NITI Ayog – The Story so far and the Way Ahead
NITI (National Institution for Transforming India) was formally set up on 1st January 2015, a few months after the rest of government. What does NITI do? What is NITI going to do? The second is a better question, because some strands of NITI’s work will fall into place from 2016-17, not before. 2015-16 has been a year of transition. The 14th Finance Commission submitted its Report in December 2014. However, because the Report needed to be placed before Parliament first, when many States formulated their respective Budgets for 2015-16 they didn’t factor in the recommendations of the 14th Finance Commission. Constitutionally, the only organ responsible for fiscal devolution to States is the Finance Commission. However, the mandate of the Finance Commission was diluted in the 1970s and the Plan versus non-Plan distinction came into existence. Plan transfers were routed through the historical Planning Commission. In addition, the Planning Commission designed templates for centrally sponsored schemes (CSS-s) and these increased in importance since the late-1960s. Legitimately, State governments complained about rigid templates of CSS-s, for which, they also had to provide matching grants. The 14thFinance Commission abolished the Plan versus non-Plan distinction and increases untied devolution from the divisible pool to States to 42%.
There may still be additional Union government funding (even 100%) and CSS-s for schemes that possess national importance. Who decides what these schemes are? It would have been easy for PMO, North Block or Niti Aayog to decide their contours. But that would have gone against the concept of federalism. Therefore, sub-groups of Chief Ministers were set up by Niti’s Governing Council on CSS-s, the Swacch Bharat Mission and skill development. Their reports have only become recently available. In the interim, for 2015-16, devolution from the Union government couldn’t stop. What has been done in 2015-16 is therefore a temporary measure, to be overtaken by the recommendations of the sub-groups. That’s the reason 2015-16 was an year of uncertainty, triggered partly by the fact that the 14th Finance Commission, which recommended such a major institutional change, did not allow for a transitory mechanism.
A large part of Niti’s mandate is the evaluation of public expenditure schemes, the examination of delivery and the linking of these schemes with tangible improvements in outcomes, difficult though this may be for social sectors, especially health. One can’t very well do this until one knows what these schemes are, whether funded (partly or wholly) by Union government, or whether funded by schemes States devise out of untied funds. That’s the reason I said Niti’s work will come into its own only from 2016-17.
This is also true of Niti’s function as a repository of best practices in States. Several States have done interesting things in delivery, worthy of dissemination and replication. From next year, Niti will take stock of these. It will also take stock of data, which will give an idea of base-line indicators, on the basis of which, outcome improvements can be measured. We have already chosen a set of around 50 indicators, clustered under heads like education (school), health, roads, water, electricity and mobile penetration. We are building this district upwards, though as a terminal goal, there is an intention to take this down to blocks, if not villages. The historical Planning Commission was also a source of data. For instance, where else will you get data on social sectors in one place? Now that we have SDGs, as successor to MDGs, which organ of government will gauge improvements in these? That devolves on Niti. For some indicators, there are problems with quality of data. In other instances, data are very difficult to get. As an example, for roads, we have ready data for national highways and even PMGSY. But you have no idea how difficult it is to get data on district roads. On Monday, 30th November 2015, Niti has organized a conference of Chief Secretaries of States, to see how these ideas can be taken forward.
Niti is also a think tank, though different people mean different things when they use this expression. It is not a think tank that dabbles in the abstract and the esoteric. It is interested in policy and suggesting better policy options, with networking with other such organization, including those that are outside government. But for this, Niti has to acquire some in-house expertise. Not many people know that the number of positions in Niti has been slashed from around 1250 in the former Planning Commission to around 600. These are positions, with vacancies. Niti doesn’t begin to function only because there is a Vice Chairman and three members. We are gradually advertising for these positions (they won’t only be filled from within government). Part of the think tank role is when issues are referred to you by government. That has started to occur, but will necessarily be in the private domain, not made public. The remaining part of the think tank role is when Niti picks up issues, suo motu, through a series of Working Papers. That’s going to happen as soon as we have people and in-house expertise. There are two verticals within Niti, so to speak. One is the link with States, much more active than with the former Planning Commission. That’s called the Team India initiative. The other is the think tank role, called the Knowledge Hub initiative.
Much of what I have said is already there on our website. Unfortunately, people often begin to judge an organization without bothering to check information that is already in the public domain.
Bibek Debroy is an economist and Member NITI Ayog.