Can NITI Aayogs replace State Planning Boards to spur economic growth?

Experts believe merely replacing the state planning boards with such bodies won't make them effective

Last month, it was reported that the Centre was taking steps to replace State Planning Boards with state Aayogs for economic growth. The plan will be implemented in 10 states in the first phase and the rest by March 2023. But the NITI Aayog has clarified that the exercise is likely to involve guidance rather than compulsion to encourage states to replace their planning boards with Aayog-like bodies.
 

The official spokesperson said the move was part of NITI’s mandate of fostering cooperative federalism, by helping states prepare development strategies and visions to achieve their socioeconomic goals.
 

States that are interested can either establish State Institutions for Transformation (SITs) to drive their development agendas or reimagine the role of institutions such as planning departments and boards.
 

The critical question is: What can an SIT deliver that state planning boards cannot?The spokesperson said these SITs will be structured according to a state’s requirements and they will play a crucial role in galvanising partnerships, resources, ideas, and synergies required to achieve its aspirations. NITI Aayog will provide sectoral expertise to make the SITs dynamic and agile.

In fact, Assam and Karnataka have already created their state Aayogs. One of the primary functions of Assam’s State Innovation and Transformation Aayog is the focus on sustainable development goals.
 

Uttar Pradesh has sought NITI Aayog assistance to restructure the state’s planning board. Earlier this year, NITI Aayog Vice-chairman Suman Bery and CEO Parameswaran Iyer had called on Chief Minister Yogi Adityanath to discuss the matter.
 

But Pronab Sen, a principal advisor in the erstwhile Planning Commission, pointed out that state planning boards are defunct, except in five or six states including Kerala and West Bengal. “Everything depends on how seriously the states take them. If they don’t take planning boards seriously, how will replacing them with SITs or creating separate SITs help the situation?”

N R Bhanumurthy, vice chancellor of Dr B R Ambedkar School of Economics University, Bengaluru, added, “It cannot be a one-size-fits-all approach.” Conceptually, he added, what NITI Aayog is saying is: when there is no Planning Commission at the central level, why are there planning boards at the state level?
 

“I would slightly disagree, for the simple reason that states have a larger role than NITI Aayog in focusing on regional issues, or divergences, which are huge for them. Unfortunately, NITI Aayog doesn’t really look at that particular aspect,” he said.

There is still a need for a planning body because the bottom-up approach is very important in states. “You could have a similar institution to NITI Aayog at the state level, but with different terms of reference,” he said, while conceding that most states have a weak planning board that needs to be revived.
 

On the other hand, Arun Maira, a member of the erstwhile Planning Commission, feels replacing the planning board with Aayog-like bodies is a very good idea. “This way governance can be made more effective,” he said.
 

“Towards the end of the Planning Commission era, there was a proposal to change the role of the body at the Centre and also planning boards in the states. States such as Kerala, Tamil Nadu, and Odisha were on board with this suggestion,” he recalled.

According to Sen, it is worth examining what the NITI Aayog has achieved since it was set up in 2015. One of the critical changes was that unlike the Planning Commission, NITI Aayog would not have fund allocation powers; its mandate was essentially to act as a think-tank for the government.