GST Council, NITI Aayog, Planning Commission & NDC

Three landmark institutions shaping India's fiscal and development architecture — the GST Council (constitutional body under Art.279A), NITI Aayog (executive think-tank replacing the Planning Commission), and the now-dormant NDC. Master cooperative federalism, voting weights, SC rulings, and the historical evolution from centralised planning to collaborative governance for GS-II.

UPSC Prelims · Mains GS-II Laxmikanth Ch. 34, 56 ~22 min read Art. 279A · 101st Amendment 2016 Mohit Minerals SC 2022

Conceptual Clarity
GST Council — Art.279A
Composition & Voting
Functions & GST Structure
GST Voting Diagram
GST Rate Slabs Diagram
NITI Aayog
Planning Commission (1950–2014)
National Development Council
Planning Commission vs NITI Aayog
Comparison Diagram
Fiscal Bodies Quick Table
Prelims PYQs
Mains PYQs
Revision Box — UPSC Traps

Conceptual Clarity — Cooperative Federalism & Fiscal Bodies

India's fiscal governance rests on three distinct pillars, each with a different legal basis and mandate:

GST Council (Art.279A): A constitutional body — India's first joint decision-making forum between Centre and States for indirect tax. Created by the 101st Constitutional Amendment, 2016.
NITI Aayog: An executive body (Cabinet Resolution, 2015) — a policy think-tank. It advises but does NOT allocate funds. Replaced the Planning Commission.
Planning Commission (1950–2014): Also an executive body — but it allocated resources through Five Year Plans and was often called a parallel power centre. Abolished December 2014.
NDC: Executive body (Cabinet Resolution, 1952) — approved Five Year Plans; effectively dormant since NITI Aayog replaced the Planning Commission.

The key distinction for UPSC: GST Council = constitutional; Finance Commission = constitutional (Art.280); NITI Aayog = executive/non-constitutional; Planning Commission = executive/non-constitutional.

1. GST Council — Article 279A

1.1 Constitutional Basis

The GST Council was created by the 101st Constitutional Amendment Act, 2016, which inserted Article 279A into the Constitution. It came into force on 12 September 2016. This made the GST Council a constitutional body — one of the very few joint forums of Centre and States with constitutional status.

Why Constitutional? Unlike NITI Aayog or the Planning Commission (mere Cabinet Resolutions), inserting GST Council in the Constitution gives it permanence, legitimacy, and ensures states cannot be bypassed in GST decisions. It is a product of genuine federal negotiation — the Amendment required ratification by at least half the state legislatures.

1.2 Background — Why GST?

Pre-GST India had a fractured indirect tax system: Central Excise Duty, Service Tax, VAT (state-level), CST (inter-state), Entry Tax, Octroi — creating a "tax on tax" (cascading effect).
GST replaced most of these with a unified Goods and Services Tax under the principle of "One Nation One Tax."
GST was introduced on 1 July 2017 (midnight launch — "Goods and Simple Tax" speech in Parliament).
Constitutional basis: Arts. 246A (power to levy GST), 269A (IGST on inter-state trade), 279A (GST Council).

2. GST Council — Composition & Voting

2.1 Composition (Art. 279A(2))

The GST Council is a joint forum of the Centre and States. Total members: approximately 33.

Member	Role
Union Finance Minister	Chairperson of the GST Council
Union Minister of State in charge of Finance/Revenue	Member
Finance Minister of each State / UT with legislature	Members (28 states + 3 UTs with legislature = 31 members)

States/UTs with legislature: Jammu & Kashmir, Delhi, and Puducherry have their own legislatures. States may nominate any Minister in charge of Finance or Taxation as their representative.

2.2 Voting (Art. 279A(6)) — Most Tested

Every decision of the GST Council requires a three-fourths (3/4) majority of the weighted votes of members present and voting.
Centre's vote = 1/3 of total votes cast.
All States combined = 2/3 of total votes cast.
Each State has an equal vote — a small state like Goa has the same weight as Maharashtra within the 2/3 States' share.
Quorum: 50% of total members must be present.

