Even though the Planning Commission of India is no longer in operation, it was an important part of Indian planning and governance.

According to the commission, which played a pivotal part in India’s transition from a beaten country under the British Raj to an independent nation with high development goals, the bureaucracy has stifled economic progress. The commission was criticised for spending INR 35 lakhs on two toilets and saying that those who spend more than INR 27 a day are not poor (2012 census).

NITI Aayog replaced the Planning Commission in 2014. It’s a think tank that works with various stakeholders to help the country develop.

Planning Commission: Background

The Planning Commission of India was a government institution that developed the country’s five-year plans. The government charged the Planning Commission to ensure that all citizens have equal employment opportunities.

In India, the Planning Commission directly answered to the Prime Minister. When formed on March 15th, 1950, Prime Minister Jawaharlal Nehru served as the organisation’s first chairman. The Planning Commission was a Central or Union Government body, not a statutory or constitutional entity.

The Government of India Resolution of March 1950 established the Planning Commission. The primary goals of the government were to accelerate the rise in the standard of living among Indians through the productive exploitation of the country’s assets, raising output, and ensuring that everyone had access to employment that served society. The government tasked the Planning Commission with assessing the country’s resources, improving scarce resources, developing strategies for resource allocation, and determining priorities. 

The government pursued the five-year plans until 1965, as the conflict with Pakistan halted the progress. In 1969, the 4th Five-year Plan halted due to two years of drought, rupee devaluation, general price increases, and resource depletion.

Due to political changes and instability at the Centre, the government could not launch the eighth plan in 1990 and instead issued Annual Plans for 1990-91 and 1991-92. The 8th plan began in 1992 after the government initiated economic liberalisation policies. Post the launch of the 9th plan in 1997, the focus changed from heavy industries to the concept that planning should be largely indicative.

Planning Commission: Functions

The following were the functions of the Planning Commission:

• Evaluate ways to enhance the nation’s material, capital, and human resources (including technical staff).
• Plan for the effective use of national resources.
• Make clear how to implement the plan and allocation of resources to each stage.
• Identify the obstacles to economic growth, and determine what conditions are necessary for the plan’s successful implementation in view of the current social and political situation.
• Determine the machinery required to complete each stage of the plan successfully.
• Regularly assess the plan’s progress and make any necessary corrections or policy, and measure recommendations.
• Make interim or ancillary recommendations based on the current economic conditions, policies, measures, development programmes, or specific problems that the Central or State Governments may refer to.

Positives And Achievements

The following were the achievements of the Planning Commission:

• The Planning Commission prioritised infrastructure and capacity development—and made huge investments in education, energy, industry, railways, and irrigation.
• Agriculture became self-sufficient in India, and the country also made significant progress in capital and consumer goods.
• The Planning Commission established notable concepts like nationalisation and the Green Revolution and adapted to new concepts like privatisation, liberalisation, and inclusion.
• The Planning Commission prioritised employment generation, poverty alleviation, health, social justice, governance, and skill development.
• The credit for India’s transformation from a developing country to an emerging economic power goes to the planned and phased implementation.

Planning Commission: Problems

The following were the problems of the Planning Commission:

• No structural mechanism for regular state engagement
• No efficient forum for resolving central state and inter-ministerial issues
• No access to experts outside the government, weak networks with think tanks, and insufficient capacity for expertise
• Failed to conduct land reforms
• Unable to make the union/states/UTs answerable for not meeting the targets—it was a toothless body
• Plans such as the ‘one size fit all’ approach failed to produce results
• Weak monitoring, implementation, and evaluation

Why Does India Need To Revamp Its Planning Commission?

The following are the reasons why India needs to revamp its Planning Commission:

• Rather than centralisation, constitutional ethos such as federalism governs the contemporary world.
• Indian states are now as large as European countries, and the country’s population has tripled to 121 crores.
• From a developing nation to one of the world’s largest economies, India’s economy has grown from 10,000 crores to 100 lakh crore (at current prices). After Japan, India now ranks 3rd in terms of purchasing power parity GDP, behind only the US and China. The new economy requires global institutions.
• Cooperative and fiscal federalism will help meet the diverse needs of states/UTs, where the Planning Commission failed drastically. The Planning Commission must tailor the plans to the needs and requirements of each state to meet their aspirations.
• In India, agriculture’s contribution to GDP has decreased dramatically while the service sector’s contribution has increased. Since 1991, when our economy liberalised, private firms have played a major role. We now live in a globalised world connected by modern transportation, media, and communications. Over time, people’s objectives have changed from survival to safety and surplus with increasing levels of development. So the governance systems must be up to date to keep up.
• There needs to be a change in the economic situation where the government enables instead of playing or delivering first and last.

How Did NITI Aayog Change The Fundamental Nature Of Planning In India?

Change in policy making

NITI Aayog designs long-term and strategic plans and programmes for the Indian government and advises the central and state governments on technical issues.

Bottom-up approach

It is possible to achieve sustainable development goals using a bottom-up approach to economic policymaking and cooperative federalism by encouraging the participation of state governments in the economic policymaking process.

New innovations

The two main hubs of NITI Aayog are Knowledge and Innovation Hub and Team India Hub. The Knowledge and Innovation Hub strengthens NITI’s capacity as a think tank, while the Team India Hub promotes collaboration between central and state governments.

Strategic programs

Create long-term policy and programme frameworks and monitor their progress and effectiveness. NITI Aayog uses monitoring and feedback to make innovative improvements, including mid-course corrections.

Coordination among different departments

It helps resolve inter-sector and inter-departmental concerns, accelerating the development agenda’s implementation.

Digitisation

It focuses on improving technology and building capacity to implement programmes and initiatives.

Interference of Technocrats

Individuals with technical training and occupations believe that technology and related applications can solve many important societal problems.

Conclusion

The Indian government’s resolution in March 1950 established the non-constitutional and non-statutory Planning Commission. It advised the Indian government on a range of economic development issues. The Prime Minister served as the group’s ex-officio chairman, and NITI Aayog replaced it in 2014.

Several persons have criticised the Planning Committee’s function. The most critical is its responsibility as an extra-constitutional body. While the Constitution divides power and responsibility between the union and the states for certain subjects and activities, others claim that the Planning Commission, formed by the executive order of the union, operates as a “super-cabinet” for the union and the states in economic matters.