INDIAN

BUSINESS
ENVIRONMENT
Significance of NITI & Its recommendations for the
growth of Indian Economy

NITI AAYOG

Introduction:
The NITI Aayog was formed on January 1, 2015. In Sanskrit, the word “NITI” means
morality, behavior, guidance, etc. But, in the present context, it means policy and the NITI
stands for “National Institution for Transforming India”. It is the country’s premier policy-
making institution which is expected to bolster the economic growth of the country. It aims to
construct a strong state that will help to create a dynamic and strong nation. This helps India to
emerge as a major economy in the world. The NITI Aayog’s creation has two hubs called “Team
India Hub” and “Knowledge and Innovation Hub”.
1.The Team India: It leads the participation of Indian states with the central government.
2.The Knowledge and Innovation Hub: it builds institution’s think tank capabilities.
NITI Aayog is additionally creating itself as a State of the Art Resource Center, with
the essential resources, knowledge, and skills that will empower it to act with speed, advance
research and innovation, bestow crucial policy vision to the government and manage
unforeseen issues. The reason for setting up the NITI Aayog is that people had expectations for
growth and development in the administration through their participation. This required
institutional changes in administration and active strategy shifts that could seed and foster
substantial scale change.

MEANING:
The NITI Aayog is a policy think tank of the Government of India, established with
the aim to achieve sustainable development goals with cooperative federalism by fostering the
involvement of State Governments of India in the economic policy-making process using a
bottom-up approach. Its initiatives include "15-year road map", "7-year vision, strategy, and
action plan", AMRUT, Digital India, Atal Innovation Mission, Medical Education Reform,
agriculture reforms , Indices Measuring States’ Performance in Health, Education and Water
Management, Sub-Group of Chief Ministers on Rationalization of Centrally Sponsored Schemes,
Sub-Group of Chief Ministers on Swachh Bharat Abhiyan, Sub-Group of Chief Ministers on Skill
Development, Task Forces on Agriculture and up of Poverty, and Transforming India.

Objectives:
1.To evolve a shared vision of national development priorities, sectors, and strategies with the active
involvement of States in the light of national objectives

2.To develop mechanisms to formulate credible plans at the village level and aggregate these
progressively at higher levels of government.

3..To ensure, on areas that are specifically referred to it, that the interests of national security are
incorporated in economic strategy and policy

4.To foster cooperative federalism through structured support initiatives and mechanisms with the
States on a continuous basis, recognizing that strong States make a strong nation.

5.To provide advice and encourage partnerships between key stakeholders and national and
international like-minded Think tanks, as well as educational and policy research institutions

6.To offer a platform for resolution of inter-sectoral and inter departmental issues in order to accelerate
the implementation of the development agenda
7.To focus on technology upgradation and capacity building for implementation of programmes and
initiatives.

8.To undertake other activities as may be necessary in order to further the execution of the national
development agenda, and the objectives mentioned in above.

9.To pay special attention to the sections of our society that may be at risk of not benefiting adequately
from economic progress.

10.To create a knowledge, innovation and entrepreneurial support system through a collaborative
community of national and international experts, practitioners and other partners.

Features:
NITI Aayog’s entire gamut of activities can be divided into four main heads:

1.Design Policy & Programme Framework

2.Foster Cooperative Federalism

3.Monitoring & Evaluation

4.Think Tank and Knowledge & Innovation Hub

Significance:
1.Pro-people: it fulfills the aspirations of society as well as individuals.

2.Pro-activity: in anticipation of and response to citizen needs.

3.Participation: involvement of citizenry.

4.Empowering: Empowering, especially women in all aspects.

5.Inclusion all: of inclusion of all people irrespective of caste, creed, and gender.

6.Equality: Providing equal opportunity to all especially for youth.

7.Transparency: Making the government visible and responsive.

PRESENT COMPOSITION OF NITI AAYOG:

Chairperson: Shri Narendra Modi, Hon'ble Prime Minister
Vice Chairperson: Dr. Rajiv Kumar

Full-Time Members:
  Shri V.K. Saraswat
 Prof. Ramesh Chand
 Dr. V. K. Paul

Top recommendations from the action plan

Double farmer income:
Farmers make up nearly half of the country’s workforce, the NITI Aayog estimates.

