Economic panning in india

OBJECTIVES
DEVELOPMENT STRATEGY
PLANNING COMMISSION
FIVE YEAR PLAN
NITI AAYOG
Economic Planning in India

Introduction of Economic Planning in India
 In India the first systematic attempt of economic planning was made in
1934when M.Vishvesyaryya published his book ‘Planned Economy for India’.
 In 1937, Subhash Chandra Bose the President of Indian National Congress set
up the National Planning Committee with Pt. Jawaharlal Nehru as Chairman.
 In the mean time 8 leading industrialist of Bombay submitted the ‘Bombay
Plan’ in 1943.
 Shri M.N.Roy also released simultaneously his ‘10 year People’s Plan’.
 After that the National Planning Committee submitted its long awaited report
in 1948.
 After Independence Indian Planning Commission was formed in 15th March,
1950.
 The First Five Year Plan commenced in 1950-51 and it was followed by a series
of Five-Year Plans.
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Jyoti Rastogi (Assistant Professor)

Objectives of Economic Planning in India
OBJECTIVES
Economic
Development
Increase
Employment
Self-
Sufficient
Economic
Stability
Social Welfare
and Services
Regional
Development
Comprehensive
Development
To Reduce
Economic
Inequalities
Social
Justice
Increase in
Standard of
Living
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The importance of economic planning
 Best Utilisation of Natural Resources: By adopting the process of economic planning it is
possible to utilise available labour and capital in the interest of nation which helps in
maximisation of national output.
 Growth in National and per capita Income: The maximum level of production increases
the level of savings and investment which ultimately provide sufficient capital for economic
development.
 Improvement in Living Standard: The main reason responsible behind such a miserable
situation has been low level of per capita income and social evils which can be improved by
adopting the process of planning.
 Balanced Economic Development: While preparing industrial plan, more emphasis has
been given to development of consumer industries whereas much is left remained to plan for
development of basic industries.
 Full Employment: The problem of unemployment can be scale-down by encouraging
development of small and cottage industries in the country. In India’s five-year plans, efforts
have been made to generate more and more employment opportunities.
 Equal Distribution of Wealth and Income: A small minority of population is rolling in
luxuries, while the vast masses of people are unable to make their both ends meet. The most
undesirable phenomenon in the country and intensity of which can be minimised by adopting
planned economy.
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Planning Commission
 Planning Commission, agency of the government of India established in 1950
to oversee the country’s economic and social development, chiefly through the
formulation of five-year plans.
 The commission’s original mandate was to raise the standard of living of
ordinary Indians by efficiently exploiting the country’s material and human
resources, boosting production, and creating employment opportunities for all.
 It is today responsible for periodically assessing the country’s resources;
developing five-year plans, along with strategies for implementing them; and
monitoring the execution of the plans and recommending adjustments of policy
as outcomes warrant. The country’s first five-year plan was launched in 1951.
 The commission is chaired by India’s prime minister and includes a deputy
chairman and several full-time members. Each of the numerous divisions of the
commission, corresponding to sectors of the national economy and society, is
headed by a senior officer. The divisions include education, health,
infrastructure, science, financial resources, industry, social welfare, rural
development, and water resources.
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The end of Five-Year Plans
The decades-old Five-Year Plans will make way for a three-year action
plan, which will be part of a seven-year strategy paper and a 15-year
vision document.
 A key component of the Nehruvian socialism—the economic approach
adopted by India's first Prime Minister Jawaharlal Nehru—the Five-
Year Plans have been laid to rest by the Narendra Modi-led NDA
government.
 The 12th Plan, the last of the Five-Year Plans, is to an end on March 31,
2017, though it has been given an extension of six months to allow
ministries to complete their appraisals.
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Five Year Plan (1951 – 2017)
 What were Five-Year plans?
Five-Year Plans (FYPs) were centralised economic and social growth programs.
Joseph Stalin, president of the erstwhile USSR, implemented the first Five-Year
Plan in the late 1920s. India too followed the socialist path but here the planning
was not as comprehensive since the country had both public and private sectors.
The planning in India was only about the public sector. The first Five-Year Plan
was launched in 1951. The idea was to plan public spending for equitable growth
rather than leaving expenditure to the market forces.
 Why they aren't needed now
For a long time, there had been a feeling that for a country as diverse and big as
India, centralised planning could not work beyond a point due to its one-size-fits-
all approach. Moreover, since the Planning Commission used to be controlled by
the Central government, it often ended up as a tool to punish states ruled by the
opposition parties when it came to allocating funds. Due to the top-to-bottom
approach in centralised planning, it was felt that the states needed to have greater
say in planning their expenditure. The Planning Commission was seen to be
imposing its diktats on states who could have better known what and how much
they needed.
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NITI AYOG
 How is Niti Ayog different?
The Niti Ayog, which has replaced the Planning Commission, is the new
body that gives policy direction. Its founding principal is ‘cooperative
federalism’. Most important difference is that Niti Ayog has no power to
