Explainer: PM Modi rejigs NITI Aayog with Amit Shah, Rajnath Singh as ex-officio members

Federal policy think-tank, NITI Aayog, chaired by prime minister Narendra Modi, was reconstituted on Thursday, with the introduction of key Union ministers as its ex-officio members, the government said in a statement.

The move comes after the Centre formed cabinet committees, and home minister Amit Shah was made a member in all of them.

Besides Shah, PM Modi has appointed defence minister Rajnath Singh, finance minister Nirmala Sitharaman, and agriculture minister Narendra Singh Tomar to the think tank, which plays a crucial role in policymaking at the Centre.

Composition of the think-tank

The induction of cabinet ministers into the body’s governing council, which is already comprised of all state chief ministers, will help forge better understanding between the centre and states in terms of policymaking, the PIB statement read.

Lieutenant governors of union territories, several union ministers, and senior government officials also form a part of the governing council which is NITI Aayog’s apex body. 

Meanwhile, road transport and MSME minister Nitin Gadkari, social justice and empowerment minister Thawar Singh Gahlot, railways and commerce minister Piyush Goyal, and minister of statistics and programme implementation Rao Inderjit Singh, have been declared as new special invitees to the panel.

Rajiv Kumar will continue to serve as the vice-chairperson, along with full-time staff members—Ramesh Chand, VK Saraswat and VK Paul—who will continue reporting directly to Modi. The name of economist Bibek Debroy was dropped, according to an Economic Times report. Amitabh Kant, CEO of the think tank under the earlier NDA government, did not feature on the list either.

Financial powers, none

In the first 100 days of Modi’s second term, a slew of ‘big-bang’ economic reforms including changes in labour laws, privatisation moves, and creation of land banks for new industrial development, are likely to be pursued, The Wire reported on May 31, citing Rajiv Kumar.

The newly-constituted governing council is supposed to meet for the first time on June 15. PM Modi will chair the meeting to discuss various issues concerning disinvestment of 50 CPSE assets, water management, agriculture, and security, official sources said Tuesday. 

“All the chief ministers and heads of union territories have been invited by the NITI Aayog to participate in the meeting,” sources said. 

West Bengal chief minister Mamata Banerjee who is smarting from the major reverses her party suffered in the recently concluded polls, informed reporters that she will not be attending the meet. Calling it an unproductive exercise, she cited the organisation’s lack of financial powers to argue that it would be “fruitless” to participate in it.

In a three-page letter to the PM, she made a case for giving the think-tank financial powers, as suggested by a former chairman of the Finance Commission.

“I now find that senior officials of the NITI Aayog themselves are making public statements that should be given some powers in allocating development expenditures to state—a role that Planning Commission had played earlier,” Mamata Banerjee wrote in the letter.

“May I also reiterate that the National Development Council which has been given a quiet burial, may also be subsumed within the broadened constitutional body of Inter State Council,” she added.

It is worth noting that the National Institution for Transforming India (NITI) Aayog was constituted via a resolution of the Union Cabinet on January 1, 2015, replacing the erstwhile Planning Commission, which had discretionary powers over providing funds to the states.

What NITI Aayog has been up to

Twelve five-year plans and six annual plans involving fund outlays of over Rs 200 lakh crore later, and 65 years after its establishment by India’s first prime minister Pandit Jawaharlal Nehru, the Planning Commission (PC) was scrapped in favour of a new federal policy think-tank.

Contrary to the PC’s top-down approach, NITI Aayog has deployed a bottom-up approach in its most popular initiatives so far, including the “15-year road map”, “7-year vision, strategy, and action plan”, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Medical Education Reform, Indices measuring states’ performance in health, education, and water management, among others.

While designing strategic and long-term policies and programmes for the central government, the organisation also provides relevant technical advice to the Centre and states. 

It works with state governments on the rationalisation of centrally-sponsored schemes like skill development, as well as in the promotion and achievement of the targets of Swachh Bharat Abhiyan, and the formulation of task forces on poverty.

