NITI Aayog and Planning Evolution for UPSC

Evolution of planning

India's journey towards planned development predates independence. In 1934, industrialist Sir M. Visvesvaraya and the Federation of Indian Chambers of Commerce and Industry (FICCI) mooted a ten-year plan for industrialisation. This inspired debates on systematic economic planning. Subhas Chandra Bose set up the National Planning Committee in 1938 under Jawaharlal Nehru to prepare a development framework that combined state intervention with socialist ideals. Subsequently, prominent industrialists drafted the Bombay Plan (1944) advocating large public investment in heavy industry, while M.N. Roy's People's Plan (1945) proposed nationalisation of land and resources. These early blueprints underscored the need for coordinated planning in a newly independent nation.

After independence, an Advisory Planning Board (1946) chaired by K.C. Neogi recommended establishing a permanent planning body. Acting on this recommendation, the government set up the Planning Commission on 15 March 1950 through a cabinet resolution. The Commission's mandate was to assess the country's resources, formulate FiveYear Plans (FYPs) and allocate funds to ministries and states. The First FiveYear Plan (1951-56) prioritised agrarian growth and rehabilitation of refugees. Over the next six decades, India launched twelve FYPs.

The second FYP (1956-61), influenced by economist P.C. Mahalanobis, emphasised heavy industries and import substitution. Subsequent plans responded to changing circumstances: the third plan (1961-66) targeted selfsufficiency but was interrupted by wars and drought; the plan holiday (1966-69) replaced annual plans; the fourth (1969-74) and fifth (1974-78) plans focused on growth with social justice; the sixth plan (1980-85) gave prominence to poverty alleviation programmes. Economic liberalisation after 1991 required adaptive planning; the eighth (1992-97) and ninth (1997-2002) plans aimed at modernisation and human development, while the tenth (2002-07) and eleventh (2007-12) plans concentrated on inclusive growth. The twelfth FYP (2012-17), although formulated, was truncated when the Planning Commission was wound up in 2014.

By the early 2010s the topdown approach of the Planning Commission faced criticism. Rapid economic integration, diverse state capacities and the need for flexible responses to global shocks made rigid fiveyear blueprints less effective. States demanded greater autonomy and a say in policy design. The Commission was often accused of slow decisionmaking, bureaucratic overreach and poor coordination with states. In 2014, an Independent Evaluation Office recommended replacing it with a modern institution better aligned with India's federal structure. Consequently, the government dissolved the Planning Commission and established NITI Aayog on 1 January 2015. This shift marked the end of centralised planning and the beginning of a participatory, evidencedriven planning era.

Planning Commission vs NITI

NITI Aayog was created to replace the Planning Commission rather than replicate its functions. The key differences between the two institutions lie in their purpose, structure and approach to development. While the Planning Commission functioned as a powerful central body with authority to allocate funds and prescribe fiveyear blueprints, NITI Aayog acts as a policy thinktank that provides strategic and technical advice to the centre and states.

Since 2015 NITI Aayog has released a series of documents to guide development. The 15Year Vision document sets aspirational goals up to 2031-32. A 7Year Strategy provides mediumterm guidelines, while the 3Year Action Agenda (2017-18 to 2019-20) contained specific recommendations for governance, economic growth, inclusion and sustainability. Unlike rigid FYP targets, these documents are dynamic and allow midcourse corrections. States participate through the Governing Council and thematic working groups, ensuring that regional perspectives shape national policy.

The replacement also shifted fiscal relations. The Fourteenth Finance Commission (2015) increased the states' share of central taxes from 32 % to 42 %, giving them more financial autonomy. Schemes are now routed through ministries with sectorspecific allocations and performance incentives. NITI Aayog focuses on outcome monitoring, ranking states and districts on parameters such as health, education and sustainability to encourage healthy competition.

Cooperative federalism

Cooperative federalism describes an arrangement where the centre and states work together to formulate and implement policies. India's Constitution envisages a quasifederal system with a strong centre, yet the diversity of its regions demands state participation. Under the Planning Commission, resource distribution was often perceived as bargaining federalism - states competed for plan allocations rather than collaborating on shared goals. NITI Aayog aims to change this by serving as a platform for consensusbuilding.

The Governing Council of NITI Aayog includes the Prime Minister, chief ministers of all states and union territories with legislatures, Lieutenant Governors of other UTs, union ministers as exofficio members, and policy experts. It meets periodically to deliberate on national priorities. For instance, the 10th Governing Council meeting in May 2025 focused on agriculture, infrastructure, health and skill development. NITI Aayog also forms subgroups of chief ministers on subjects like centrally sponsored schemes, agriculture and skill development. These groups recommend reforms based on ground realities.