UPSC Trap: Centre = 1/3 weight, NOT 1/2. States together = 2/3, NOT 1/2. This asymmetry ensures states collectively have more weighted votes than the Centre. But the 3/4 threshold means both Centre and a significant number of states must agree — the Centre effectively has a veto since losing 1/4 of votes blocks any decision, and the Centre alone holds 1/3.

2.3 GST Council Secretariat

Headquartered in New Delhi.
Secretary to GST Council: a senior IRS/IAS officer.
Has a permanent secretariat to assist the Council's functioning.

3. Functions of GST Council & GST Structure

3.1 Functions (Art. 279A(4))

The GST Council shall make recommendations to the Union and States on:

Taxes, cesses, surcharges to be subsumed under GST.
Goods and services that may be exempted from GST.
Model GST laws, principles of levy, apportionment of IGST.
GST rate slabs including floor rates with bands.
Special rates for a limited period to raise revenue during calamities or disasters.
Special provisions for the North-East states, J&K, Himachal Pradesh, and Uttarakhand (hilly/special category states).
Threshold limits below which goods/services may be exempt from GST.

3.2 Dual GST Structure

Component	Levied by	Applicable to
CGST (Central GST)	Central Government	Intra-state supply of goods/services — Centre's share
SGST (State GST)	State Government	Intra-state supply of goods/services — State's share
IGST (Integrated GST)	Central Government (Art. 269A)	Inter-state supply & imports; apportioned between Centre and states
UTGST (Union Territory GST)	Central Government	UTs without legislature (Chandigarh, Dadra, etc.)

3.3 GST Rate Slabs

Rate	Category	Examples
0%	Essential goods / nil rated	Fresh fruits, vegetables, milk, unprocessed food grains, eggs, salt
5%	Common use goods	Edible oils, sugar, tea, coffee, domestic LPG, medicines
12%	Standard rate (lower)	Processed foods, frozen meat, butter, ghee, mobile phones
18%	Standard rate	Capital goods, industrial intermediaries, hair care products, soaps
28%	Luxury / demerit goods	Luxury cars, tobacco, aerated drinks, pan masala
28% + Cess	Sin/demerit goods (Compensation Cess)	Cigarettes, luxury motor vehicles, aerated drinks (extra cess)

3.4 Items Outside GST

The following items were kept outside GST (for political/economic reasons):

Petroleum products (crude oil, petrol, diesel, ATF, natural gas) — bring them into GST requires Council recommendation.
Alcohol for human consumption — remains under state VAT/excise.
Electricity — separate state legislation.
Real estate (partly) — under-construction property brought under GST; completed properties (stamp duty) remain outside.

3.5 GST Compensation to States

States were guaranteed compensation for revenue loss arising from GST implementation for 5 years (2017–2022), assuming 14% annual revenue growth.
Compensation funded by a Compensation Cess on luxury and demerit goods.
GST compensation period ended June 2022.
During COVID years (2020–22), Centre borrowed to pay compensation, creating controversy about states' revenue security.

3.6 Landmark Case — Union of India v. Mohit Minerals (2022)

Supreme Court (9-Judge Bench), 2022 — Mohit Minerals: The SC held that recommendations of the GST Council are NOT binding on the Union and States — they are only persuasive in nature. Both Parliament and State Legislatures retain the power to legislate on GST. The SC upheld the federal character of India and ruled that the Council is a "recommendatory body." This is a landmark judgment on cooperative federalism.

Why this matters for UPSC: Before this judgment, there was ambiguity about whether Council recommendations were binding. Now it is settled law — recommendations are persuasive only. Both Centre and States can deviate, though political convention ensures they follow Council decisions.

4. Diagram A — GST Council Voting Structure

Diagram A — GST Council voting weights: Centre (1/3) vs States combined (2/3); 3/4 majority required; quorum 50%; ~33 members total.

