Five-Year Plans & NITI Aayog

📚 This topic overlaps across exams — read our in-depth, shared write-up: Economic Growth, Development & Planning →

📖 The Planning Commission era

Set up in 1950 by a Cabinet resolution (not a statutory or constitutional body), the Planning Commission formulated India's Five-Year Plans, modelled loosely on Soviet-style centralised planning, allocating resources to states and sectors according to national priorities. India implemented twelve Five-Year Plans in total, spanning from 1951 to 2017.

🔄 The shift to NITI Aayog

In 2015, the Planning Commission was replaced by NITI Aayog (National Institution for Transforming India), also formed by executive resolution. Unlike the Planning Commission, NITI Aayog does not have the power to allocate funds to states — instead, it functions as a policy think tank promoting "cooperative and competitive federalism," encouraging states to design and compete on their own development strategies rather than following a single top-down plan.

🧭 Why the shift happened

Critics of the Planning Commission argued its centralised, one-size-fits-all approach didn't suit India's diverse states, and that a market-oriented economy (especially after the 1991 reforms) needed a more flexible, advisory institution rather than a resource-allocating body.

💡 Key Facts

The Planning Commission (1950) was set up by executive resolution, not by statute or the Constitution.
India completed twelve Five-Year Plans (1951-2017).
NITI Aayog (2015) replaced the Planning Commission but cannot allocate funds like it could.
NITI Aayog promotes 'cooperative and competitive federalism.'

🔖 60-Second Revision

Planning Commission (1950, executive resolution) → 12 Five-Year Plans (1951-2017).
NITI Aayog (2015, executive resolution) replaces it.
Key difference: NITI Aayog is a think tank, no fund-allocation power.
NITI Aayog's approach: cooperative + competitive federalism.