The process of policy planning also has to change from "top to bottom" and "bottom to top", he said, stressing that it was impossible for the nation to develop unless states develop.
Modi said this in his remarks at the meeting with Chief Ministers, convened to discuss the structure of the new body which would replace the Planning Commission.
The meeting was attended by Home Minister Rajnath Singh, Finance Minister Arun Jaitley and chief ministers with the exception of West Bengal Chief Minister Mamata Banerjee and J&K Chief Minister Omar Abdullah.
The states should have a key role in the new body, Modi said, adding "states sometimes feel there is no platform to express their views...There should be an effective mechanism to address inter-state disputes."
More From This Section
"Can we develop a new mechanism, that plans according to India's strengths, empowers states, and brings on board all economic activity, including that which happens outside the government," the Prime Minister asked, as he set the tone for the discussion.
Recalling the remarks of former Prime Minister Manmohan Singh, who was associated for a long time with the Planning Commission, he said Singh himself had noted that the body has no futuristic vision in the post-reform period.
Singh, he added, also wanted the Planning Commission to reinvent itself to remain more effective and relevant in the present situation.