5. Diagram B — GST Rate Slabs

Diagram B — India's GST rate structure: six slabs from 0% (essentials) to 28%+cess (sin goods). Petroleum, alcohol, and electricity remain outside GST.

6. NITI Aayog

6.1 Establishment & Nature

Established on 1 January 2015 by a Cabinet Resolution (executive order — NOT constitutional, NOT statutory).
Full form: National Institution for Transforming India.
Replaced the Planning Commission, which was abolished in December 2014.
Nature: Government think-tank and policy advisory body — purely advisory, does NOT allocate funds.

Critical UPSC Point: NITI Aayog does NOT allocate funds or resources to states. This is a fundamental difference from the Planning Commission, which used to recommend resource allocation for Five Year Plans. Fund allocation is now done by the Finance Ministry and Finance Commission.

6.2 Composition

Position	Details
Chairperson	Prime Minister of India (ex-officio)
Vice-Chairperson	Appointed by PM; equivalent in rank to Cabinet Minister; handles day-to-day work
Governing Council	Chief Ministers of all States + Lieutenant Governors of all UTs (with or without legislature)
Full-time Members	Up to 4 — domain experts/specialists
Part-time Members	Up to 2 — rotating members from leading universities/research bodies
Ex-officio Members	Up to 4 Cabinet Ministers nominated by PM
CEO	Appointed by PM; Secretary-level officer; manages day-to-day administration
Special Invitees	Experts with domain knowledge as required

Governing Council vs NDC: The Governing Council of NITI Aayog includes CMs of all states and LGs of all UTs — this effectively replaced the National Development Council (NDC), which included CMs of states but not all UTs. The Governing Council has broader representation.

6.3 Functions of NITI Aayog

Cooperative Federalism: Bottom-up approach — fostering involvement of states as equal partners in national development (contrast with Planning Commission's top-down approach).
Vision & Strategy Documents: Prepared "Strategy for New India @75" (2018), Vision 2030, and Viksit Bharat 2047 (India as developed nation by 100th independence anniversary).
Aspirational Districts Programme (ADP): Launched 2018 — focused on 112 most backward districts across India; convergence of central schemes for rapid transformation.
SDG India Index: Annual ranking of states and UTs on Sustainable Development Goals (SDGs) — promotes competitive federalism.
Atal Innovation Mission (AIM): Promotes innovation ecosystem — Atal Tinkering Labs in schools, Atal Incubation Centres.
Research & Policy Advisory: Provides recommendations on economic policy, governance reforms, agriculture, health, education, technology.
Monitoring & Evaluation: Tracks implementation of key government schemes and programs.
NITI Lectures / Transforming India: Knowledge-sharing platform.

6.4 Key Initiatives

Viksit Bharat 2047

NITI Aayog is the nodal body coordinating India's long-term vision document to make India a developed nation by 2047 (centenary of independence). Covers economy, health, education, sustainability.

Aspirational Districts

112 districts identified as most under-developed. Multi-sector intervention: health, nutrition, education, agriculture, financial inclusion. Monthly ranking published to incentivise competition among districts.

SDG India Index

Annually measures state/UT progress on 17 SDGs. Promotes competition among states. States classified as: Achiever, Front Runner, Performer, Aspirant.

Atal Innovation Mission

Promotes innovation culture: Atal Tinkering Labs (10,000+ schools), Atal Incubation Centres (ABIs), Atal Community Innovation Centres in Tier-2/3 cities.

7. Planning Commission (1950–2014)

7.1 Establishment

Established on 15 March 1950 by a Cabinet Resolution (NOT constitutional, NOT statutory — a purely executive body).
Inspired by the Soviet model of centralised economic planning.
PM was the ex-officio Chairman; Deputy Chairman was the effective head (often a Cabinet-rank minister).
Notable Deputy Chairmen: Jawaharlal Nehru (himself, early years), Gulzarilal Nanda, C. Subramaniam, P.C. Mahalanobis (statistical adviser), Pranab Mukherjee, Montek Singh Ahluwalia (longest-serving, 2004–2014).

