The following were the original goals of Indian economic planning:

Economic development is the primary goal of planning in India. India’s economic development is measured by increases in Gross Domestic Product (GDP) and Per Capita Income. 

Increased Employment Levels: An important goal of Indian economic planning is to better utilise the country’s available human resources by increasing employment levels.

Self-sufficiency: Through economic planning, India aims to be self-sufficient in major commodities while also increasing exports. During the third five-year plan, 1961-66, the Indian economy had reached the take-off stage of development.

Economic Stability: Economic planning in India aims for stable market conditions as well as India’s economic growth. This entails keeping inflation at a low level while also preventing price deflation. If the wholesale price index rises or falls sharply, structural flaws in the economy are created, which economic planning seeks to avoid.

What is economic planning?

Economic planning is the process by which central governments make or influence key economic decisions. It differs from the laissez-faire approach, which, in its purest form, rejects any attempt to guide the economy, instead of relying on market forces to determine the speed, direction, and nature of economic evolution.

By the late 1960s, the vast majority of the world’s countries were operating within the framework of a national economic plan. However, in the 1980s, both economic planning theory and practice experienced a crisis. The rate of economic growth in developed market economies has slowed from the extremely high levels reached in the 1960s and 1970s, and unemployment has risen significantly.

History of economic planning in India

Economic planning in India dates back to the pre-independence period when leaders of the freedom movement, prominent industrialists, and academics gathered to discuss India’s future after independence, which was soon to come. M. Visvesvaraya, a well-known civil engineer and administrator, is widely regarded as an early proponent of economic planning in India. His 1934 book “Planned Economy for India” proposed a ten-year plan with an Rs. 1000 crore outlay and a 600 percent increase in industrial output per year based on economic conditions at the time.

The Industrial Policy Statement, issued shortly after independence in 1948, advocated for the establishment of a Planning Commission and the adoption of a mixed economic model. The following are the major milestones in Indian economic planning:

• The Planning Commission was established on March 15, 1950.
• The first five-year plan was implemented on July 9, 1951.
• The Planning Commission was dissolved on August 17, 2014.
• NITI’s establishment (National Institution for Transforming India) Aayog: January 1, 2015.

Objectives of Economic Planning in India

• Economic Stability: Economic stability is just as crucial as economic development. It denotes the lack of frequent and extreme experiences of inflation and deflation. Many different forms of structural imbalances occur in the economy when the price level rises or decreases unexpectedly.

• Social Justice: This planning purpose is connected to all of the others and has been a primary emphasis of planning in India. It attempts to minimise the number of individuals living in poverty and provide them with access to work and social services.

• Social Welfare and Services: The goal of the five-year plan has been to promote labour welfare, economic development of the underprivileged, and social welfare for the poor. The development of social services such as education, health, technical education, scientific advancement, and so on has also been a goal of the Plans.

• Economic Development: The achievement of higher rates of economic growth was prioritised practically in India’s Five Year Plans. Because the country’s economy was suffering from acute poverty, eradicating poverty and improving our people’s standard of living is attainable by achieving a greater rate of economic growth.

• Regional Development: The goal of India’s economic planning is to decrease regional differences in development. Some states, such as Punjab, Haryana, Gujarat, Maharashtra, and Tamil Nadu, are comparatively economically developed, whereas others, such as Uttar Pradesh, Bihar, Orissa, Assam, and Nagaland, are economically backward. Others, such as Karnataka and Andhra Pradesh, have unequal growth, with world-class economic centres in cities and less developed countryside. Planning in India tries to investigate these inequities and provide methods to address them.

Who leads economic development planning?

The economic development plan is frequently led by an economic development professional, such as an economic development practitioner or economic development officer, though this can vary depending on the economic development model chosen by the community.

The plan should be reviewed on a regular basis to ensure that it is up to date. Typically, plans must be updated every three to five years to reflect changing community needs and priorities.

Types of economic planning

Planning by direction, as an integral part of socialist society, entails the complete absence of a laissez-faire system. This type of economic planning is characterised by a single central authority that plans, directs, and executes according to predetermined economic priorities.

Planning by Induction, on the other hand, is more democratic in nature. It entails market manipulation for planning purposes. 

Although there is no compulsion, planning by inducement employs a certain amount of persuasion. The enterprises have the freedom of production and consumption in this type of planning. 

However, the state controls and regulates these liberties through policies and measures.

Ministry of economic planning

The Ministry of Economy, Planning, and Regional Development (MINEPAT) is in charge of national land-use planning, public investments, and the control and evaluation of development programmes. This Ministry has a broad mandate and is capable of carrying out activities that necessitate inter-ministerial cooperation. It also coordinates industrial, commercial, and trade matters and works with a variety of public and private sector organisations to facilitate the implementation of government trade and industry policies. This is consistent with the mission statement of the Ministry.