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The Narendra Modi government on Thursday unveiled the concept of a Niti Aayog, based on the principle of cooperative federalism, to replace the Planning Commission, just a day before public sector bank chiefs met in Pune to discuss the future of the financial sector.

The official statement on the Niti Aayog says the traditional one-way flow of policy between New Delhi and the states should be replaced by a partnership. One signal that Modi is serious about this is to house the new institution outside the capital. We have earlier endorsed the suggestion that other bodies such as the National Development Council should meet in different state capitals by rotation.

B.R. Ambedkar once suggested that a country as large as India needs a second capital. That may be impossible. But more national institutions need to be housed outside New Delhi if new ideas are to flourish. Holding the banking meeting in Pune is a small example of what is possible.

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