water and sanitation, among others. It works on innovative
projects and strategies to address developmental challenges.
4. National Development Agenda:The institution is responsible for formulating a
tional development agenda, with a focus on long term planning and sustainable
development goals.
5. Policy Research and Analysis: NITI Aayog conducts research and analysis on
various economic and social issues to provide informal policy recommendations to
the government.
6. Capacity Building: it works on enhancing the capacity of States and Union
territories to effectively plan and implement the developmental programmes.
7. Promoting Innovation : NITI Aayog aims to foster innovation and entrepreneurship
in various sectors of the economy. It encourages the development of new technologies
and ideas to drive economic growth.
NITI Aayog operates with the governing council that includes the Prime Minister of
India, Chief ministers of all States and Union territories, and other experts from various
fields. The Vice Chairman of NITI Aayog is its chief executive, and the organisation
consists of full time and part time members including representatives from academia,
industry, and other sectors.

The History Of NITI Aayog

On May 29, 2014 the “Independent Evaluation Office” released an evolving report to Prime
Minister “Narendra Modi” recommended that a “control Commission replaced the Planning
Commission.” Accordingly the Union Cabinet abolished the Planning Commission India on
August 13 2014 to be duplicated by a weekend form of the National Advisory Council or
NAC of India. On January 1st 2015 a cabinet resolution was made to substitute the Planning
Commission with the recently constituted NITI Aayog. On Jan 1 st, 2015, the Union
Government of India announced the creation of NITI Aayog. On February 8 2015 Narendra
Modi presided over the initial meeting of the NITI Aayog.
On the necessity of establishing NITI Aayog,Finance Minister Arun Jaitley stated, the
Planning Commission, which had been in operation for 65 years, had become obsolete. It was
important in a control economy system, but it is no longer so. India is a diverse country, with
states at varying stages of economic growth, each with its own set of strengths and
disadvantages by stating what is NITI Aayog.A one-size -fits all concept of economy
planning is out of date in this setting. It will not enable India to compete in today’s economy
globally.

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Objectives Of NITI Aayog

NITI Aayog, as the premier policy think tank in India, has several objectives and at fostering
sustainable and inclusive development. Some of the key objectives include:
1. Promoting Cooperative Federalism: NITI Aayog strives to strengthen the spirit of
cooperative federalism but involving States and Union Territories in the decision
making process. It aims to create a platform for collaboration between the central
government and sub -national entities for effective policy implementation.
2. Long Term Planning: Unlike the Planning Commission,NITI Aayog focuses on long
term planning and strategic thinking. It formulates development strategies and
initiatives that align with sustainable and inclusive growth objectives.
3. Inclusive Development: The institution is committed to inclusive development,
ensuring that policies address the needs of all sections of society and contribute to
reducing disparities among regions and communities.
4. Policy Innovation: NITI Aayog fosters innovation in policy making by exploring
new ideas, technologies and approach to address contemporary challenges. It
encouraged experimentation and piloting of innovative projects.
5. Sustainabale Development Goals (SDGs): Aligning with global priorities , NITI
Aayog works towards achieving the sustainable development goals set by the United
nations. It integrates these goals into India’s development agenda, emphasising
environmental sustainability, social inclusion and economic prosperity.
6. Promoting Competitiveness- NITI Aayog aims to enhance the competitiveness of
key sectors in the Indian economy. It identifies bottlenecks suggests policy reforms
and works towards creating a conducive environment for business and investment.
7. Capacity Building: The institution focuses on building the capacity of States and
Union Territories to formulate and implement effective policies. This includes
providing training, sharing best practises and facilitating knowledge exchange.
8. Monitoring And Evaluation: NITI Aayog monitors the implementation of policies
and programmes, evaluating their impact on the ground. It assesses the effectiveness
of government initiatives and recommends course corrections when necessary.
9. Promoting Digital Transformation: Recognising the importance of technology in
governance, NITI Aayog works on promoting digital initiatives and leveraging
technology for efficient service delivery and governance.
10. Encouraging Innovation And Entrepreneurship: NITI ayAayog supports initiatives
that foster innovation and entrepreneurship, recognising the role in driving economy
growth and job creation.

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These objectives collectively reflect NITI Aayog’s commitment to steering India towards a
path of sustainable and inclusive development, embracing collaboration, innovation and long-
term vision.
NITI Aayog is founded on the seven pillars of effective governance objectives of NITI
Aayog 1. pro people, 2. Pro-activity number, 3. participation, 4. empowerment, 5. inclusion
of everyone, 6.equality, and 7. Transparency.