Cooperative federalism is complemented by competitive federalism, wherein states are ranked on various indices to stimulate performance. NITI Aayog publishes the Health Index, School Education Quality Index, State Energy and Climate Index and SDG India Index. By highlighting achievers and laggards, these indices encourage states to learn from each other. The aspirational districts and blocks programmes (discussed below) also use ranking mechanisms to foster competition among districts and blocks. The combination of cooperation and competition nurtures both solidarity and innovation.

Beyond NITI Aayog, the Goods and Services Tax (GST) Council embodies cooperative federalism: it comprises the Union Finance Minister and state finance ministers who jointly decide indirect tax rates. The centre's scheme of "flexifunds" allows states to tailor centrally sponsored schemes. Together, these mechanisms signify a shift from onesizefitsall planning to flexible policymaking that respects regional diversity.

Key programs

Atal Innovation Mission (AIM)

The Atal Innovation Mission is NITI Aayog's flagship initiative to foster a culture of innovation and entrepreneurship. Launched in 2016, AIM operates through several programmes:

• Atal Tinkering Labs (ATLs): these are doityourself workspaces in schools where students from classes 6 to 12 learn science, technology, engineering and mathematics (STEM) through handson experiments. By September 2025 over 10,000 ATLs had been established across India, and the Union Budget 2025 announced a plan to set up 50,000 labs over the next five years. On "Mega Tinkering Day" (12 August 2025) around 4.73 lakh students from 9,467 ATL schools simultaneously built simple vacuum cleaners, setting a world record for the largest tinkering session.
• Atal Incubation Centres (AICs): these centres nurture startups in sectors such as agritech, healthtech and mobility. They provide infrastructure, mentorship and access to capital. The Atal Community Innovation Centres support innovation in underserved regions, ensuring that entrepreneurship reaches tier2 and tier3 towns.
• Atal New India Challenges: this programme funds innovators to develop marketready solutions to national problems in areas like renewable energy, housing, waste management and health.

Collectively, AIM is building an innovation ecosystem from school to startup. The mission emphasises inclusivity by supporting girl innovators, differentlyabled students and entrepreneurs from rural areas. Its success is reflected in the proliferation of prototypes, patents and startups emerging from ATLs and AICs.

Aspirational Districts Programme (ADP)

Launched in January 2018, the Aspirational Districts Programme seeks to transform 112 of India's most socioeconomically challenged districts into hubs of growth. The programme is anchored in three principles known as the 3Cs: convergence (coordinated implementation of central and state schemes), collaboration (engagement with civil society and private sector), and competition (ranking districts to spur improvement). Progress is measured across 49 indicators grouped under five themes: health & nutrition, education, agriculture & water resources, financial inclusion & skill development, and basic infrastructure.

NITI Aayog operates a realtime Champions of Change dashboard that tracks each district's performance. Instead of absolute scores, the dashboard uses delta ranking to capture the rate of improvement. District collectors and chief secretaries monitor these rankings and share best practices. In the early years of the programme several districts rapidly climbed the ladder; by 2019 eight districts moved from the lowest tier to the highest, demonstrating that rapid catchup is possible. Improved immunisation coverage, reductions in stunting and better school attendance are among the notable outcomes. For example, the Himalayan district of Chamba in Himachal Pradesh achieved universal tapwater coverage under the Har Ghar Jal scheme and 100 % Jan Dhan enrolment, profoundly changing the lives of its residents. International observers have praised the ADP as a model for decentralised, datadriven development.

Aspirational Blocks Programme (ABP)

Building on the success of the ADP, the government launched the Aspirational Blocks Programme on 7 January 2023. The ABP targets 500 blocks (subdistrict units) across 27 states and 4 union territories to improve the quality of life at a micro level. NITI Aayog collaborates with state governments, district administrations and partners such as the World Health Organization to address gaps in health, nutrition, education, agriculture, infrastructure and social development. Block officers are trained as "leaders of change" and given flexibility to design local solutions. Health metrics such as antenatal registration, institutional deliveries, lowbirth weight incidence and diabetes screening form part of the key performance indicators. By focusing on blocks, the programme aims to address intradistrict disparities that districtwide schemes may miss.

