Answer: 

Introduction:

Inspired by the Soviet Model, India had established a Planning Commission in 1950 to design the five-year plans for India. In 2015, it was replaced by a new organisation named National Institution for Transforming India (NITI) Aayog, in line with the changing needs of new India.

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Body:

The principles followed by these two organisations differ from each other in the following dimensions:

• Bottom-up approach: NITI Aayog has followed a bottom-up approach in policy formulation unlike Planning Commission which followed a top-down approach.
• Fundamental basis: Planning Commission worked on the ideals of socialism which became largely irrelevant post LPG reforms. NITI Aayog aims for competitive federalism between states in a free market economy.
• Competitive federalism: NITI Aayog has prepared online dashboards to rank the states on various indicators of development such as Sustainable Development Goals (SDG) India Index, Health Index, School Education Quality Index, Digital Transformation Index etc. This helps in replicating the best practices in different States in various sectors.
• Decentralization: NITI Aayog works on participatory decision making along with states while the Planning commission was largely a centralized decision-making body.
  • The involvement of chief ministers in the planning process of India improves the spirit of cooperative federalism and participatory planning unlike Planning Commission which was usually headed by union ministers or technocrats.
• No Financial powers: The Planning Commission used to allocate funds to states while NITI Aayog is only an advisory body.
• Inclusive growth: The NITI Aayog focuses on inclusive growth and aims to address regional imbalances and disparities in development. The Planning Commission also had similar goals, but its approach was often criticized for being top-down and not sufficiently inclusive.
• Coordination between Centre and States: NITI Aayog has helped in bringing convergence among central and state government and across different ministries to push the agenda of development forward through initiatives like 115 Aspirational Districts.
• Distanced from government: NITI Aayog is a think tank and while generating new ideas, it maintains a respectable intellectual distance from the government of the day. The Planning Commission on the other hand was deeply related to the government.

Conclusion:

Although socio-economic transformation lies at the heart of both NITI Aayog and Planning Commission, NITI’s approach is more modernised, forward-looking, less bureaucratic and less status-quo oriented than the erstwhile Planning Commission. NITI Aayog is playing a pivotal role as a think-tank for economic growth, human development and good governance in India.

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