The Functions of NITI Aayog

(l) To focus on technology upgradation and capacity building for implementation of programmes and initiatives.

(m) To undertake other activities as may be necessary to further the execution of the national development agenda.

And paragraph 14 supplies the phrase to quote: through its commitment to cooperative federalism, promotion of citizen engagement, egalitarian access to opportunity, participative and adaptive governance and increasing use of technology, NITI Aayog will provide critical directional and strategic input into the development process, and this, "along with being the incubator of ideas for development, will be the core mission of NITI Aayog".

The thirteen grouped into six, which is how to write them

What it does in practice

The Resolution states objectives. Four kinds of work have grown out of them, and naming them turns a recitation into an answer.

1. Indices that rank States and districts. Composite indices on health, education, water, innovation, exports, energy and sustainable development goals. The device is influence without money: a State that ranks badly is under pressure from its own public, and the index also tells it exactly which indicator is dragging it down. NITI Aayog's Multidimensional Poverty Index, discussed in [Poverty and the Poverty Line], is the best known: it recorded a fall from 55.3 per cent in 2005-06 to 14.96 per cent in 2019-21, and an estimated 11.28 per cent in 2022-23.

2. The Aspirational Districts Programme. Identifying the districts furthest behind on a set of indicators and concentrating attention, data and competition on them, with monthly ranking on a live dashboard. It is objective (e) and objective (k) working together, and its design is the reason the same approach reappears in [Government Measures to Raise Agricultural Productivity] as PM Dhan Dhaanya Krishi Yojana, which selects 100 districts on low productivity, low cropping intensity and low credit.

3. Evaluation. The Development Monitoring and Evaluation Office assesses whether schemes achieve what they were designed for. This is objective (k), and it is a function the Planning Commission was poorly placed to perform, because it had designed and financed the schemes itself.

4. Strategy documents and sectoral missions. Vision and strategy papers in place of Five Year Plans, and support to missions on subjects such as electric mobility, water, nutrition and artificial intelligence, together with the Atal Innovation Mission for innovation and entrepreneurship, which is objective (h).

What it does NOT do, which is half the answer

It makes no financial allocations. This is the single most examinable difference from the Planning Commission, and it should be stated in any answer on functions.

It does not approve State plans. There are no State plans to approve.

Its recommendations are not binding. It has no statutory power to direct a State or a ministry.

It does not implement. Implementation is with the ministries and the States; NITI Aayog advises, evaluates and convenes.

A worked example: how a function becomes an outcome

The problem. Anaemia among adolescent girls is high in a group of districts.

What NITI Aayog can do, function by function.

• Under (k), evaluate the existing supplementation programme and find that supply reaches the block but not the school.
• Under (j) and (g), assemble what has worked elsewhere, including in other countries, through its resource centre and partnerships.
• Under (a) and (b), place the finding before the Governing Council so that the States concerned own the problem rather than receive an instruction.
• Under (e), ensure the districts furthest behind are the ones addressed first, which is the aspirational districts method.
• Under (l), put a dashboard in place so that delivery to the school, not despatch from the block, is what is measured.
• Under (i), convene the health, education and food departments, since the failure sat between them and belonged to none of them.

What it cannot do. Pay for the supplements, direct a State to act, or run the programme. Everything above works only if the ministries and the States accept it.

What the example demonstrates. The functions are real and they are all of one kind: finding out what is true, making it visible, and getting the people with the money and the power to act on it. That is what a think tank is, and it is the honest answer to a question asking whether NITI Aayog is effective.

Criticism of the functions

Advice without money can be ignored, and has been.

Ranking is not building. An index tells a State it is behind; the State still needs the capacity and the funds to catch up, and the poorest States have least of both.

Evaluation by a body attached to the Union executive is not fully independent, and a State may reasonably regard an adverse evaluation as a political document.

A vacuum in coordination. With plan allocation gone and the National Development Council in disuse, no body now reconciles Union and State investment priorities, and NITI Aayog's platform function under objective (i) has not filled it.

Objective (c) is the least fulfilled. Credible plans formulated at the village level and aggregated upwards is the most ambitious objective in paragraph 12, and the structure contains no representation of panchayats or municipalities at all.

Against all of that, the honest defence is that the functions it has performed, independent evaluation, comparable data, visible ranking and a standing forum of Chief Ministers, did not exist before and are worth having.