Sustainable Development Goals (SDG) India Index

To monitor progress toward the United Nations' Sustainable Development Goals (SDGs), NITI Aayog publishes the SDG India Index. Launched in 2018 and updated periodically, the index ranks states and union territories on composite scores derived from 113 indicators aligned to the national indicator framework. The 2023-24 edition recorded India's composite score rising from 57 in 2018 to 71, reflecting improvements in areas such as poverty reduction, climate action and decent work. The index encourages competitive federalism by highlighting frontrunner states and inspiring laggard states to emulate best practices. It also provides granular insights by publishing goalwise scores and identifying priority areas for intervention. The 2024 launch event, led by Vice Chairperson Suman Bery and CEO B.V.R. Subrahmanyam, underscored the government's commitment to evidencebased policy and the importance of data quality.

Other initiatives

NITI Aayog undertakes several other initiatives to drive transformative change:

• Women Entrepreneurship Platform (WEP): an online portal that aggregates services, mentorship and support for women entrepreneurs, promoting genderinclusive entrepreneurship.
• LiFE (Lifestyle for Environment): a movement encouraging behavioural changes and green consumption patterns to combat climate change. NITI Aayog coordinates the mission with states and citizens.
• Frontier Tech Hub: a platform exploring emerging technologies such as artificial intelligence, blockchain and drones for public service delivery.
• National Data and Analytics Platform (NDAP): provides open, interoperable and userfriendly access to government datasets to improve transparency and evidencebased policy making.
• Shoonya and EAmrit: campaigns promoting zeropollution mobility and electric vehicles, including an online portal guiding consumers on EV adoption.
• State Support Mission: launched in 2023-24 to help states prepare vision documents and sectoral roadmaps for 2047, aligning with the national goal of becoming a developed nation by the centenary of independence.

Quick Facts

• NITI Aayog replaced the Planning Commission on 1 January 2015; it acts as a policy thinktank rather than a fund allocating body.
• The Governing Council comprises the Prime Minister, all Chief Ministers, Lt Governors of union territories, union ministers and policy experts.
• The 14th Finance Commission increased states' share of central taxes to 42 %, enhancing fiscal autonomy.
• Over 10,000 Atal Tinkering Labs operate in schools; Mega Tinkering Day 2025 saw participation of 4.73 lakh students from 9,467 labs, and the government plans to expand the network to 50,000 labs.
• The Aspirational Districts Programme covers 112 districts and tracks progress across 49 indicators using a delta ranking system; many districts have shown rapid improvement in health, nutrition and infrastructure.
• The Aspirational Blocks Programme launched in 2023 targets 500 blocks across 27 states and 4 UTs to address localised development gaps.
• India's SDG composite score improved from 57 (2018) to 71 (2023-24), with notable gains in climate action, poverty reduction and decent work.
• NITI Aayog's initiatives include the Women Entrepreneurship Platform, LiFE mission, Frontier Tech Hub, NDAP and campaigns like Shoonya and EAmrit.

Key points for Prelims and Mains

For UPSC Prelims

• Know the year of establishment of the Planning Commission (1950) and NITI Aayog (2015).
• Remember that NITI Aayog is advisory; it does not allocate funds or prepare FiveYear Plans.
• Identify key programmes: Atal Innovation Mission, Aspirational Districts Programme, Aspirational Blocks Programme and SDG India Index.
• Recall that ADP covers 112 districts and uses 49 indicators across five sectors; ABP targets 500 blocks.
• Understand the concept of cooperative and competitive federalism and the role of the Governing Council.
• Know that the SDG India Index measures progress across 16 goals and India's composite score rose to 71 in 2023-24.

For UPSC Mains

• Analyse why the Planning Commission was replaced by NITI Aayog - consider criticisms of centralised planning, changing economic realities and demands for federal cooperation.
• Discuss how NITI Aayog promotes cooperative and competitive federalism through its Governing Council, subgroups and performance indices.
• Evaluate the impact of the Aspirational Districts Programme and Aspirational Blocks Programme on regional disparities. Cite examples such as Chamba's transformation.
• Examine the role of the Atal Innovation Mission in nurturing innovation ecosystems, focusing on Atal Tinkering Labs and incubation centres.
• Assess the relevance of longterm vision documents and flexible strategies in a rapidly changing global environment.
• Critically appraise NITI Aayog's effectiveness as a policy thinktank. Are its recommendations being implemented? How does it coordinate with ministries and states?