7.2 Five Year Plans

Plan	Period	Focus
1st FYP	1951–56	Agriculture, rehabilitation from Partition
2nd FYP	1956–61	Heavy industry (Mahalanobis model)
3rd FYP	1961–66	Self-reliance; disrupted by wars (1962, 1965)
Plan Holiday	1966–69	Three Annual Plans during economic crisis
4th FYP	1969–74	Growth with stability, self-reliance
5th FYP	1974–79	Poverty removal (Garibi Hatao), self-reliance
6th FYP	1980–85	Poverty alleviation, infrastructure
7th FYP	1985–90	Modernisation, social justice, productivity
Annual Plans	1990–92	Economic crisis, 8th FYP delayed
8th FYP	1992–97	Liberalisation, human development
9th FYP	1997–2002	Growth with equity and social justice
10th FYP	2002–07	8% annual growth; Monitorable Targets
11th FYP	2007–12	Inclusive growth; Bharat Nirman
12th FYP	2012–17	Faster, More Inclusive and Sustainable Growth — THE LAST PLAN

Last Five Year Plan: The 12th Five Year Plan (2012–17) was the last. After it expired, NITI Aayog (which replaced Planning Commission in 2015) shifted to a new planning framework — 3-year Action Agenda, 7-year Medium-Term Strategy, and 15-year Vision Document — rather than Five Year Plans.

7.3 Functions of Planning Commission

Formulate Five Year Plans — allocate resources among sectors.
Appraise progress of plans and recommend adjustments.
Define stages of plan implementation; determine priorities.
Recommend resource allocation to states (through Plan funds).
Coordinate functions of other Ministries and departments.

7.4 Criticism of Planning Commission

Top-down, centralised: States had little say; plans were often technocratic exercises by Delhi-based economists.
Parallel power centre: Called a "super-Cabinet" — Deputy Chairman wielded enormous power without constitutional accountability.
Ignored states' priorities: Tied plan funds to centrally dictated schemes, reducing state flexibility.
Outdated model: Five Year Plans modelled on Soviet planning — incompatible with a liberalised market economy (post-1991).
Fiscal federalism concerns: States felt discriminated in plan allocation; clamoured for more untied funds.

7.5 Abolition

The Planning Commission was abolished in December 2014 by an executive order of the Government of India. It was replaced by NITI Aayog from 1 January 2015. The abolition required no constitutional amendment since the Commission was never a constitutional body.

8. National Development Council (NDC)

8.1 Establishment

Established on 6 August 1952 by a Cabinet Resolution.
NOT constitutional, NOT statutory — a purely executive body like the Planning Commission.
Also known as Rashtriya Vikas Parishad.

8.2 Composition

Prime Minister (Chair)
Chief Ministers of all States
Members of the Planning Commission
Ministers of the Union Cabinet (where relevant)

8.3 Functions

To approve the Five Year Plans formulated by the Planning Commission before they are finalised.
To prescribe guidelines for the formulation of national plans.
To consider important questions of social and economic policy affecting national development.
To review the working of the national plan from time to time.
To recommend measures for achieving the aims and targets of the national plan.

NDC's role in federal consensus: The NDC was the broadest platform for Centre-State dialogue on development planning — all CMs participated. In a sense, it was a forerunner of "cooperative federalism" before the term became popular. The NDC approved all Twelve Five Year Plans.

8.4 Current Status — Dormant, NOT Abolished

UPSC Trap: The NDC has NOT been formally abolished. It is simply dormant — since the Planning Commission was abolished and Five Year Plans discontinued, the NDC has no functional role. The last NDC meeting was held on 27 December 2012. NITI Aayog's Governing Council (all CMs + LGs of UTs) effectively performs the consultative role the NDC used to perform. But the NDC remains on paper as a body established by Cabinet Resolution, which has never been rescinded.