Quick revision

1. Paragraph 12 lists thirteen objectives, (a) to (m). Paragraph 14 supplies the phrase incubator of ideas for development as the core mission.
2. The six groups: vision and strategy; cooperative federalism; bottom up planning from the village; think tank and knowledge; monitoring and evaluation; equity and national security.
3. The most quoted phrases: shared vision with the active involvement of States; strong States make a strong nation; credible plans at the village level aggregated upwards; a platform for inter sectoral and inter departmental resolution; a state of the art Resource Centre.
4. In practice: indices ranking States and districts, including the Multidimensional Poverty Index, which fell from 55.3 per cent in 2005-06 to 14.96 per cent in 2019-21 and an estimated 11.28 per cent in 2022-23; the Aspirational Districts Programme; evaluation through the Development Monitoring and Evaluation Office; and strategy documents and missions including the Atal Innovation Mission.
5. What it does not do: allocate funds, approve State plans, issue binding directions, or implement anything.
6. Criticism: advice without money can be ignored; ranking is not building; evaluation by a Union body is not fully independent; a coordination vacuum remains; and objective (c), village level planning, is the least fulfilled, with no local government representation in the structure.

Test yourself

1. State the functions of NITI Aayog. Paragraph 12 of the Resolution of 1 January 2015 lists thirteen objectives: to evolve a shared vision of national development priorities with the active involvement of States; to foster cooperative federalism through structured support initiatives with the States on a continuous basis; to develop mechanisms to formulate credible plans at the village level and aggregate them upwards; to ensure, on referred matters, that national security interests are incorporated in economic policy; to pay special attention to sections at risk of not benefiting from economic progress; to design strategic and long term policy frameworks and monitor their progress and efficacy; to advise on and encourage partnerships with think tanks and research institutions; to create a knowledge, innovation and entrepreneurial support system; to offer a platform for resolving inter sectoral and inter departmental issues; to maintain a resource centre and repository of research on good governance and best practice; to monitor and evaluate implementation, including identifying the resources needed; to focus on technology upgradation and capacity building; and to undertake other necessary activities. Paragraph 14 describes its core mission as providing critical directional and strategic input into the development process and being the incubator of ideas for development.

2. Group the objectives and explain each group. Vision and strategy: evolving a shared national vision and designing long term policy and programme frameworks. Cooperative federalism: continuous structured engagement with the States, and a platform for resolving issues between sectors and departments. Bottom up planning: mechanisms for credible plans at village level aggregated progressively upwards. Think tank and knowledge: partnerships with research institutions, an innovation and entrepreneurship support system, a resource centre and repository of best practice, and technology upgradation and capacity building. Monitoring and evaluation: assessing whether programmes achieve their objectives and applying the lessons in mid course corrections. Equity and security: attention to sections at risk of exclusion, and incorporation of national security considerations into economic policy on referred matters.

3. How does NITI Aayog influence policy without any financial power? By four means. It publishes composite indices ranking States and districts on health, education, water, innovation, exports and other subjects, which creates public and political pressure and identifies precisely which indicator is responsible. It runs the Aspirational Districts Programme, concentrating attention and comparable monthly data on the districts furthest behind. It evaluates existing schemes through its evaluation office and reports what works, which is information that ministries and States can act on. And it convenes: the Governing Council brings every Chief Minister to one table, and the platform function allows departments whose disagreement has blocked a programme to be brought together. All four operate by making things visible and comparable rather than by directing or paying.

4. What are the limits of NITI Aayog's functions? It makes no financial allocations, so it cannot fund what it recommends. It does not approve State plans, since there are none. Its recommendations bind nobody, because it has no statutory power over a State or a ministry. And it does not implement, implementation resting with the ministries and the States. The consequence is that every function it performs succeeds only to the extent that those with money and executive power choose to act on it, which is the standing criticism of the institution and the reason its effectiveness varies with the political relationship between the Union and the State concerned.

5. Which objective has been least fulfilled, and why? Objective (c), the development of mechanisms to formulate credible plans at the village level and aggregate them progressively at higher levels of government. It is the most ambitious of the thirteen, since it reverses the direction in which planning had travelled for sixty five years. It has been least fulfilled because the structure created by paragraph 13 contains no representation of panchayats or municipalities at all: the Governing Council consists of Chief Ministers and Lieutenant Governors, and there is no limb through which the third tier of government participates. Village level planning also requires capacity and data at the panchayat level which in most States does not yet exist, and NITI Aayog has neither funds nor authority to create it.

6. "NITI Aayog is only a think tank." Is that a criticism? It is a description, and whether it is a criticism depends on what one thinks was needed. The complaint behind the phrase is that a body with no money and no binding power cannot make anything happen, and that ranking a poor State does not build its schools. There is force in that, particularly for States that lack the capacity to act on advice. But three things it does had no institutional home before: comparable measurement across States and districts, which is what the indices and the Multidimensional Poverty Index provide; independent evaluation of whether schemes work, which the Planning Commission could not credibly perform because it had designed and financed them; and a standing forum in which every Chief Minister sits with the Prime Minister on a matter where no allocation is at stake. A think tank that does those three things is not a small institution, and the Resolution itself describes the core mission in exactly those terms, as being the incubator of ideas for development.