Composition oF NITI Aayog

 Chairperson – Prime Minister
 Vice Chairperson- To be appointed by Prime Minister
 Governing Council- Chief ministers of all States and Lt. governors of Union
Territories
 Regional Council- To address specific regional issues, comprising Chief Minister
and Lt.Governors chaired by the Prime Minister or his nominee.
 Ad-hoc Membership- 2 members in ex official capacity from leading research
institutions on a rotational.
 Ex Officio Membership – Maximum for from the union Council of Ministers to be
nominated by the prime minister.
 Chief Executive Officer- Appointed by the Prime Minister for a fixed tenure, In the
rack of secretary to Government of India.
 Special Invitees- Experts , specialists with domain knowledge nominated by the
Prime Minister.

Working of NITI Aayog

The working of NITI Aayog involves a collaborative and consultative approach, focusing on
policy formulation, strategic planning, and addressing developmental challenges. Here is an
overview of how NITI Aayog operates.
1. Consultation And Collaborations –Niti Aayog emphasises cooperative federalism,
bringing together the central government, state governments and Union Territories.
The Governing Council, chaired by the Prime Minister and comprising Chief
Ministers, serves as a platform for consultation and collaboration.
2. Formulation of Policies and Strategies-Niti Aayog formulates policies and
strategies to address key developmental challenges. It conducts research, analysis and
consultations to identify priorities and innovative solutions.

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3. Working Groups and Task forces-Niti Aayog often forms working groups and task
forces to delve into spec issues or sectors. These groups comprise experts, officials
and stakeholders who collaborate to provide recommendations and insight
4. Inclusive Growth and Sustainable Development-The institution is committed to
fostering inclusive growth and achieving sustainable development goals. Policies and
initiatives or designed to ensure that the benefits of development reach all sections of
society.
5. Monitoring and Evaluation –NITI Aayog monitors the implementation of policies
and programmes. It assesses their impact on the ground, identifies challenges, and
recommends adjustments to enhance effectiveness.
6. Regio councils-To address regional disparities and specific issues, NITI Aayog may
establish regional councils. These councils facilitate focused discussions and actions
tailored to the needs of particular regions.
7. Public – Private Partnership (ppp) NITI Aayog Promotes public private
partnerships as a means of leveraging resources and expertise from the private sector.
This collaboration is crucial for implementing projects and initiatives efficiently.
8. Capacity Building: Niti Aayog works on enhancing the capacity of States and Union
Territories. This involves providing training, sharing best practises, and facilitating
knowledge exchange to improve governance and policy implementation.
9. Innovation and Entrepreneurship-The institution sports initiatives that promote
innovation and entrepreneurship. It recognises the role in driving economy growth,
generating employment, and fostering a culture of innovation.
10. Special Initiatives- NITI Aayog takes up several initiatives in various sectors,
addressing specific challenges or opportunities. These initiatives often involve
collaboration with stakeholders, both governmental and non governmental.
11. Global Collaborations – NITI Aayog engages in international collaborations to
share experiences, learn best practises, and seek global solutions to common
challenges.
The working of NITI Aayog reflects a departure from the centralised planning approach of
the erstwhile Planning Commission. By involving states, emphasising innovation, and
promoting collaboration, NITI Aayog aims to foster a more dynamic and responsive model
of governance in India.

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Relevance of NITI Aayog

 Cooperative Federalism - Due to its composition, NITI Aayog gives a better
representation of states which facilitates direct interactions with the ministries and
helps to address issues in a relatively short time.
 Competitive Federalism – Various reports of NITI Aayog like healthy states
progressive India etc . Which give performance- based rankings of states across
various verticals to foster a spirit of competitive federalism .
 Greater Accountability – NITI Aayog has established a development monitoring and
evaluation office which collects data on the performance of various ministries on a
real- time basis.
 Think Tank of Innovative Ideas- NITI Aayog visualise it as a funnel through which
new and innovative ideas come from all possible sources industry, academia, civil
society or foreign specialists and flow into the government system for
implementation.
 By collecting fresh ideas and sharing them with the central and state governments,
it allows states to progress with these new ideas.
 Hence it helps in improving governance and implementing innovative measures
for better delivery of public services.
 Convergence for Resolution-Being a common point for similar issues faced by
different sectors, states etc.. it acts as a convergence point and polite form to discuss
these issues.

