Previous Year Question

The correct answer is the National Development Council (NDC). Under India's then-existing planning framework, the NDC served as an important forum for coordination and consultation among the Centre, State Governments and the Planning Commission. Government records relating to the First Five Year Plan state that the National Development Council was intended to strengthen coordination of policies between the Centre and the States.

The principal objectives of the NDC were to mobilise national effort and resources in support of the Plan, promote common economic policies in important fields, and ensure balanced and rapid development of all parts of the country. Its functions included periodically reviewing the National Plan, considering major social and economic policy questions affecting national development, and recommending measures for achieving Plan targets.

It performed a coordinating role particularly because the Prime Minister, Chief Ministers of the States and members of the Planning Commission came together on a common platform. Official Planning Commission material also records that the Commission consulted Central Ministries and State Governments in Plan formulation and coordinated with them through the National Development Council.

Why is the Finance Commission not the answer? The Finance Commission is primarily concerned with tax devolution and financial transfers between the Union and the States; it was not the general policy-coordination body between the Planning Commission and State Governments for Five Year Plans. Similarly, the National Integration Council dealt principally with national integration and communal/social harmony.

The current position is also useful to understand. This question reflects the planning framework existing in 2012. The Planning Commission was replaced by NITI Aayog in 2015. In the present framework, NITI Aayog's Governing Council, comprising the Prime Minister and Chief Ministers of States and relevant Union Territories, provides a common platform for cooperative federalism and Centre-State policy coordination.

Thus, for this Question —

Planning Commission + State Governments → National Development Council