Niti Aayog’s decade as an ideas platform

These were the words of Narendra Modi on August 15, 2014, in his first Independence Day speech as Prime Minister (PM). While radical, the step was not unexpected; much commentary within and outside the government had concluded that the existing institution no longer reflected the needs and structure of an increasingly market-driven Indian economy.

Niti Aayog came into legal existence on January 1, 2015. Its first decade has been shaped by the steady and wise leadership of its chairman, PM Modi, and by India’s rising profile in the global economy. It is my honour and privilege to hold the position of vice chairman at this auspicious moment, the third successive policy economist to be selected for this role.

Under our chairman’s guidance certain principles have been established which have served the institution well over the last decade.

The first has been to extract Niti Aayog from a direct financial allocation role. This is of particular relevance to India’s states, which earlier had to seek the Planning Commission’s funding for part of their development expenditures.

As such, the creation of Niti Aayog has marked a major move toward decentralisation. It has also prompted Niti Aayog to invent new tools to support the doctrine of “competitive and cooperative federalism”. These started with data-driven comparative indicators noted later in this article and have evolved to support states (at their request) to set up state-level ‘institutions of transformation’ (SITs).

As the nodal agency for tracking India’s performance on the UN’s Agenda 2030, Niti Aayog has devised and improved the SDG India Index, promoting competition and accountability among states, and the Composite Water Management Index, addressing India’s water crisis.

Chief ministers of all states and administrators of Union territories (and selected Union ministers) are all ex-officio members of Niti’s governing council which is chaired by PM as Niti Aayog’s chairperson. This annual meeting is the substantive embodiment of “Team India” which articulates a development vision for the country that transcends political differences. An important recent innovation is structured engagement with chief secretaries of state as preparation for the governing council meeting. A by-product of this governance structure is that Niti Aayog is seen as politically neutral in its interactions with states.

A second principle, with strictly limited exceptions (noted later in this article), is that at the Union level, Niti Aayog is encouraged to explore and promote new initiatives, but hand over implementation to line ministries which remain accountable for delivery. Niti Aayog is best placed to focus on cross-ministry issues, driving transformation and reform, fostering long-term thinking, and stimulating action-oriented debate.

This positioning equips Niti Aayog to be an informed commentator on the progress of these schemes. There are several examples of initiatives that were led by Niti Aayog and then taken over by Union ministries. These include the e-mobility initiative, the Production-Linked Incentive scheme, Mission LiFE and the promotion of Green Hydrogen. Typically, these are initiatives that are located within a broader framework to which Niti Aayog would also have contributed, such as India’s Nationally Determined Contributions on climate change or a broad strategy to reduce the burden of out-of-pocket health expenditures for poor households.

Inspired by the belief of the PM that focused, data-driven management was at least as important as finance, Niti Aayog designed the Aspirational Districts Programme in 2018 for a carefully chosen, stable cohort of 112 underdeveloped districts to bring about concrete changes in health, education, agriculture, skill development and infrastructure. The relative performance of districts is tracked monthly, and small but prestigious cash awards are distributed by Niti Aayog for well-performing districts. External evaluations have testified to the substantive difference that this approach has brought about in some of the poorest parts of the country.

The Aspirational Blocks Programme (ABP) launched in January 2023 builds on the success of the Aspirational Districts Programme. It targets 500 underdeveloped blocks in India, many of which are surprisingly close to otherwise affluent regions. Niti Aayog’s role has been to train and empower local officials to create a robust tracking system at the block level, and support ‘saturation’ (100% household coverage) of key central government programmes at the block level.

Since 2016, Niti Aayog has housed the Atal Innovation Mission (AIM) to promote innovation and entrepreneurship through initiatives like Atal Tinkering Labs, training over one crore school-level students in design thinking and entrepreneurship, and Atal Incubation Centres for startups. AIM 2.0 aims to expand innovation ecosystems to 22 languages and customize them for hilly and tribal regions such as Jammu and Kashmir and the Northeast.

PM Modi has described the coming two decades as India’s “Amrit Kaal”, an era of unprecedented opportunity that needs to be harnessed to meet the aspirations of all Indians. The primordial challenge facing the country is to use technology to generate better opportunities for India’s young workforce while respecting planetary boundaries.

Rising labour productivity is the only sure route to better incomes; expanding employment with abundant availability of increasingly well-educated labour will both require and facilitate faster growth. The challenges and opportunities of the coming decade will draw upon the lessons of the last 10 years in at least three areas: Niti Aayog’s ability to work across departmental silos at the Centre; to engage with states as willing partners; and to ensure coherence between immediate imperatives and medium-term goals. As a young and dynamic institution, Niti Aayog will evolve to remain relevant in the years ahead.

Suman Bery is vice chairman,Niti Aayog.The views expressed are personal