Prime Minister Narendra Modi has reportedly picked US-based economist Arvind Panagariya as vice-chairman of the National Institution for Transforming India (NITI) Aayog that the government is setting up to replace the Planning Commission.

Panagariya is a professor of economics at New York's Columbia University, a former chief economist at the Asian Development Bank, and has also worked with the IMF, WTO and World Bank in various capacities.

He is a staunch advocate of free-market economics and is considered close to the ruling BJP.

The Niti Aayog will be headed by the Prime Minister as chairman and is expected to be different from the Soviet-styled Planning Commission. The Nehruvian institution was criticised for being too bureaucratic and socialist in its outlook.

For instance, in a big nod to federalism the new body will have all chief ministers of states and lieutenant governors of Union Territories as its members.

“Having served as a CM (chief minister) in the past, I am very much aware of the importance of actively consulting the states. Niti Aayog does precisely that,” tweeted Modi last week.

“Through the Niti Aayog we wish to ensure that every individual can enjoy the fruits of development & aspire to lead a better life,” he added.

The prime minister had announced in his Independence Day speech that the 65-year-old Planning Commission that pioneered India’s five-year planned development approach would give way to a new body in sync with contemporary challenges.

A cabinet resolution passed last week said the Niti Aayog would evolve a "framework national agenda" for the PM and chief ministers, adding that it would invite national and international experts to create knowledge support.

The resolution said the Planning Commission was no longer relevant as it was set up when India was an under-developed economy and it is now emerging as one of the largest in the world.

“From being preoccupied with survival, our aspirations have soared and today we seek elimination rather than alleviation of poverty,” it said.

Apart from a vice-chairman, the new institution would have a chief executive officer, four cabinet ministers as ex-officio members, five full-time members and two part-time members from universities and research organisations on a rotational basis.

"The Prime Minister has cleared his (Panagariya’s) name so formal order for his appointment is likely to be issued next week," a top official from the prime minister's office told The Hindustan Times on Friday. The remaining members are expected to be announced later.

Opposition parties have criticised the formation of Niti Aayog as “fluff” and “gimmickry”. CPI(M) leader Sitaram Yechury described the new institution as an example of the government’s “aniti and durniti (no policy and bad policy)”.

- Karan Singh

To Learn More:

PM chooses Arvind Panagariya for Niti Ayog post (by Mahesh Langa, Hindustan Times)

Niti Aayog: Arvind Panagariya slated to be Vice Chairman of new Think Tank (Economic Times)

NITI Aayog replaces Planning Commission; Prime Minister Narendra Modi says it will benefit every individual (Indian Express)

NITI Aayog to be headed by PM, will include CMs (Hindustan Times)