NITI Aayog also organises the Transforming India lecture series, which is focused on sharing best practices in governance practiced in various parts of the world.

Writing for Qrius, economist Sanjay Thapa had noted that the new NITI Aayog has largely the same structure as the PC, which was also known as Yojana Aayog. “The constituent representatives of states remain the same, the hierarchy remains the same with the PM as the Chairman. The body’s proposals go to the NDC, and the sectorial allocations are still decided by the body,” he wrote asking, “So where’s the difference?  Where’s decentralisation?”

Many of its programmes have also come under scrutiny and criticism, including Digital India, the GDP back-series update, and some of the Centre’s agricultural reforms. The opposition, led by the Indian National Congress, has called it dubious on numerous occasions, even promising to bring back the Planning Commission in its Lok Sabha poll manifesto.

A tool for the government to explain it away

The Centre kicked up a major row last year when it claimed that India’s economy had grown by 8.5% in 2010-2011, and not by 10.3% as announced earlier, thus bringing the GDP accrued during UPA’s tenure down by nearly 2%.

The Central Statistics Office computed the new data and released it through NITI Aayog, after the Centre dismissed the earlier GDP data the National Statistical Commission had put out; the latter’s data suggested that the economy had grown faster during the previous government.

A new back series was called for, because old data was deemed incomparable to that of the later years, although the Centre’s move to change the base year from 2004-2005 to 2011-2012 after Modi came to power has been deemed as a deliberate bid to introduce confusion to the statistic.

The recalibrated growth rates now reflects the average growth in GDP under the BJP government (7.35%) between 2014-2018—marginally better than that of their predecessor’s (6.7%) during 2005-2014.

Moreover, the move to bypass and supersede the NSC’s series by opting for NITI Aayog’s has not only been opposed by members of the NSSO, but also by the Reserve Bank of India

Many economists, including former chief statistician Pronab Sen, also questioned NITI Aayog’s role in the release of the statistical exercise of CSO, which comes under the ministry of statistics and programme implementation (MoSPI).

Similar tactics to waylay the masses went into the positive propaganda of the Digital India initiative.

HuffPost India found that the government with the help of NITI Aayog had inflated e-governance data by designating previously uncategorised services like railway bookings, debit card and credit card transactions, NEFT, RTGS banks transfers, Aadhaar authentication, and e-KYC transactions with private vendors, as “e-governance”.

It also allegedly inflated the weather and crop updates delivered over SMS to millions of farmers in a bid to show that rural India was embracing digital services, thus enabling it to claim a 300% uptick in e-governance transactions during its tenure, while making it difficult to compare the data with previous years. 

NITI Aayog also proposed that 75% of the premium paid by farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY), an agriculture insurance scheme against climate and other risks, will be returned to them if they don’t file claims for crop damages for four to six consecutive agricultural seasons.

Government officials reckon that such a move would attract more farmers into the insurance fold. At present, only 29% of the 12 crore farmers/cultivators in the country are aware of the crop insurance scheme, which has been criticised as being of more benefit to private insurers more than farmers.

Studies showed that since the scheme’s introduction, crop insurance coverage not only shrank but now insurers pocket up to 44% of the public money that goes into funding PMFBY, compared to 12% in case of earlier crop insurance programmes.

It has also faced questions regarding its Composite Water Management Index (CWMI), which was released in the wake of India’s ranking 120 out of 122 countries on the water quality index last year.

The CWMI has ranked India’s states (except Jammu and Kashmir) on the basis of their ability and preparedness to manage their water resources properly. But, the report did not contain any details on how this ranking scheme was arrived at nor did it clarify whether certain critical parameters were included. Many of its indices are suspect and short-sighted, Business Standard concluded, adding that NITI Aayog should consider including data and analysis with respect to water productivity, water-use efficiency, crop water demand, drinking water supply rates, quality of supply, health indicators, and environmental impact. 

Prarthana Mitra is a Staff Writer at Qrius

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