Paper II

Story hook

On 15 August 2014, from the ramparts of the Red Fort, the Prime Minister announced that the Planning Commission would be replaced. The sentence took under a minute. The institution it dissolved had been created by a Cabinet resolution of 15 March 1950, had drafted twelve Five Year Plans, had at various points decided how much money each state would get for irrigation, power and schools, and had been described by one of its own critics as a "parallel cabinet". It had never been mentioned in the Constitution. It had never been created by an Act of Parliament. And it was ended the same way it began — by an executive decision announced from a podium, with no vote taken anywhere.

That is the first thing this unit is really about, and candidates routinely miss it. Both the Planning Commission and its successor, NITI Aayog (Cabinet resolution, 1 January 2015), are creatures of executive fiat. Neither is constitutional. Neither is statutory. Which means the whole argument about whether India should plan, and who should decide the country's priorities, has for seventy-five years been settled by resolutions of the Union Cabinet rather than by law — a fact that Ashok Chanda flagged in Federalism in India (1965), that the Rajamannar Committee put at the centre of a state government's case in 1971, that the Sarkaria Commission returned to in 1988, and that the Punchhi Commission was still raising in 2010.

The second thing is the money. When Montek Singh Ahluwalia was Deputy Chairman, a Chief Minister who wanted a larger plan allocation came to Yojana Bhawan and argued for it, in a scheduled, minuted, annual meeting called the Annual Plan discussion. After 2015, there was nothing to argue about at Yojana Bhawan, because the discretionary plan grant had gone: the 14th Finance Commission (report December 2014) had raised states' share of the divisible pool from 32% to 42%, and what remained of central transfers moved to the Ministry of Finance and to centrally sponsored schemes. NITI Aayog got the think tank, the convening power and the dashboards; the Finance Ministry got the chequebook. Whether that is the decentralisation it was announced as, or a quieter centralisation of fiscal power inside North Block, is the live argument of this unit — and the one a Paper II examiner will ask you to take a position on.

The third thing is the half of the syllabus candidates skip. This unit's printed heading does not stop at NITI Aayog: it names the process of plan formulation at Union and State levels and the Constitutional Amendments of 1992 and decentralised planning. A chapter that talks only about Delhi answers about half the questions this unit can generate. Both halves are covered below.

Why this matters for UPSC

This unit sits in Paper II of the Public Administration optional and is one of the most reliably examined blocks in it: planning machinery, NITI Aayog and cooperative federalism recur across Paper II papers, in the familiar shape of one 20-mark analytical question plus a 10-mark short note, so budget roughly 20-40 marks to it. Treat that as a recurring pattern rather than a guarantee for any single year — this chapter deliberately does not claim a frequency it cannot evidence. The questions are almost never factual — UPSC does not ask "when was NITI Aayog created"; it asks whether a body without financial powers can deliver cooperative federalism, or whether the shift from planning to indicative strategy has weakened the state's developmental capacity. It also double-counts: the same material serves GS-II (federalism, statutory/non-statutory bodies, local government) and GS-III (planning, growth, inclusive development), so a candidate with this optional carries an advantage into the General Studies papers that almost no other Paper II unit gives them.