The Planning Commission of India was established in 1950 to formulate and implement the Five-Year Plans to promote the development of the Indian economy. It will be replaced by a new institution as announced by Prime Minister Modi. The Planning Commission is being scrapped because it is seen as outdated and reducing the role of states and private sector in development. Its targets are often not met and it does not consider regional differences. The new institution will promote cooperation between public and private sectors and empower states to pursue development.

1. PLANNING COMMISSION
OF INDIA
BY
MANISH BANSAL
RAJJAK KATHAT

2. WHAT IS PLANNING COMMISSION ?
o The Planning Commission is an institution in the Government of
India, which formulates India's Five-Year Plans, among other
functions.
o The Planning Commission was set up by a Resolution of the
Government of India in March 1950 in pursuance of declared
objectives of the Government to promote a rapid rise in the
standard of living of the people by efficient exploitation of the
resources of the country, increasing production and offering
opportunities to all for employment in the service of the
community.

3. FUNCTIONS OF PLANNING COMMISSION
The Planning Commission's functions as outlined by the
Government's 1950 resolution are following:
 To formulate a plan for the most effective and balanced utilization
of country's resources.
 To define the stages, on the basis of priority, in which the plan
should be carried out and propose the allocation of resources for
the due completion of each stage.
 To indicate the factors that tend to retard economic development.

4. FUNCTIONS OF PLANNING COMMISSION
 To determine the conditions which need to be established for the successful
execution of the plan within the incumbent socio-political situation of the
country.
 To determine the nature of the machinery required for securing the successful
implementation of each stage of the plan in all its aspects.
 To appraise from time to time the progress achieved in the execution of each
stage of the plan and also recommend the adjustments of policy and measures
which are deemed important for successful implementation of the plan.

5. FUNCTIONS OF PLANNING COMMISSION
 To make necessary recommendations from time to time regarding those things
which are deemed necessary for facilitating the execution of these functions.
Such recommendations can be related to the prevailing economic conditions,
current policies, measures or development programs. They can even be given
out in response to some specific problems referred to the commission by the
central or the state governments.

6. SECTORS OF PLANNING COMMISSION
 Agricultural
 Communication Information and Information Technology
Division
 Educational
 Employment
 Environment & Forests
 Health
 Industry
 Minerals
 Infrastructure

7. SECTORS OF PLANNING COMMISSION
 Power and Energy
 Rural Development
 Science & Technology
 Social Justice
 Urban Affairs
 Women Empowerment
 Water Resources

8. AGRICULTURAL
 Agricultural Research and Education
 Agricultural Extension and Administration
 To formulate plans for the development of sub-sectors of Agriculture
 Dairying and Milk Supply
 Fisheries
 Agricultural Marketing, Storage andWarehousing

9. COMUNICATION & INFORMATION TECHNOLOGY
Telecommunication
Postal sector : Department of post
Information Technology
Information Broadcasting

10. EDUCATION DIVISION
 Educational Program
 Girls Education
 Art & Culture
 Youth Affairs & sports

11. EMPLOYMENT
 Analytical and Estimation Work
 Employment Strategy, Labour and Manpower Policy
 Plan schemes for Labour and Labour Welfare and Special
Employment
 Labour Policy
 Institute of Applied Manpower Research (IAMR)

12. ENVIRONMENT & FOREST DIVISION
 Environment
 Forest
 Wildlife
 Climate change
 Disaster management

13.  Industrial Policy
 Analyze Industrial statistics
 Public Sector
 Private Sector
 Taxes & Subsidies
INDUSTRIAL

14.  Transport
 Railways
Road Transport
Shipping
Ports
 Inland Water Transport
 Construction
INFRASTRUCTURE

15. SCIENCE & TECHNOLOGY
 Department of Atomic Energy (DAE)- R and D Sector
 Department of Space (DOS)
 Department of Science and Technology (DST)
 Department of Biotechnology (DBT)
 Department of Scientific and Industrial Research (DSIR) including
the Council of Scientific and Industrial Research (CSIR)
 Ministry of Earth Sciences (MoES)

16. WATER RESOURCES
 Major and Medium Irrigation
 Minor Irrigation
 Flood Control
 Command Area Development and Water Management (CADWM)
 Water Supply and Sanitation

17.  Social Welfare
SOCIAL EMPOWERMENT
 Women & Child Development

18. RURAL DEVELOPMENT
The Rural Development Division looks after the following programmes
being implemented by the Ministry of Rural Development (MoRD):
 National Rural Employment Guarantee Act (NREGA)
 Swarnjayanti Gram Swarozgar Yojana (SGSY)
 Indira Awaas Yojana (IAY)
 National Social Assistance Programme (NSAP)
 Integrated Watershed Management Programme (IWMP)

