With 10 State and Union Territory representatives skipping the ninth Governing Council meeting of the NITI Aayog chaired by Prime Minister Narendra Modi — seven of them boycotted it — the think tank’s role has been called into question. The Chief Ministers of Tamil Nadu, Kerala, Karnataka, Telangana, Punjab, Himachal Pradesh and Jharkhand did so because of concerns with the perceived lack of allocations and projects to their States in the Union Budget. But the boycott and, later, the walkout by West Bengal Chief Minister Mamata Banerjee, suggest that the role of the think tank, limiting itself to an advisory body to the Union Government, has led to disenchantment among States, even if the protests were limited to leaders belonging to the political opposition. Constituted by the NDA government in its first term, the NITI Aayog was to replace the Planning Commission, doing away with the “top-down” approach of the earlier body, and to focus on “cooperative federalism”. But by limiting itself to an advisory body without any powers of resource distribution or allocation to States and other bodies and focusing on creating indices to evaluate States, it has led to the unintended consequence of “competitive federalism”; while the Finance Ministry has unfettered powers to decide on grants to States. In contrast, the Planning Commission, which too had its detractors, at least allowed for consultations with States in such matters.
It has not helped matters that the Bharatiya Janata Party has sought to seek votes in State elections on the basis of providing “double engine” governments, leading to complaints by Opposition-ruled States that the Centre has favoured those ruled by the BJP for investment projects. The fact that the NDA government now is crucially dependent upon the support of parties that rule Bihar and Andhra Pradesh — States that suffer varying developmental deficits — and the express intention of Finance Minister Nirmala Sitharaman to address their demands specifically in the Budget have not been lost on the government’s detractors. Irrespective of the merit in this contention, the fact is that consultations with States on grants and projects have become limited after the end of the Planning Commission. While the 16th Finance Commission is tasked with the removal of a horizontal imbalance among States and the Finance Ministry’s focus is on macro-economic stability and the financial system, the need to address growth through infrastructure and capital investments in States is something that requires institutional backing at the Centre as well. The NITI Aayog must be re-envisioned to bring back some of the responsibilities that the Planning Commission had for States for a truer “cooperative federalism”.
