Issue in economy now that can be handled by NITI Aayog:

• There is horizontal and vertical imbalance revenues of centre and states. Vertical Imbalance mainly allocates more money to Centre.
• Horizonal imbalance involves two types of imbalances.
• Type I is to do with the adequate provision of basic public goods and services, while the second,
• Type II, is due to growth accelerating infrastructure or the transformational capital deficits.
• We need another institution to tackle the horizontal imbalance of the Type II; for this the NITI Aayog is the most appropriate institution.
• NITI Aayog should be engaged with the allocation of “transformational” capital in a formulaic manner, complete with incentive• compatible conditionalities.
• NITI Aayog should also mandated to create an independent evaluation office which will monitor and evaluate the efficacy of utilisation of grants.

Features of NITI Aayog:

• Not Constitutional Body nor statutory body
• NITI Aayog is essentially an advisory body that seeks to provide critical directional and strategic inputs across spectrum of key elements of policy to the centre as well as states.
• It also seeks to put an end to the slow and tardy implementation of the policy by fostering inter-ministry, inter-state and centre-state coordination.
• It has been envisaged to follow the bottom-top development approach.

Composition of NITI Aayog:

• Chairperson -Prime Minister Governing Council –
• Its members are Chief Ministers and Administrators of the Union Territories Regional Councils. These would be created as per need and its members would be chief ministers and administrators of UTs of respective regions. Vice-Chairperson.
• The Vice-chairperson of the NITI Aayog will be appointed by Prime Minister.