National Development Council (NDC)

National Development Council is also known as Rashtriya Vikas Parishad which is the top
body for the making of decisions and thinking on development affairs of India, led by the
Prime Minister (Shri Narendra Modi currently). This body was formed on the 6 th of August
1952.

Introduction
The National Development Council has been led by the Prime Minister. NDC’s main work is
to nourish and make proper use of the effort and the resources of the country concerning the
planning commission’s five-year plan, to advance common economic policies, and to
guarantee balance and quick development in all parts of the country. NDC consists of the
Prime Minister, Union Cabinet Minister, members of NITI Aayog, representatives of their
Union Territories, and the Chief Minister of all states
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NDC also has been proposed to be wound up but there’s no decision passed to abolish it
todate. Since the formation of NITI Aayog by Narendra Modi, the NDC has no work to do
and is idle and also not having any meetings held. It was in great force during the time of Atal
Bihari Vajpayee and Manmohan Singh and it then needed changes. Then in 2014, Narendra
Modi (PM) announced the closure of the planning commission and led the introduction of
NITI Aayog, which is neither a constitutional body nor a statutory body.

Functions of National Development Council

Functions of NDC are:
 To write down the guidelines for the preparation of the national plan,
including the assessment of the resources required for the plan
 To examine the national plan circulated by NITI Aayog.
 To evaluate the resources that are required for applying the plan and to
suggest guidelines for augmenting them
 To examine important questions of economic and social policy which in
turn affects development in the nation
 To analyze the working of the plan within intervals and to suggest
measures which are important for getting the aims and target over there in
the national plan.
 To suggest all the measures for attainment of the target and aim there in
the national plan.
Objectives
 NDC has been set up to achieve the following objectives:
 To give strength and make use of the effort and resources of the nation in upholding
the plan
 To encourage common economic policies of vital spheres
 To give guarantee about the balancing and rapid development in different parts of the
country

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 To supply social facilities like education, medical care, etc. To every person in the
country
 To bring change and get high standards in the living of people
 To increase in per capita income

1ST And Most Recent Meeting:

The 1st meeting of NDC was held by Prime Minister Jawaharlal Nehru on 8-9 th November
1952. After that NDC has held 57 meetings and the most recent the 57 th meeting took place
on 27th December 2012 at Vidhan Bhavan, Mumbai. After that, no meetings have been held to
date.
NITI Aayog and National Development Council:
After the introduction of NITI Aayog, the work of NDC has fallen to nil. So, let’s see the
comparison between them

Parameter NITI Aayog National Development

Council

Purpose It is a policy thinking and advisory, It is the country’s highest

government organisation decision -making power
on the problems regarding
development and it is a
planning area
Formation It iis formed up by the executive It is formed up by the
resolution cabinet resolution

Function To monitor and calculate the To write down the

implementation of all the programs guidelines for the making
and initiatives very keenly of the national plan which
also includes the
assessment of the
resources plan.

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Conclusion
In conclusion, NITI Aayog stands as a crucial institution in India’s governance architecture
steering the nation towards inclusive and sustainable development. Since its establishment as
a replacement for the Planning Commission, NITI Aayog has played a pivotal role in
fostering collaborative federalism, promoting innovation, and addressing key developmental
challenges.The institution’s emphasis on long term planning, capacity building and a dynamic
,consultative to approach reflects its commitment to adapting to the evolving needs of a
diverse and dynamic nation.
While NITI Aayog has made strides in various sectors, it grapples with certain limitations
such as its advisory nature, resource constraints, and the need for enhanced statutory powers,
suggestions for improvement include strengthening collaborative federalism, addressing
regional disparities, and promoting public -private partnerships.
As NITI Aayog continues evolve, it is essential for the institution to stay responsive the
emerging challenges, leverage technology for efficiency and maintain a focus on
sustainability. Engaging with states, fostering public awareness, and enhancing data
infrastructure or critical components of its journey toward effective and impactful policy
making.
In essence NITI Aayog remains a dynamic force in shaping India’s developmental trajectory,
the institution’s ability to in navigate challenges, capitalise on opportunities and adapt to the
ever- changing landscape will be instrumental in realising the vision of a prosperous,
equitable and sustainable India.
And on the other hand the National Development Council ,zis presided over by the PM of the
country and it also counts union ministers, chief ministers of every state, administrators of
union territories, and members of the planning commission. All the ministers of state are
given independent charge and they also get invited to the deliberation of the council.
K.Santhanam has named the National Development Commission as the super cabinet in his
book called “union-state relations in India “.

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