NEW DELHI: Amid growing criticism of the NITI Aayog for not living up to the think-tank’s mandate after the Planning Commission was phased out, former Finance Commission chairman Vijay Kelkar suggested revisiting its character, arguing it should be given financial powers to address regional imbalances.
In a recent paper, ‘Towards India’s new fiscal federalism’, Kelkar said the abolition of the Planning Commission hurt the government’s policy reach. Yet, he did not seek the plan panel’s revival. Instead, he suggested creating of a new NITI Aayog that has financial powers to allocate resources to states.
Kelkar is currently chairman of the National Institute of Public Finance and Policy.
To make the Niti Aayog 2.0 more effective, he said it must be part of the ‘High Table’ of decision-making of the government. “This means the vice-chairman of the new Niti Aayog will need to be a permanent invitee of the Cabinet Committee on Economic Affairs (CCEA). Thus, the new Niti Aayog will make available to the highest level of policy making,” the paper said.
According to Kelkar’s calculation, the NITI Aayog 2.0 would annually need resources of around 1.5 to 2 per cent of the GDP to provide suitable grants to the states to mitigate development imbalances.
When NITI Aayog was first formed in 2015, it was tasked with preparing roadmaps for transformation of the country. Later, it was asked to take forward the idea of cooperative federalism, for which it reached out to state governments to resolve issues that were stuck at various Central ministries. But the initiative died after the exit of the first NITI vice chairman Arvind Panagaria.