9. Planning Commission vs NITI Aayog — Comprehensive Comparison

Feature	Planning Commission	NITI Aayog
Statutory Basis	Cabinet Resolution (15 March 1950) — NOT constitutional/statutory	Cabinet Resolution (1 January 2015) — NOT constitutional/statutory
Role	Central planner — formulated Five Year Plans; allocated resources; monitored implementation	Policy think-tank and advisory body — provides strategies, recommendations, knowledge
Fund Allocation	YES — recommended and allocated Plan funds to Ministries and States	NO — does NOT allocate funds; purely advisory
Five Year Plans	Formulated all 12 Five Year Plans (1951–2017)	No Five Year Plans; replaced with 3/7/15-year frameworks (Action Agenda, Strategy, Vision)
State Relationship	Top-down; states received plan funds based on formulae; states were implementers, not partners	Bottom-up; "cooperative federalism" — states are equal partners; Governing Council includes all CMs
Key Official	Deputy Chairman (effective head, often Cabinet-rank) — Montek Singh Ahluwalia was longest-serving	Vice-Chairperson (appointed by PM); CEO manages administration
Abolition / Creation Year	Created 1950; abolished December 2014	Created 1 January 2015; still in existence
Nature / Approach	Centralised; based on Soviet planning model; technocratic; "one size fits all"	Decentralised; market-friendly; technology-driven; competitive federalism; SDG-aligned

10. Diagram C — Planning Commission vs NITI Aayog

Diagram C — Planning Commission (1950–2014) vs NITI Aayog (2015–present): statutory basis, fund allocation, five year plans, state relationship, and key role.

11. Key Fiscal Bodies — Quick Comparison

Feature	Finance Commission	NITI Aayog	GST Council
Legal Basis	Constitutional — Art. 280	Executive (Cabinet Resolution, 2015)	Constitutional — Art. 279A (101st Amendment)
Nature	Quasi-judicial, statutory; set up every 5 years	Permanent executive think-tank; advisory	Permanent constitutional body; joint forum
Role	Recommend devolution of taxes + grants-in-aid from Centre to States	Policy advisory, vision documents, SDG Index, AIM	Recommend GST rates, laws, exemptions, slabs
Binding on Govt?	Recommendations normally accepted by convention (not legally binding on Parliament)	NOT binding — purely advisory	NOT binding — persuasive only (Mohit Minerals 2022)
Chairperson	Appointed by President; independent expert	Prime Minister (ex-officio)	Union Finance Minister
State Role	States submit memoranda; no formal voting role	CMs in Governing Council; consultative role	State Finance Ministers = full voting members with 2/3 weight
Current (16th)	16th Finance Commission (2026–31) — Dr. Arvind Panagariya (Chair)	Established 2015; ongoing	Established 2016; ongoing

Mains Angle — Cooperative Federalism: The GST Council is the best example of India's experiment in cooperative federalism — Centre and States sitting together with formal voting rights. Finance Commission and NITI Aayog are Centre-driven bodies where states have consultative (not decision-making) roles. GST Council is unique because states can outvote the Centre (2/3 vs 1/3) in principle, though the 3/4 majority threshold ensures practical consensus-seeking.

12. Prelims PYQs (2016–2024)

Prelims 2018

Q1. Article 279A was inserted into the Constitution of India by which Constitutional Amendment Act?
Answer: 101st Constitutional Amendment Act, 2016 — not 100th, not 99th. It inserted Arts. 246A, 269A, and 279A relating to GST.

Prelims 2019

Q2. In the GST Council, what is the weighted vote share of the Central Government?
Answer: One-third (1/3) of total weighted votes cast — States collectively hold 2/3. Decisions require 3/4 majority. This is specified in Art. 279A(6).

Prelims 2017

Q3. NITI Aayog was established by which of the following?
Answer: Cabinet Resolution dated 1 January 2015 — NOT by an Act of Parliament, NOT by constitutional amendment. It is an executive body with no statutory status.