However, over the last few decades, their plight has been a cause of concern. Failed crops and high debt
pushed over 12,000 agricultural labourers to commit suicide in 2015 alone. Many even quit farming
completely.

The think tank has proposed enhancing agricultural productivity by introducing new technologies and
shifting from low- to high-value activities such as horticulture, dairying, poultry, piggery, fisheries, and
forestry.

Jobs:
The NITI Aayog pegs India’s unemployment rate at between 5% and 8% currently. But it believes
unemployment isn’t the real challenge.

“Indeed, unemployment is the lesser of India’s problems. The more serious problem instead is severe
underemployment. A job that one worker can perform is often performed by two or more…In effect,
those in the workforce are employed, but they are overwhelmingly stuck in low-productivity, low-wage
jobs.”

Safer roads, better infrastructure:

Since coming to power, the Modi government has been aggressively focused on
infrastructure – both physical and digital. It must keep the path, the report says, spending on key
projects like roads, railways, ports, and civil aviation.

“The lack of inter-connectedness and synergies in the transport network prevents the
efficient movement of people and goods,” the NITI Aayog report says.” It wants more rural roads and
the creation of central and state level road safety boards to set and enforce safety rules. In 2015, over
140,000 Indians died in road mishaps.

Digital India:
In line with the government’s Digital India initiative, the think tank proposes to ramp up digital
infrastructure.

It wants the government to ensure that citizens are trained in the use of the internet through
school curricula and vocational education. Some 69% of Indians don’t use the internet because they
don’t understand it, according to NITI Aayog. It has also proposed to speed up government initiatives to
bring wireless and broadband connectivity to millions of villages through fibre cables, both underground
and over power lines.

Regional development:
NITI Aayog has divided the country into four key geographies: the Northeast, coastal areas,
Himalayan states, and the desert and drought-prone areas.

In the long-neglected Northeastern states, the think tank proposes ramping up infrastructure,
while also bringing connectivity to neighbouring countries such as Myanmar. On the coasts, besides the
need for infrastructure, it sees huge potential for tourism. “Beach holidays across the globe have grown
by 18% over the last five years and remain the most important segment of leisure travel constituting
28% of all holiday trips”.

Government and judiciary:

Two of its key recommendations concern the Indian bureaucracy and judiciary.

India’s bureaucracy, acutely short of officers as it is, has long been blamed for red tape. Many of
its officers are appointed through a national level examination, leaving the private sector out of policy
making. “Today, the rising complexity of the economy has meant that policy-making is a specialised
activity,”. “Therefore, it is essential that specialists be inducted into the system through lateral entry.
Such entry will also have the beneficial side effect of bringing competition to the established career
bureaucracy. ”

Similarly, NITI Aayog proposes to introduce a judicial performance index to track trials and tackle
pendancy. “Such an index could be established to help high courts and high court chief justices keep a
track of performance and process improvement at the district courts and subordinate levels for reducing
delay.

Skills and welfare:

By 2020, India is poised to become the world’s youngest country with an average age of 29
years; by 2030, it will have the world’s largest working-age population of 962 million people.
 However, India has also been struggling with the quality of school education. The report has
asked the government to focus on foundational learning, conduct a national-level assessment to
understand the quality of education to suggest corrective measures, and also give more autonomy to
higher-education institutes.

NITI Aayog has proposed setting up an independent authority to oversee the various skill
development programs of the government.

Healthy India:
The policy think tank has suggested higher spending on health care. India spends about 1% of
its GDP on public health, compared to 3% in China and 8.3% in the US.

“Over the course of the next three years, the health care system in the country must prioritise
public health and shift from being curative to preventive,” the report noted. Key goals include reducing
the maternal mortality rate to 120 deaths per 100,000 live births from the current 167, reducing the
infant mortality rate to 30 deaths per 1,000 live births , and reducing the incidence of tuberculosis to
130 from the current 217.