The Planning Commission was established by the government in 1950 to draught, develop, and implement India's five-year plans.

1. PLANNING IN INDIA
Dr. Shiva Manoj
Associate Professor ,LBS

2. ECONOMIC PLANNING IN INDIA – FIVE YEAR PLANS
• The term economic planning is used to describe the
long term plans of the government of India to
develop and coordinate the economy with efficient
utilization of resources. Economic planning in India
started after independence in the year 1950 when it
was deemed necessary for economic growth and
development of the nation.
• The Constitution came into force on 26 January
1950. Subsequently, Planning Commission was set up
on 15 March 1950 and the plan era started from 1
April 1951 with the launching of the First Five Year
Plan (1951-56).

3. From 1947 to 2017, the Indian economy was
premised on the concept of planning. This was
carried through the Five-Year Plans, developed,
executed, and monitored by the Planning
Commission (1951-2014) and the NITI Aayog
(2015-2017).

4. • Economic planning in India dates back to pre-
Independence period when leaders of the freedom
movement and prominent industrialists and academics
got together to discuss the future of India after
Independence which was soon to come. Noted civil
engineer and administrator M. Visvesvaraya is regarded
as a pioneer of economic planning in India. His book
“Planned Economy for India” published in 1934
suggested a ten year plan, with an outlay of Rs. 1000
crore and a planned increase of 600% in industrial
output per annum based on economic conditions of
the time.
• The idea of economic planning for five years was taken
from the Soviet Union under the socialist influence of
first Prime Minister Pt. Jawahar Lal Nehru.

5. Here are the major milestones related to
economic planning in India:
• Setting up of the Planning Commission: 15
March 1950
• First Five Year Plan: 9 July 1951
• Dissolution of the Planning Commission: 17
August 2014
• Setting up of NITI (National Institution for
Transforming India) Aayog: 1 January 2015

6. PLANNING COMMISSION OF INDIA
• Planning Commission of India was an organization in
the Government of India, which formulated India’s
Five-Year Plans, among other functions. The planning
commission was charged with the service of the
opportunities to all for employment in the service of
the community.
• The Planning Commission was reporting directly to the
Prime Minister of India. It was established on 15 March
1950, with Prime Minister Jawaharlal Nehru as the
chairman. The Planning Commission did not derive its
creation from either the Constitution or statute but
was an arm of the Central/Union Government.

7. PLANNING COMMISSION FUNCTIONS
• The 1950 resolution setting up the Planning Commission outlined its functions as
the following:
• Make an evaluation of the capital, material and the human resources of the nation,
including technical personnel, and study the possibilities of enhancing these
resources for building up the nation;
• Draft a Plan for the most balanced and effective usage of the country’s resources;
• Define the stages in which the Plan should be implemented and put forward the
allocation of resources for the completion of every stage;
• Specify the factors that hamper economic development, and ascertain the
conditions which, in view of the prevailing social and political situation, should be
set up for the triumphant implementation of the Plan
• Determine the kind of machinery required for obtaining the successful execution of
each stage of the Plan in all its aspects;
• Regularly appraise the progress achieved in the implementation of all stages of the
Plan and propose the rectifications or recommendations of policy and measures
that such appraisal may deem necessary;
• Make such interim or ancillary recommendations either for enabling the discharge
of the duties assigned to it or on a consideration of the existing economic
conditions, current policies, measures and development programme or on a study
of such specific problems which the Central or State Governments can refer to it.

8. COMPOSITION OF PLANNING COMMISSION
• The Prime Minister was the Chairman of the
Planning Commission, which used to work
under the overall guidance of the National
Development Council. The Deputy Chairman
and the full-time members of the
Commission, as a composite body, provided
advice and guidance to the subject Divisions
for the formulation of Five Year Plans, Annual
Plans, State Plans, Monitoring Plan
Programmes, Projects and Schemes.

9. Members of the Planning Commission:
• Chairman – Prime Minister; presided over the
meetings of the Commission
• Deputy Chairman – de facto executive head (full-
time functional head);
– Was responsible for the formulation and submission
of the draft Five-Year Plan to the Central cabinet.
– Was appointed by the Central cabinet for a fixed
tenure and enjoyed the rank of a cabinet minister.
– Could attend cabinet meetings without the right to
vote.
• Part-time members – Some central ministers
• Ex-officio members – Finance Minister and
Planning Minister

10. LIST OF FIVE YEAR PLANS IN INDIA
[1951-2017]
First Five year Plan(1951- 1956)-The objective was
Rehabilitation of refugees, rapid agricultural
development to achieve food self-sufficiency in
the shortest possible time and control of inflation.
Second Five year Plan(1956-1961)- The objective
was Rapid industrialisation with particular
emphasis on the development of basic and heavy
industries Industrial Policy of 1956 accepted the
establishment of a socialistic pattern of society as
the goal of economic policy.

11. Third Five year Plan(1961-1966)- The objective was
establishment of a self-reliant and self-generating
economy’
Plan Holidays – Annual Plans(1966-1969)- Due to
miserable failure of the Third Plan the government
was forced to declare "plan holidays" (from 1966 to
1967, 1967–68, and 1968–69). Three annual plans
were drawn during this intervening period. During
1966–67 there was again the problem of drought.
Equal priority was given to agriculture, its allied
activities, and industrial sector. The government of
India declared "Devaluation of Rupee" to increase
the exports of the country. The main reasons for
plan holidays were the war, lack of resources and
increase in inflation.