Prelims 2023

Q4. With reference to the Supreme Court judgment in Union of India v. Mohit Minerals (2022), which statement is correct regarding GST Council recommendations?
Answer: GST Council recommendations are NOT binding on the Union or States — they are only persuasive in nature. Both Parliament and State Legislatures retain legislative competence on GST matters.

Prelims 2020

Q5. Which was the last Five Year Plan in India?
Answer: The 12th Five Year Plan (2012–17) was the last. The Planning Commission was abolished in December 2014 and NITI Aayog replaced Five Year Plans with a 3/7/15-year planning framework.

Prelims 2022

Q6. In which year was the National Development Council (NDC) established?
Answer: 1952 (6 August 1952) — by Cabinet Resolution. NOT 1950 (that was the Planning Commission). NDC is not formally abolished but has been dormant since NITI Aayog replaced the Planning Commission.

Prelims 2021

Q7. NITI Aayog's Governing Council includes which of the following?
Answer: Chief Ministers of all States AND Lieutenant Governors of all Union Territories (including UTs without legislature). This makes it broader than the old NDC, which included CMs of states only.

Prelims 2024

With reference to the Goods and Services Tax (GST) Council, consider the following statements:
1. It is a constitutional body established under Article 279A of the Constitution.
2. The Union Finance Minister is the Chairperson of the GST Council.
3. Every decision of the GST Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting.
Which of the statements given above are correct?
Answer: All three statements are correct. Statement 1 — Art. 279A inserted by 101st Amendment 2016. Statement 2 — Art. 279A(2): Union Finance Minister is Chairperson. Statement 3 — Art. 279A(9): decisions require 3/4 weighted majority; Centre has 1/3 weight, all States together have 2/3 weight.

13. Mains PYQs

Mains GS-II 2019

"GST Council is a unique experiment in cooperative federalism." Examine its structure and functioning. (250 words)

Approach: Define cooperative federalism; explain Art.279A — constitutional basis, composition (33 members, Finance Ministers), voting (Centre 1/3, States 2/3, 3/4 majority); functions (recommend rates, laws, exemptions, special provisions for NE states); assess functioning — consensus-based decision-making, 50+ meetings, rate rationalisation, compensation cess controversy; unique features — joint forum, weighted voting unlike any other Indian body; critique — Centre's effective veto through 1/3 weight exceeding 1/4 blocking threshold; Mohit Minerals 2022 (recommendations not binding); conclusion — imperfect but innovative federal experiment.

Mains GS-II 2018

Compare Planning Commission and NITI Aayog. Has the shift improved development planning in India? (250 words)

Approach: Table-style comparison — statutory basis (both Cabinet Resolutions), fund allocation (PC: yes; NITI: no), Five Year Plans (PC: 12 plans; NITI: discontinued), state relationship (top-down vs bottom-up/cooperative federalism); reasons for abolition of PC — parallel power centre, outdated Soviet model, ignored states; NITI improvements — broader consultation via Governing Council, Aspirational Districts, SDG Index, Atal Innovation Mission; critiques of NITI — no fund power = less leverage, advisory role may be ignored, no constitutional teeth; conclusion — paradigm shift from planning to policy advisory is positive but NITI needs stronger mandate to influence fund allocation effectively.

Mains GS-II 2022

Are GST Council recommendations binding on states? Discuss with reference to the Supreme Court judgment in Mohit Minerals case. (150 words)

Approach: Brief background — Art.279A, GST as cooperative federalism experiment; pre-2022 ambiguity (Art.246A gives Parliament and State Legislatures concurrent GST powers; question was whether Council recommendations override this); SC ruling in Union of India v. Mohit Minerals (2022) — 9-judge bench; held: recommendations persuasive, NOT binding; Parliament and State Legislatures retain independent competence; GST Council is recommendatory body; federal principle intact; implication — states can deviate from Council recommendations in their own legislation; Centre similarly not bound; practical effect — convention of following recommendations continues but legally no compulsion; significance for federalism — reaffirms cooperative rather than coercive federalism.

