Badal said the "unprecedented" step will ensure more participation of states in the policy-making framework.
"With the formation of NITI Aayog, the chief ministers will have more involvement in the planning process, which will give boost to the overall development of the country and prosperity of its people," Badal said here today.
He alleged that chief ministers of various states, who are better connected at the grassroot level, were hitherto ignored while framing policies at the national level.
During the governments run by Congress at the Centre, the states had hardly "any say" in policy formulation, which resulted in "lop-sided" development of the country, he alleged.
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Citing an example, Badal said the top brass of erstwhile Planning Commission was not even aware of the problem of waterlogging in some areas of Punjab then how could they allocate the required funds for mitigating the woes of people residing in these areas.
"Prime Minister Narendra Modi deserves applause for taking this visionary decision, which will transform the destiny of the countrymen," he added.
The NITI Aayog will have a governing council comprising all state Chief Ministers and Lt Governors and will work towards fostering a "co-operative federalism" for providing a "national agenda" to the Centre and states.
Asked to comment on a recent Ordinance brought by the Union government on Land Acquisition Act, the Chief Minister said paramount importance must be given to safeguarding the interests of farmers at any cost and added that developmental works initiated by the government for the welfare of the people should also not get affected due to any reason.