12. Fourth Five year Plan(1969-1974)- The objective
was ‘growth with stability’ and progressive
achievement of self-reliance. Garibi Hatao
Target: 5.5%. At this time Indira Gandhi was the
prime minister. The Indira Gandhi government
nationalised 14 major Indian banks and the
Green Revolution in India advanced agriculture.
In addition, the situation in East Pakistan (now
Bangladesh) was becoming dire as the Indo-
Pakistan War of 1971 and Bangladesh Liberation
War took funds earmarked for industrial
development.

13. Fifth Five year Plan(1974-1979)- The objective was ‘removal
of poverty and attainment of self-reliance’
Rolling Plan (1978–1980)-The Janata Party government
rejected the Fifth Five-Year Plan and introduced a new Sixth
Five-Year Plan (1978–1980). This plan was again rejected by
the Indian National Congress government in 1980 and a new
Sixth Plan was made. The Rolling Plan consisted of three kinds
of plans that were proposed. The First Plan was for the
present year which comprised the annual budget and the
Second was a plan for a fixed number of years, which may be
3, 4 or 5 years. The Second Plan kept changing as per the
requirements of the Indian economy. The Third Plan was a
perspective plan for long terms i.e. for 10, 15 or 20 years.
Sixth Five year Plan(1980-1985)- The objective was ‘direct
attack on the problem of poverty by creating conditions of an
expanding economy’

14. Seventh Five year Plan (1985-1990)- Emphasis on
policies and programs that would accelerate the
growth in foodgrains production, increase
employment opportunities and raise productivity
Annual Plans (1989-1991)-No plan due to political
uncertainties
Eighth Five year Plan (1992-1997)-Rapid economic
growth, high growth of agriculture and allied sector,
and the manufacturing sector, growth in exports
and imports, improvement in trade and current
account deficit. to undertake an annual average
growth of 5.6%

15. Ninth Five year Plan (1997-2002)- Quality of life,
generation of productive employment, regional
balance and self-reliance.Growth with social justice
and equality. growth target 6.5%
Tenth Five year Plan (2002 –2007)-To achieve 8%
GDP growth rate,Reduce poverty by 5 points and
increase the literacy rate in the country.
Eleventh Five year Plan(2007-2012)-Rapid and
inclusive growth.Empowerment through education
and skill development. Reduction of gender
inequality.Environmental sustainability. To increase
the growth rate in agriculture, industry, and
services to 4%,10% and 9% resp. Provide clean
drinking water for all by 2009.

16. Twelfth Five year Plan(2012-2017)- “faster,
sustainable and more inclusive growth”. Raising
agriculture output to 4 percent. Manufacturing
sector growth to 10 %. The target of adding over
88,000 MW of power generation capacity.

17. NITI Aayog (National Institution for
Transforming India)
NITI Aayog (National Institution for Transforming India) replaced
the planning commission after being in service for 64 years. It was
set up on January 1, 2015, to enhance the country’s economic
growth.
• It aims to construct a strong state that will help to create a
dynamic and strong nation. This helps India to emerge as a
major economy in the world. The NITI Aayog’s creation has two
hubs called “Team India Hub” and “Knowledge and Innovation
Hub”.
• Team India: It leads to the participation of Indian states with
the central government.
• The Knowledge and Innovation Hub: it builds the institution’s
think tank capabilities.

18. Composition of NITI Aayog
Headed by Prime Minister Narendra Modi as its
chairperson, the governing council comprises Chief
Ministers of the states and Lt governors of all Union
territories of India. The Vice-Chairman of the
institution is Dr. Rajiv Kumar (September 2017 –
present).
Eminent experts, specialists with relevant domain
knowledge, which will be nominated by the Prime
Minister.
Regional Councils will be created to address
particular issues and possibilities affecting more
than one state. These will be formed for a fixed
term.

19. Objectives of NITI Aayog
• The active participation of States in the light of national objectives
and to provide a framework ‘national agenda’.
• To promote cooperative federalism through well-ordered support
initiatives and mechanisms with the States on an uninterrupted
basis.
• To construct methods to formulate a reliable strategy at the village
level and aggregate these gradually at higher levels of government.
• An economic policy that incorporates national security interests.
• To pay special consideration to the sections of the society that may
be at risk of not profiting satisfactorily from economic progress.
• To propose strategic and long-term policy and programme
frameworks and initiatives, and review their progress and their
effectiveness.
• To grant advice and encourage partnerships between important
stakeholders and national-international Think Tanks, as well as
educational and policy research institutions.

20. • To generate knowledge, innovation, and entrepreneurial
support system through a shared community of national
and international experts, etc.
• To provide a platform for resolution of inter-sectoral and
inter-departmental issues to speed up the accomplishment
of the progressive agenda.
• To preserve a state-of-the-art Resource Centre, be a
repository of research on good governance and best
practices in sustainable and equitable development as well
as help their distribution to participants.
• To effectively screen and assess the implementation of
programmes and initiatives, including the identification of
the needed resources to strengthen the likelihood of
success.
• To pay attention to technology improvement and capacity
building for the discharge of programs and initiatives.
• To undertake other necessary activities to the
implementation of the national development agenda, and
the objectives.