Mains GS-II 2021

Critically assess NITI Aayog's role in cooperative federalism since 2015. (250 words)

Approach: Context — NITI Aayog replaced Planning Commission to shift to "cooperative federalism"; Governing Council includes all CMs (unlike old NDC); Bottom-up approach (states' inputs in national strategy); Positive contributions: Aspirational Districts (112 districts), SDG India Index (competitive federalism), Viksit Bharat 2047 vision, Atal Innovation Mission; Critiques: No fund allocation power — states cannot be incentivised; recommendations non-binding; Finance Commission and Finance Ministry still control actual transfers; NITI has no constitutional backing — can be dissolved by Cabinet tomorrow; Governing Council met only 7–8 times in 8 years (low frequency vs NDC); North-East and smaller states feel marginalised; structural reforms needed — give NITI statutory basis, empower it to monitor Central scheme implementation with enforceable recommendations; conclusion — promising but underutilised; cooperative federalism requires more than consultative forums.

Mains GS-II 2024

"The GST compensation cess dispute between the Union and the States during COVID-19 exposed fundamental tensions in India's cooperative fiscal federalism. Examine the constitutional and political dimensions of this dispute and its long-term implications." (250 words)

Approach: Background — GST (101st Amendment 2016) promised states revenue-neutral compensation for 5 years (2017–22) for any revenue loss below 14% annual growth baseline; COVID caused massive revenue shortfall; Centre argued "act of God" to limit liability; states (especially opposition-ruled) demanded full compensation; constitutional angle — Art. 279A(9) GST Council recommendations; compensation cess is not part of divisible pool; borrowing option (Centre facilitated back-to-back loans to states in lieu of compensation) debated; Mohit Minerals 2022 — Council recommendations persuasive not binding; long-term implications: compensation cess extended beyond 2022 to repay loans; states' fiscal autonomy constrained; trust deficit in Centre-state fiscal relations; demand for permanent revenue certainty mechanism; 16th Finance Commission mandate to review GST devolution; structural lesson — cooperative federalism requires enforceable commitments, not just consultative forums; reforms: statutory compensation guarantee, independent GST dispute resolution body, stronger role for Rajya Sabha in GST disputes.

14. Revision Box — 4 UPSC Traps

Must-Remember — GST Council, NITI Aayog, Planning Commission & NDC

GST Council Key Facts:

Art. 279A — inserted by 101st Amendment 2016; in force 12 Sept 2016
Constitutional body — joint forum Centre + States
~33 members; Chair = Union Finance Minister
Centre weight = 1/3; States = 2/3
Decision threshold = 3/4 majority; Quorum = 50%
Recommendations = NOT binding (Mohit Minerals 2022)
GST compensation to states: 5 years (ended June 2022)
Outside GST: petroleum, alcohol, electricity

NITI Aayog Key Facts:

Established 1 January 2015 — Cabinet Resolution
Full form: National Institution for Transforming India
PM = Chair; Vice-Chairperson = day-to-day head
Governing Council = all CMs + LGs of all UTs
NO fund allocation power — purely advisory
Key programmes: Aspirational Districts (112), SDG Index, AIM, Viksit Bharat 2047

Planning Commission Key Facts:

Established 15 March 1950 — Cabinet Resolution
PM = Chairman; Deputy Chairman = effective head
12 Five Year Plans (1st: 1951–56; 12th/Last: 2012–17)
Abolished December 2014 — executive order (no constitutional amendment needed)
Criticism: top-down, parallel power centre, ignored states

NDC Key Facts:

Established 6 August 1952 — Cabinet Resolution
Composition: PM + CMs + Planning Commission members
Approved Five Year Plans; reviewed implementation
Status: Dormant — NOT formally abolished
NITI Aayog's Governing Council replaced its functional role

Key Cases:

