Planning Commission to NITI Aayog: Impact on India’s Development Paradigm and Federal Transfers

Abstract

The recent announcement of the replacement of the Planning Commission (PC) with
NITI Aayog has raised concerns on the future of development planning in India. This
article traces the evolution of the Planning Commission in light of its role in India’s
development followed by a discussion on the future of Plan Assistance, Development
Schemes and the National Development Council (NDC). The article also attempts to
raise issues regarding the redeployment of the key functions of the PC such as the al-
location of financial assistance from the Centre to the States in support of the five-year
plan. In view of the impending replacement of the Planning Commission, the nature of
federal transfers—both by the erstwhile Planning Commission and the Finance Com-
mission—during 1990–2010 is analysed to derive lessons for the Ministry of Finance
that will be allocating plan transfers going forward.