19. FIVE YEAR PLAN OF INDIA
1ST FIVE YEAR PLAN(1951-56)
 Total budget: 206.8 billion (INR) or USD$23.6 billion.
 Target growth: 2.1% (yearly) growth in gross domestic product.
 Areas covered: India's five year plans, the 1st plan dealt with seven categories.
 They included:
 Agriculture as well as community development
 Energy as well as Irrigation
 Communications and transport
 Land rehabilitation Social services
 Miscellaneous Industrial sector

20. FIVE YEAR PLAN OF INDIA
2nd Five year plan(1956-61)
Dealt with hydroelectric projects, steel mills, production of coal, addition of railway tracks and other aspects. The 2nd five
year plan abided by Mahalanobis model.
3rd five year plan(1961-66)
Many primary schools were started in rural areas. In an effort to bring democracy to the grass-root
level, Panchayat elections were started and the states were given more development responsibilities.
4th five year plan(1969-74)
Commencement of panchayat elections. The target growth rate was 5.6%, but the actual growth rate was 3.3% The Indira
Gandhi government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture.
5th five year plan(1974-79)
The Fifth Five-Year Plan laid stress on employment, poverty alleviation (Garibi Hatao), and justice. The plan also focused
on self-reliance in agricultural production and defence.
6th five year plan(1980-85):
The Sixth Five-Year Plan marked the beginning of economic liberalisation. Price controls were eliminated and ration
shops were closed. This led to an increase in food prices and an increase in the cost of living. Family planning was also
expanded in order to prevent overpopulation.

21. FIVE YEAR PLAN OF INDIA
7th five year plan(1985-90)
The main objectives of the Seventh Five-Year Plan were to establish growth in areas of increasing economic
productivity, production of food grains, and generating employment. The major areas of the Seventh Five-Year Plan
were: social justice, removal of oppression of the weak, using modern technology, agricultural development, anti-poverty
programmes, full supply of food, clothing, and shelter, increasing productivity of small- and large-scale
farmers, and making India an independent economy. The target growth rate was 5.0% and the actual growth rate was
6.01%
8th five year plan(1992-97)
Modernization of industries was a major highlight of the Eighth Plan. Under this plan, the gradual opening of the
Indian economy was undertaken to correct deficit and foreign debt.
The major objectives included, controlling population growth, poverty reduction, employment generation,
strengthening the infrastructure, institutional building, tourism management, human resource development,
involvement of Panchayati rajs, Nagar Palikas, NGOs, decentralisation and people's participation. An average annual
growth rate of 6.78% against the target 5.6%was achieved.
9th five year plan(1997-2002)
The Ninth Five-Year Plan had a total public sector plan outlay of ₨ 8,59,200 crores. The Ninth Five-Year Plan also
saw a hike of 48% in terms of plan expenditure and 33% in terms of the plan outlay in comparison to that of the
Eighth Five-Year Plan. In the total outlay, the share of the centre was approximately 57% while it was 43% for the
states and the union territories. The target growth was 7.1% and the actual growth was 6.8%.

22. 10th Five Year Plan
(2002-2007)
 Attain 8% GDP growth per year.
 Reduction of poverty rate by 5% by 2007.
 Providing gainful and high-quality employment at least to the addition to
the labour force.
 Reduction in gender gaps in literacy and wage rates by at least 50% by
2007.
 20-point program was introduced.
 Target growth: 8.1% - growth achieved: 7.7%
 Expenditure of ₨ 43,825 crores for tenth five years

23. 11th Five Year Plan
(2007-2012)
 Rapid and inclusive growth.(Poverty reduction)
 Emphasis on social sector and delivery of service therein.
 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% respectively.
 Reduce Total Fertility Rate to 2.1
 Provide clean drinking water for all by 2009.
 8% growth rate compared to targeted 9%.

24. 12th Five Year Plan
(2012-2017)
 Average GDP Growth of 8 percent
 Agriculture Growth of 4 percent
 Reducing head-count poverty by 10 percentage point
 Generating 50 million work opportunities
 Eliminating gender and social gap in education
 Reducing IMR to 25, MMR to 100 and TFR to 2.1
 Enhance infrastructure investment to 9% of GDP
 Achieve universal road connectivity and access to power for all villages
 Access to banking services for 90 percent households
 Major welfare benefits and subsidies via Aadhaar

25. 12th Five Year Plan
Strategy for Achieving Inclusiveness
 There are two routes to inclusiveness
 through higher growth which expands income and employment opportunities
 through government pro-poor programmes which target poorer groups
 Both are important. Twelfth Plan combines the pro-poor programme approach with efforts to
get a growth pattern which is faster and inherently more inclusive
 Two routes are mutually reinforcing
 High growth generates more revenues, to finance inclusiveness programmes
 Many inclusiveness programmes (health and education) contribute to growth