Union of India v. Mohit Minerals (SC 2022): GST Council recommendations NOT binding on states — only persuasive

4 Critical UPSC Traps:

NITI Aayog has NO fund allocation power — it is purely advisory/think-tank. Fund allocation is done by the Finance Ministry and as recommended by the Finance Commission. Confusing NITI Aayog with Planning Commission on this point is a very common mistake.
GST Council recommendations are NOT binding on states — the Supreme Court in Union of India v. Mohit Minerals (2022) settled this: recommendations are persuasive only; Parliament and State Legislatures retain independent GST legislative power under Arts. 246A.
NDC has NOT been formally abolished — it is dormant/inactive. The Cabinet Resolution establishing the NDC has never been rescinded. NITI Aayog's Governing Council effectively replaced NDC's consultative role, but the NDC legally still exists as an institution.
Planning Commission was abolished by executive order (December 2014) — NOT by constitutional amendment. Since it was created by Cabinet Resolution (not the Constitution), it could be abolished by the same means. No Parliamentary legislation or constitutional amendment was required.

Item	Detail
GST Council Article	Art. 279A
Amendment	101st CA Act, 2016
GST Council in force	12 September 2016
Centre vote weight	1/3
States vote weight	2/3 combined
Decision majority	3/4 weighted votes
Quorum	50% of members
GST launch date	1 July 2017
NITI Aayog est.	1 January 2015
Planning Comm. est.	15 March 1950
Planning Comm. abolished	December 2014
Last Five Year Plan	12th (2012–17)
NDC est.	6 August 1952
NDC status	Dormant (not abolished)
Mohit Minerals judgment	SC 2022 (9-judge bench)

Rate	Category
0%	Essentials (food grains)
5%	Common use (oils, tea)
12%	Processed food, mobiles
18%	Standard (most services)
28%	Luxury / demerit goods
28%+Cess	Sin goods (tobacco, cars)

Body	Basis
GST Council	Constitutional (Art.279A)
Finance Commission	Constitutional (Art.280)
NITI Aayog	Executive (Cabinet Resolution)
Planning Commission	Executive (abolished)
NDC	Executive (dormant)

GST Council, NITI Aayog, Planning Commission & NDC

On this page

Conceptual Clarity — Cooperative Federalism & Fiscal Bodies

1. GST Council — Article 279A

1.1 Constitutional Basis

1.2 Background — Why GST?

2. GST Council — Composition & Voting

2.1 Composition (Art. 279A(2))

2.2 Voting (Art. 279A(6)) — Most Tested

2.3 GST Council Secretariat

3. Functions of GST Council & GST Structure

3.1 Functions (Art. 279A(4))

3.2 Dual GST Structure

3.3 GST Rate Slabs

3.4 Items Outside GST

3.5 GST Compensation to States

3.6 Landmark Case — Union of India v. Mohit Minerals (2022)

4. Diagram A — GST Council Voting Structure

5. Diagram B — GST Rate Slabs

6. NITI Aayog

6.1 Establishment & Nature

6.2 Composition

6.3 Functions of NITI Aayog

6.4 Key Initiatives

Viksit Bharat 2047

Aspirational Districts

SDG India Index

Atal Innovation Mission

7. Planning Commission (1950–2014)

7.1 Establishment

7.2 Five Year Plans

7.3 Functions of Planning Commission

7.4 Criticism of Planning Commission

7.5 Abolition

8. National Development Council (NDC)

8.1 Establishment

8.2 Composition

8.3 Functions

8.4 Current Status — Dormant, NOT Abolished

9. Planning Commission vs NITI Aayog — Comprehensive Comparison

10. Diagram C — Planning Commission vs NITI Aayog

11. Key Fiscal Bodies — Quick Comparison

12. Prelims PYQs (2016–2024)

13. Mains PYQs

14. Revision Box — 4 UPSC Traps

Must-Remember — GST Council, NITI Aayog, Planning Commission & NDC