The correct answer is option 'C': Planning Commission.

Explanation:

The NITI Aayog, also known as the National Institution for Transforming India, was established on January 1, 2015, replacing the Planning Commission of India. The Planning Commission was a government agency responsible for formulating five-year plans and allocating funds for various sectors of the economy.

The NITI Aayog was formed with the aim of fostering cooperative federalism and providing a platform for states to actively participate in the economic planning and decision-making process. It is a policy think tank that provides strategic and technical advice to the central and state governments on various policy matters.

Here is a breakdown of the roles and functions of both the Planning Commission and the NITI Aayog:

1. Planning Commission:
- Formulated five-year plans: The Planning Commission was responsible for formulating five-year plans that outlined the economic and social development goals of the country.
- Allocation of funds: It allocated funds to various sectors of the economy based on the priorities outlined in the five-year plans.
- Centralized planning: The Planning Commission followed a centralized planning approach, where the central government played a dominant role in decision-making and resource allocation.

2. NITI Aayog:
- Strategic and technical advice: The NITI Aayog provides strategic and technical advice to the central and state governments on various policy matters.
- Cooperative federalism: It aims to foster cooperative federalism by involving states in the decision-making process and promoting competitive and cooperative federalism.
- Outcome-oriented approach: The NITI Aayog focuses on outcomes rather than inputs, emphasizing the need for effective implementation and monitoring of policies and programs.
- Participatory approach: It encourages participation from various stakeholders, including experts, industry representatives, and civil society organizations, to ensure inclusive and sustainable development.

In conclusion, the NITI Aayog replaced the Planning Commission to bring about a more participatory, outcome-oriented, and decentralized approach to economic planning and policy-making in India.