credit, providing infrastructure such as land etc. Thus, policies pertaining to various sectors cannot be made the exclusive responsibility of a single planning agency, but has to be developed through interaction with many stakeholders (inter-ministerial interaction, rather than a behemoth planning commission) In this regard, it is pertinent to study the new NITI Aayog and its similarities and differences with the Planning Commission: NITI Aayog will not be formulating central plans, but it will be responsible for monitoring and evaluating the monitoring of programmes. Thus, while the monitoring and advisory functions of the erstwhile Planning Commission are retained, the executive function of framing plans and allocating funds for plan-assisted schemes has been taken away A role of the Planning Commission was to lobby for the plan expenditure not being slashed; now, with the responsibility for this not residing with NitiAayog, no one will do this lobbying and the Finance Ministry will be free to cut plan expenditure Earlier, devolution of plan expenditure to the states was done via Planning Commission and non-plan by Finance Commission. What now? Is the distinction between plan and non-plan expenditure to be abolished? Is GOI shirking its responsibility of planning and introducing new schemes? Post-budget, it is clear that the government has, at least for now, chosen to maintain the plan and non-plan distinction. It is still not clear about who would be charged with ensuring that the distinction is implemented, and to keep track of the devolution of funds. For now, it looks like NITI Aayog is not all that dissimilar from the Planning Commission it replaced Relation between planning and markets for growth The move towards indicative planning post 1991 wasn’t a dismantling of planning- it was, in fact, a recognition that good planning involves putting in place policies that will allow the economy to perform to its full potential and a private sector dominated economy needs to give much greater freedom to private enterprise within the framework of a competitive economy. This is not to say that reliance on markets will take care of all objectives. It will not take care of distributional objectives since not everyone will benefit sufficiently from exclusive reliance on markets. It also does not take care of market failures, which warrant corrective action. These problems need to be addressed through carefully crafted policies and programmes involving suitably designed government intervention at multiple
credit, providing infrastructure such as land etc. Thus, policies pertaining to various sectors cannot be made the exclusive responsibility of a single planning agency, but has to be developed through interaction with many stakeholders (inter-ministerial interaction, rather than a behemoth planning commission) In this regard, it is pertinent to study the new NITI Aayog and its similarities and differences with the Planning Commission: NITI Aayog will not be formulating central plans, but it will be responsible for monitoring and evaluating the monitoring of programmes. Thus, while the monitoring and advisory functions of the erstwhile Planning Commission are retained, the executive function of framing plans and allocating funds for plan-assisted schemes has been taken away A role of the Planning Commission was to lobby for the plan expenditure not being slashed; now, with the responsibility for this not residing with NitiAayog, no one will do this lobbying and the Finance Ministry will be free to cut plan expenditure Earlier, devolution of plan expenditure to the states was done via Planning Commission and non-plan by Finance Commission. What now? Is the distinction between plan and non-plan expenditure to be abolished? Is GOI shirking its responsibility of planning and introducing new schemes? Post-budget, it is clear that the government has, at least for now, chosen to maintain the plan and non-plan distinction. It is still not clear about who would be charged with ensuring that the distinction is implemented, and to keep track of the devolution of funds. For now, it looks like NITI Aayog is not all that dissimilar from the Planning Commission it replaced Relation between planning and markets for growth The move towards indicative planning post 1991 wasn’t a dismantling of planning- it was, in fact, a recognition that good planning involves putting in place policies that will allow the economy to perform to its full potential and a private sector dominated economy needs to give much greater freedom to private enterprise within the framework of a competitive economy. This is not to say that reliance on markets will take care of all objectives. It will not take care of distributional objectives since not everyone will benefit sufficiently from exclusive reliance on markets. It also does not take care of market failures, which warrant corrective action. These problems need to be addressed through carefully crafted policies and programmes involving suitably designed government intervention at multiple