THE CONTEXT: The boycott of the ninth Governing Council meeting of the NITI Aayog by several State and Union Territory representatives underscores growing concerns about the think tank’s effectiveness and its role in India’s federal structure. Established to replace the Planning Commission with an emphasis on cooperative federalism, NITI Aayog’s advisory-only capacity and lack of resource allocation powers have led to dissatisfaction among opposition-ruled states.
THE ISSUES:
- Perceived Lack of Allocations and Projects: Several Chief Ministers boycotted the NITI Aayog meeting due to concerns over the perceived lack of allocations and projects for their states in the Union Budget. This suggests a disconnect between the central government’s budgetary allocations and the states’ expectations and needs.
- Advisory Role Limitation: NITI Aayog’s role as merely an advisory body without the power to distribute resources or allocate funds has led to state disenchantment. This limitation contrasts with the Planning Commission, which had a more direct role in resource distribution and consultations with states.
- Competitive Federalism: The shift from a “top-down” approach to fostering “cooperative federalism” has inadvertently led to “competitive federalism.” This has created a scenario where states are evaluated and ranked, potentially fostering competition rather than collaboration.
- Political Bias and “Double Engine” Governments: Opposition-ruled states complain that the central government favors states ruled by the BJP for investment projects. This perception of political bias undermines the principles of cooperative federalism and equitable development.
- Diminished Consultations with States: The end of the Planning Commission has led to limited consultations with states on grants and projects. This has left states out of critical financial and developmental decision-making processes.
- Need for Institutional Backing for Infrastructure and Capital Investments: While the Finance Ministry focuses on macroeconomic stability, there is a need for an institution that can address growth through infrastructure and capital investments in states. The NITI Aayog needs to be re-envisioned to take on some responsibilities of the Planning Commission to support true cooperative federalism and balanced regional development.
THE WAY FORWARD:
- Strengthening Cooperative Federalism: According to the NITI Aayog’s objectives, fostering cooperative federalism through continuous support initiatives and mechanisms with states is crucial. Establishing more inclusive and structured consultation mechanisms with states will reinforce the framework for cooperative federalism.
- Empowering NITI Aayog with Resource Allocation Powers: Grant NITI Aayog limited powers for resource distribution and allocation to states, akin to the Planning Commission’s role. By having a say in resource allocation, NITI Aayog can ensure a more balanced and equitable distribution of funds, addressing the developmental deficits of various states.
- Enhancing Monitoring and Evaluation Mechanisms: Develop robust monitoring and evaluation frameworks to track project implementation, impact, and fund utilization. Implementing advanced monitoring systems can ensure that funds are utilized efficiently, and projects are completed on time. The Development Monitoring and Evaluation Organisation (DMEO) within NITI Aayog can be further strengthened to provide real-time data on project progress.
- Promoting Competitive Federalism with Equity: Balance competitive federalism by ensuring that all states receive fair opportunities for development projects and investments regardless of political affiliation. Establish clear criteria and transparent processes for project allocation to prevent any perceived or actual bias towards states governed by the ruling party at the center.
- Building Capacity and Knowledge Sharing: Invest in capacity-building initiatives and create knowledge-sharing platforms among states. Provide training and resources to state officials to enhance their ability to manage and implement projects effectively. NITI Aayog’s role as a think tank and knowledge hub can be expanded to facilitate these initiatives.
THE CONCLUSION:
NITI Aayog must evolve to incorporate some of the resource distribution and consultative roles previously held by the Planning Commission. This shift is essential to address various states’ developmental needs more equitably and restore faith in the institution among all political entities.
UPSC PAST YEAR QUESTIONS:
Q.1 How far do you think cooperation, competition, and confrontation have shaped the nature of federation in India? Cite some recent examples to validate your answer. 2020
Q.2 The concept of cooperative federalism has been increasingly emphasized in recent years. Highlight the drawbacks in the existing structure and the extent to which cooperative federalism would answer the shortcomings. 2015
Q.3 How are the principles followed by the NITI Aayog different from those followed by the erstwhile Planning Commission in India? 2018
MAINS PRACTICE QUESTION:
Q.1 Critically analyze NITI Aayog’s role in promoting cooperative federalism in India. Discuss its challenges in fulfilling this role and suggest measures to enhance its effectiveness in fostering cooperative federalism.
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