UPSC Previous Year Questions (Selected)

1. 2016 Prelims: Which of the following statements correctly differentiates NITI Aayog from the Planning Commission?
   1. NITI Aayog allocates funds to states while the Planning Commission did not.
   2. NITI Aayog focuses on cooperative federalism, whereas the Planning Commission followed a topdown approach.
   Answer: Statement 2 is correct; NITI Aayog promotes cooperative federalism. Statement 1 is incorrect because NITI Aayog does not allocate funds.
2. 2018 Mains (GS II): "Cooperative federalism has been reenergised with the establishment of NITI Aayog." Examine this statement in the light of intergovernmental relations in India.
   Answer: Candidates should discuss the shift from centralised planning to a participatory framework, the role of the Governing Council, subgroups of chief ministers, performance indices and the interplay between cooperation and competition.
3. 2021 Prelims: With reference to the Aspirational Districts Programme, consider the following statements:
   1. The programme covers 112 districts identified by NITI Aayog.
   2. Progress of districts is measured through delta ranking across key indicators.
   3. It focuses only on health and education sectors.
   Select the correct answer using the code below.
   Answer: Statements 1 and 2 are correct; statement 3 is incorrect because the programme covers five broad themes including agriculture, infrastructure and financial inclusion.
4. 2023 Mains (GS III): "Innovation is the lifeblood of economic growth." Discuss the role of Atal Innovation Mission in fostering a culture of innovation and entrepreneurship in India.
   Answer: Candidates should outline AIM's components (ATLs, AICs, community innovation centres, New India Challenges), its reach in schools and startups, and its contribution to building a skilled workforce.

Practice MCQs

1. Which of the following functions does NITI Aayog perform?
   A. Allocating plan funds to states
   B. Providing strategic and technical policy advice
   C. Issuing fiveyear plan targets
   D. Levying taxes on states
2. Atal Tinkering Labs are established under which mission?
   A. Digital India Mission
   B. Atal Innovation Mission
   C. National Skill Development Mission
   D. Make in India
3. The Aspirational Blocks Programme launched in 2023 covers:
   A. 50 blocks in 5 states
   B. 112 blocks in 112 districts
   C. 500 blocks across 27 states and 4 UTs
   D. 1000 blocks across all states
4. Which statement about cooperative federalism is incorrect?
   A. It involves collaboration between the centre and states.
   B. It includes ranking states to encourage performance.
   C. It limits the role of states in policymaking.
   D. It emphasises consensus building.
5. The SDG India Index is published by:
   A. Ministry of Finance
   B. Reserve Bank of India
   C. NITI Aayog
   D. National Statistical Commission

Answer key: 1B, 2B, 3C, 4C, 5C.

Frequently Asked Questions

Why was the Planning Commission replaced by NITI Aayog?

The Planning Commission's topdown planning and fund allocation model was seen as outdated in a liberalising economy. NITI Aayog was created in 2015 to provide strategic policy advice, encourage state participation and promote cooperative and competitive federalism.

Does NITI Aayog allocate funds to states?

No. NITI Aayog is an advisory body. Fund transfers to states are determined by the Finance Commission and routed through ministries. NITI Aayog monitors outcomes and advises on policy reforms.

What are the main themes of the Aspirational Districts Programme?

The programme tracks 49 indicators grouped under five themes: health & nutrition; education; agriculture & water resources; financial inclusion & skill development; and basic infrastructure. Districts are ranked based on improvements (delta ranking).

How is NITI Aayog structured?

NITI Aayog is chaired by the Prime Minister. It has a Vice Chairperson, currently Suman Bery (as of 2025), fulltime members, parttime members, exofficio members (Union Ministers) and a Chief Executive Officer (B.V.R. Subrahmanyam). The Governing Council includes all chief ministers and Lieutenant Governors.

What is the purpose of the SDG India Index?

The SDG India Index ranks states and union territories based on progress towards the UN Sustainable Development Goals. It promotes competitive federalism by encouraging states to learn from leaders and prioritise lagging goals. India's composite score improved to 71 in the 2023-24 edition.

Are Atal Tinkering Labs only for urban schools?

No. ATLs are set up in government and private schools across urban and rural areas, including aspirational districts and frontier regions. The mission emphasises inclusivity by supporting underrepresented groups.

What is the difference between the Aspirational Districts Programme and the Aspirational Blocks Programme?

The Aspirational Districts Programme targets 112 districts and uses 49 indicators across five sectors. The Aspirational Blocks Programme, launched in 2023, focuses on 500 blocks (subdistricts) in 27 states and 4 UTs to tackle local disparities. Both programmes use datadriven monitoring and competition to accelerate development.

How does NITI Aayog promote innovation?

Through the Atal Innovation Mission, NITI Aayog establishes tinkering labs in schools, incubators and community innovation centres. It organises challenges and provides funding and mentoring support for startups, fostering a culture of innovation across the country.