26. 12th Five Year Plan
Macro-Economic Challenges in Achieving High Growth
• Must increase the rate of investment, especially in infrastructure
• Domestic savings must increase even more to reduce the investment saving gap
which is necessary to keep the Current Account Deficit under control
• Government dis-savings must be eliminated. This means fiscal deficit must be
reduced
• Growth of subsidies has to be contained
• 75% of the investment in the economy is private investment (household plus
corporate)
• Both the Centre and the States have to create an eco-system that encourages private
investment
• Infrastructure, especially quality of power, and availability of skills is critical

27. 12th Five Year Plan
Effectiveness of Plan Programmes
• Twelfth Plan sets ambitious targets for Flagship Programmes in areas of Health,
Education, Rural infrastructure, Livelihood Development etc.
• Too much focus on the level of expenditure in these programmes. Not enough
on effectiveness in terms of end results
• Implementation in the field is the responsibility of State Government agencies.
However, programme guidelines are set by the Central Government
• There are demands for greater flexibility from states. We are responding as
follows :
 Guidelines are being made more flexible to meet the requirements of
individual States
 10% flexi-fund within each scheme for innovations

28. Energy
• 8 percent GDP growth requires 6 percent growth in energy supply from all
sources
• Our fossil fuel resources are limited, and our import dependence is already
high
• Enhanced Energy Efficiency in all sectors
• We need to push for renewable Energy:Wind, Solar and Storage Hydro
• Difficult Policy Issues:
 Coal vs. Forest Cover
 Petroleum Price Distortions
 Natural Gas Exploration Framework
 All Energy Prices: Coal, Petroleum product, Natural Gas and Electric
power are currently under priced. Fuel adjustment is needed

29. Water
• Management of water resource is a major challenge. Estimates of water
availability have been optimistic
• Twelfth Plan proposes modified AIBP and expanded Watershed
Management Programme
• Water sector needs better Regulatory Framework
 New Groundwater Law
 Water Regulatory Authorities in each state
 NationalWater Framework Law
• Agriculture accounts for 80% of water use at present, must shift to more
water efficient agriculture practices
• Manage urban and industrial water demand through water recycling and
rationalise user charges

30. Alternative Scenarios
• 12th Plan goal of 8% inclusive growth is not a foregone conclusion
• Depends on difficult policy decisions to be taken by Centre and States
• For the first time Plan presents three scenarios
Strong Inclusive Growth 8%
Insufficient Action 6 to 6.5%
Policy logjam 5 to 5.5%
• Anything much less than 8% will not satisfy aspirations of the people

31.  Prime Minister Narendra Modi announced that the government would replace the
Planning Commission with a new body, bringing the curtains down on the 64-year old
institution founded on the former Soviet Union's command-style development model.
 “We will replace the Planning Commission with a new institution having a new design
and structure, a new body, a new soul, a new thinking, a new direction,” Modi said in his
first Independence Day speech as the country’s Prime Minister.
 Modi said the new, yet undefined institution, will forge a “new direction to lead the
country based on creative thinking, public-private partnership, optimum utilisation of
resources, utilisation of youth power of the nation, to promote the aspirations of state
governments seeking development, to empower the state governments and to empower
the federal structure”.

32. REASON OF SCRAPING PLANNING COMMISSION
 The primary aim of Planning Commission(PC) was to allocate scarce resources of the
country to various sectors of the economy. This was done to bring about orderly
development. It was a need in the times of Nehru's Soviet styled planned socialism. Free
market itself is considered as an efficient resource allocator. PC's importance is thus
reduced.
 Plan expenditure is money spent by Centre and States on plans. All other expenditures
constitute unplanned expenditure(this includes the often derided subsidy bill). During
fiscal year 2012-13, non plan was 65% of total expenditure. Thus, a major part of
government resources are spent unplanned these days. About 80,000 crores
of plan expenditure was not spent in FY 2013.
 Plan targets set by PC are often not met on time. Example, eleventh five
year plan envisaged to provide clean drinking water to all by 2009. By the end of 2008,
17% of Indians still lacked access to clean drinking water.

33. REASON OF SCRAPING PLANNING COMMISSION
 PC suggested that anyone spending more than Rs 32 in urban areas and Rs 26 in rural parts
in a day is not poor. No justification is required to prove how foolish is this. This shows
how much PC is untouched by the reality.
 The growth of coalition governments and regional parties in the last 20 years has
decentralised the political structure and therefore there is now need for more devolution
of planning to state and local levels. States need greater flexibility to address their varied
developmental challenges.
 Times have changed since inception of PC in 1951. Private sector now plays an important
role in development of the country. And given that Modi believes in the concept of
"minimum government and maximum governance". It makes more sense to do away with
an organisation which is increasingly seen as adding to red tape. Recent battle between
NHAI and PC is an example.
 When Modi was the CM of Gujarat, he was vocal to raise issue of PC being impartial while
granting plan funds to States. He also hated PCs "one size fits all" policy.

34. THANK YOU