grant funds or make decisions on behalf of states. It is only an advisory
body.
 Is the three-year action plan the new Five-Year Plan?
No. This document only provides a broad roadmap to the government. The
document does not detail any schemes or allocations as it has no financial
powers. Since it need not be approved by the Union Cabinet, its
recommendations are not binding on the government. With the
government having done away with the categorisation of expenditure into
plan and non-plan heads, the documents of the Niti Ayog have no financial
role. They are only policy guide maps for the government.
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NITI AYOG
 N.C. Saxena, former member of the planning commission,
said the government had to prepare a 15-year agenda to meet
sustainable development goals by 2030.
 “India has to achieve 16 goals which has 169 sub-targets by
2030. These are not only sustainable goals but have a larger
focus. So there has to be a vision or plan in place to see how
these targets will be met and how much resources will be
required to achieve this. So to a certain extent, there is a
mandatory part to the NITI Aayog’s 15-year development
plan," he said.
 “On the other hand, since the planning commission was
abolished, there was no longer any need for 5-year plans given
that every department finalizes its budget and the finance
ministry takes a final call on the allocations required," he
added.
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The NITI Aayog
 The Prime Minister appoints a CEO and a Vice-Chairperson
of the NITI Aayog.
 Further, it has some full-time as well as part-time members
along with four Union Ministers serving as ex-officio
members.
 It also has a governing council which includes all State
Chief Ministers and Lt. Governors of the Union Territories.
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What does the NITI Aayog mean?
A policy think tank of the Government, the NITI Aayog means:
 A group of people that the Government entrusts for formulating and
regulating policies concerning the transformation of India.
 A Commission assists the Government in both social and economic
issues.
 An institution with experts
 A body that actively monitors and evaluates the implementation of the
Government’s programs and initiatives.
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Features of NITI Ayog
 NITI Aayog is developing itself as a State-of-the-art Resource Centre,
with the necessary resources, knowledge and skills, that will enable it to
act with speed, promote research and innovation, provide strategic
policy vision for the government, and deal with contingent issues.
 NITI Aayog’s entire gamut of activities can be divided into four main
heads:
 Design Policy & Programme Framework
 Foster Cooperative Federalism
 Monitoring & Evaluation
 Think Tank and Knowledge & Innovation Hub
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Objectives of NITI Aayog
1. To evolve a shared vision of national development priorities, sectors and strategies with the
active involvement of States in the light of national objectives.
2. To foster cooperative federalism through structured support initiatives and mechanisms with
the States on a continuous basis, recognizing that strong States make a strong nation.
3. To develop mechanisms to formulate credible plans at the village level and aggregate these
progressively at higher levels of government.
4. To ensure that the interests of national security are incorporated in economic strategy and
policy.
5. To pay special attention to the sections of our society that may be at risk of not benefitting
adequately from economic progress.
6. To design strategic and long term policy and programme frameworks and initiatives, and
monitor their progress and their efficacy.
7. To provide advice and encourage partnerships between key stakeholders and national and
international like-minded Think Tanks, as well as educational and policy research
institutions.
8. To focus on technology up gradation and capacity building for implementation of
programmes and initiatives.
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Composition of NITI Aayog
1. Prime Minister of India as the Chairperson
2. Governing Council comprising the Chief Ministers of all the States and Lt. Governors of
Union Territories
3. Regional Councils will be convened to address specific issues and contingencies impacting
more than one state or a region by the Prime Minister and will comprise of the Chief
Ministers of States and Lt. Governors of Union Territories in the region.
4. Experts, specialists and practitioners as special invitees nominated by the Prime Minister
5. The full-time organizational framework will comprise of, in addition to the Prime
Minister as the Chairperson:
i. Vice-Chairperson to be appointed by the Prime Minister
ii. Full-time members
iii. Maximum of 2 part-time members from leading universities research organizations
and other relevant institutions in an ex-officio capacity
iv. Maximum of 4 members of the Union Council of Ministers to be nominated by the
Prime Minister as Ex Officio members
v. Chief Executive Officer to be appointed by the Prime Minister for a fixed tenure, in the
rank of Secretary to the Government of India.
vi. Secretariat as deemed necessary.
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The measures were taken by the NITI Aayog to
help India face complex challenges
 Leverage India’s demographic dividend and realize the potential
of young men and women. This is done through imparting
education, skill development, the elimination of gender bias and
providing employment opportunities.
 Eliminate poverty and offer Indians a better chance to live a life
of dignity and respect.
 Redress inequalities based on gender bias, caste, and economic
disparities.
 Integrate villages into the development process of the country.
 Provide policy support to more than 50 million businesses – a
major source of employment generation.
 Safeguard our environmental and ecological assets.
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Jyoti Rastogi (Assistant Professor) 16

Economic panning in india

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