Modi replaces Planning Commission, aiming to boost growth

NEW DELHI (Reuters) - India has scrapped its 65-year-old Planning Commission, which Prime Minister Narendra Modi has accused of stifling growth with Soviet-style bureaucracy, replacing it on Thursday with a body he said would do more to involve the regions.

The new National Institution for Transforming India (NITI) will act more like a think tank or forum, say its supporters, in contrast with the Commission which imposed five-year-plans and allocated resources to hit set economic targets.

Despite being widely blamed for the slow growth that long plagued India, the Commission survived the market reforms of the early 1990s, riling Modi with its interventions when he was the chief minister of the fast-growing state of Gujarat.

In a series of messages to his 9.1 million followers on Twitter, Modi said the body would replace the old one-size-fits-all approach with a "pro-people, pro-active & participative development agenda".

Modi, elected by a landslide last year on a promise to revive flagging growth and create jobs, had vowed to do away with the Planning Commission that was set up in 1950 by India's first prime minister Jawaharlal Nehru.

But his plans were criticised by the opposition Congress party, which wants to defend Nehru's legacy and regards Modi's vision of "cooperative federalism" as cover for a veiled power grab.

NITI will include leaders of India's 29 states and seven union territories. But its full-time staff - its deputy chairman, chief executive and experts - will answer directly to the 64-year-old prime minister.

Congress leaders mocked the launch as a cosmetic relabelling exercise - the new body's acronym-based name means 'Policy Commission' in Hindi, suggesting a less bold departure than the English version does.

Despite winning the biggest Lok Sabha mandate in three decades last May, Modi lacks a majority in the upper house that represents the states, forcing him to compromise to pursue his development agenda.

Although he has won a series of state elections since sweeping to power in New Delhi last May, the gains will not show up until later in the Rajya Sabha, a third of whose members are replaced every two years.

(Reporting by Mayank Bhardwaj; Editing by Douglas Busvine and Andrew Heavens)