Difference between Niti aayog and planning commission

Difference between Niti aayog and the Planning commission

Niti aayog

Niti Aayog is the apex public policy think tank of the Government of India. Also, the nodal agency handles the task of accelerating economic development and fostering cooperative federalism.

This development through fostering cooperative federalism is done with the involvement of the State governments of India in the policy-making process.

Evolution and Mandate:

  • Established in 2015, replacing the Planning Commission.
  • A think tank offering policy recommendations for national development and economic progress.
  • Focuses on a holistic approach, encompassing economic, social, and environmental aspects.


  • Policy formulation: Provides strategic direction and blueprints for national development plans.
  • Centre-State coordination: Foster’s cooperative federalism, bridges gaps between government levels.
  • Monitoring and evaluation: Tracks progress of implemented policies and identifies areas for improvement.
  • Knowledge hub: Conducts research, analyzes, and disseminates information on critical issues.


  • Chaired by the Prime Minister, with a Vice-Chairperson and CEO leading the execution.
  • Supported by various committees and experts specializing in different sectors.

Key Reports and Initiatives:

  • Strategy for New India @75: Roadmap for achieving specific development goals by 2022.
  • National Education Policy 2020: Transformational vision for revamping India’s education system.
  • Atmanirbhar Bharat Abhiyan: Fostering self-reliance in key sectors like manufacturing and technology.
  • Sustainable Development Goals (SDGs): Aligning national priorities with global development agenda.

Planning Commission (India)

The Planning Commission, though abolished in 2015, remains a significant chapter in India’s economic and political history.

Origins and Mandate:

  • Established in 1950 under Prime Minister Jawaharlal Nehru.
  • Derived its authority from the Directive Principles of State Policy in the Indian Constitution.
  • A centralized body responsible for guiding India’s economic development through Five-Year Plans.
  • Focused on rapid industrialization, poverty alleviation, and social progress.


  • Formulation of Five-Year Plans: Determined priorities, allocated resources, and set targets for different sectors.
  • Mobilization of resources: Collected data, assessed potential, and facilitated domestic savings and foreign aid.
  • Monitoring and evaluation: Tracked progress of plans, identified bottlenecks, and recommended course corrections.
  • Coordination and collaboration: Worked with central ministries, state governments, and other stakeholders.


  • Laid the foundation for India’s industrial and agricultural growth.
  • Promoted infrastructure development, including dams, power plants, and transportation networks.
  • Pioneered social welfare programs like the Green Revolution and the Minimum Needs Programme.
  • Played a crucial role in reducing poverty and raising living standards.


  • Centralized planning: Accused of being bureaucratic, inflexible, and hindering private sector growth.
  • Corruption and inefficiency: Plagued by allegations of nepotism, favoritism, and misallocation of resources.
  • Focus on top-down approach: Neglected grassroots participation and local needs.
  • Limited success in achieving equitable distribution of benefits.


  • Though replaced by NITI Aayog, the Planning Commission’s contributions remain undeniable.
  • Its experience and lessons learned continue to guide India’s economic policymaking.

Historical Context:

  • Newly independent India: In 1950, India stood at a crossroads. Decades of colonial rule had left behind a largely agrarian economy, widespread poverty, and inadequate infrastructure. The newly formed government faced the immense challenge of modernizing and developing the nation.
  • Soviet influence: The prevailing zeitgeist favored centralized planning, inspired by the Soviet model’s rapid industrialization. Jawaharlal Nehru, India’s first Prime Minister, was deeply impressed by this approach and envisioned the Planning Commission as a tool for directed development.
  • Need for a roadmap: Without a clear plan, navigating the complexities of India’s diverse economy and social fabric seemed daunting. The Five-Year Plans, formulated by the Planning Commission, provided a framework for allocating resources, prioritizing sectors, and setting measurable goals.


  • Rapid industrialization: Building a strong industrial base was seen as essential for generating wealth, creating jobs, and reducing dependence on imports. The Planning Commission prioritized heavy industries like steel, power, and machine tools.
  • Poverty alleviation: Uplifting millions living in abject poverty was a paramount objective. The Planning Commission focused on rural development, agriculture, and social welfare programs like the Minimum Needs Programme.
  • Self-sufficiency: Reducing dependence on foreign aid and achieving self-reliance in critical sectors was a long-term goal. The Planning Commission promoted domestic savings, import substitution, and indigenous technology development.
  • Balanced growth: Ensuring equitable distribution of benefits and development across regions and communities was crucial. The Planning Commission strived to address regional disparities and promote inclusive growth.


  • Formulating Five-Year Plans: This core function involved extensive research, data analysis, and consultations with experts, ministries, and state governments. The plans outlined specific targets for investment, production, and social development in different sectors.
  • Mobilizing resources: The Planning Commission estimated financial requirements, collected domestic savings, and negotiated foreign aid to fund the plans. It also played a crucial role in setting priorities for budget allocation across various ministries.
  • Monitoring and evaluation: Regularly tracking progress against set targets was essential. The Planning Commission conducted mid-term appraisals, analyzed data, and identified bottlenecks or deviations from the plan.
  • Coordination and collaboration: The Planning Commission acted as a bridge between the central government, state governments, and various stakeholders. It facilitated communication, resolved disputes, and ensured coordinated implementation of the plans.
Niti AayogPlanning Commission
Chair PersonPrime MinisterPrime Minister
Vice-Chair PersonAppointed by PMDeputy Chairman(Nominated = Cabinet rank)
Governing CouncilCM’s and L-G’sNational Development Council
Member SecretaryTo be known as the CEO and to be appointed by the Prime MinisterSecretaries or member secretaries were appointed through the usual process
Part-time membersTo have a number of part-time members, depending on the need from time to timeThe full planning commission had no provision for part-time members
Full-time members the number of full-time members could be fewer than the planning commissionthe last commission had eight full-time members
Difference between Niti aayog and the Planning commission


In summary, while both the Planning Commission and NITI Aayog aim to facilitate economic planning and development in India, NITI Aayog has a more decentralized and flexible approach, encouraging the involvement of states and various stakeholders in the decision-making process. The shift from the Planning Commission to NITI Aayog reflects a change in the philosophy of economic planning in India, moving towards a more inclusive and dynamic model.

* * All the Notes in this blog, are referred from Tamil Nadu State Board Books and Samacheer Kalvi Books. Kindly check with the original Tamil Nadu state board books and Ncert Books.