Parliamentary Panel Criticises NITI Aayog
Context:
The Parliamentary Standing Committee on Finance has strongly criticised NITI Aayog over discrepancies in its budget allocations and spending over the past three financial years.
About NITI Aayog:
NITI Aayog, or the National Institution for Transforming India, is the premier policy think tank of the Government of India. It was established on 1 January 2015 through a resolution of the Union Cabinet, replacing the Planning Commission, which had been in place since 1950. The need for this transition arose from criticisms that the Planning Commission’s centralised approach was outdated and unresponsive to the evolving economic and developmental needs of the country. NITI Aayog was designed to foster a more participatory and cooperative model of governance between the Centre and states, aligning with modern developmental priorities.
Some of the indices published:
- School Education Quality Index (SEQI): Assesses the quality of school education across states and union territories.
- State Health Index: Evaluates health outcomes, governance, and processes in states and union territories.
- Composite Water Management Index: Tracks water management practices and efficiency across states.
- Sustainable Development Goals (SDG) India Index: Measures progress towards achieving the UN’s SDGs at the state and national levels. The latest edition, SDG India Index 2023-24, shows significant improvement in India’s overall SDG score, rising to 71 from 66 in 2020-21 and 57 in 2018.
- India Innovation Index: Ranks states and union territories based on their innovation environment.
- Export Preparedness Index: Evaluates states’ readiness and performance in exports.
- Multidimensional Poverty Index (MPI): Assesses multidimensional poverty across states and union territories, helping identify areas for targeted interventions.
- Fiscal Health Index: Provides insights into the fiscal health of Indian states, launched as an annual publication
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- The committee, chaired by Bharatiya Janata Party (BJP) MP Bhartruhari Mahtab, accused India’s premier policy think tank of “amateur planning” and lacking foresight in financial projections.
Concerns Over Budget Planning and Utilisation
- In its report, the committee highlighted a pattern of unrealistic budget estimates and inefficient fund utilisation by the NITI Aayog.
- It pointed out that the think tank has consistently failed to project its expenditures accurately, leading to a mismatch between allocated funds and actual spending.
- The report noted that while NITI Aayog has sought ₹1,006.60 crore as Budget Estimates (BE) for FY26, marking a 16.77% increase from ₹837.26 crore in FY25, past trends raise concerns.
- In FY23, actual spending stood at ₹849.10 crore, far exceeding the initial BE of ₹321.42 crore.
- In FY24, the actual expenditure was only ₹290.82 crore, significantly lower than the BE of ₹824.39 crore.
- For FY25, the committee found that only ₹197.49 crore had been utilised in the first three quarters—just 23.58% of the allocated budget.
- The panel expressed concern over this erratic spending pattern and called for a more realistic assessment of targets and expenditures.
Call for Fiscal Prudence and Efficiency
- The committee urged NITI Aayog to avoid fund spillovers and unnecessary parking of resources under non-essential budget heads.
- It recommended that the institution adopt greater fiscal discipline in allocating and utilising resources, ensuring that budget estimates align more accurately with actual spending needs.
- Furthermore, the report cautioned the think tank against bureaucratic delays and inefficiencies, stating that pending approvals were hindering key initiatives such as the Atal Innovation Mission (AIM).
- The committee stressed that NITI Aayog must streamline its processes to ensure the effective implementation of crucial policy initiatives.
Moving forward, the think tank is expected to adopt a more precise and transparent approach in budgeting and expenditure management to enhance its effectiveness in driving India’s policy framework.
