Faculty of GA&GS in Delhi Since 2010.Selected in LIC(ADO),BankPO,CGL,2 Times Mains in CSE,Founder:-GovtJobsAcademy @Youtube/Telegram/FB/Web.

Vikas Kumar Singh Tomar

Economic Planning Strategy in India

In order to achieve the long-term and short-term objectives set in the each five year, specific strategies are required. It involves allocation resources across different sectors of the economy in tandem with the specified objectives. It involves selection choices like development of agricultural sector or industrial sector, public sector or private sector involvement, closed economy or open economy model. Indian planning strategies can be split into two phases: pre-1991 phase and post – 1991 phase.

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UPSC CSE - GS

UPSC - Civil Services Examination (IAS) Preparation

Hindi

(Hindi) Economic Planning and Niti Aayog in India for UPSC and Other Competitive Exams

Crash Course

Indian Economy

UPSC CSE

Ace the toughest competitive and government exams in India 

Test Preparation

Union Public Service Commission Exams (UPSC)

Economy

UPSC - Planning - Crash Course

First of all the idea of planned economy was crystallized in 1930s when our national leaders came under the influence of socialist philosophy. India’s Five year plans were very much impressed by the rapid strides achieved by the USSR through five years plans.

In 1934, Sir M. Visvesvaraya had published a book titled “Planned Economy in India”, in which he presented a constructive draft of the development of India in next ten years. His core idea was to lay out a plan to shift labor from agriculture to industries and double up National income in ten years. This was the first concrete scholarly work towards planning. The economic perspective of India’s freedom movement was formulated during the thirties between the 1931 Karachi session of Indian National Congress, 1936 Faizpur session of India National Congress.

Contents

National Planning Committee
Bombay Plan
People’s Plan
Gandhian Plan
Sarvodaya Plan
Planning and Development Department
Planning Advisory Board
Planning Commission
National Development Council
National Planning Committee

The first attempt to develop a national plan for India came up in 1938. In that year, Congress President Subhash Chandra Bose had set up a National Planning Committee with Jawaharlal Nehru as its president. However the reports of the committee could not be prepared and only for the first time in 1948 -49 some papers came out.

Bombay Plan

In 1944 Eight Industrialists of Bombay viz. Mr. JRD Tata, GD Birla, Purshottamdas Thakurdas, Lala Shriram, Kasturbhai Lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together prepared “A Brief Memorandum Outlining a Plan of Economic Development for India”. This is known as “Bombay Plan”. This plan envisaged doubling the per capita income in 15 years and tripling the national income during this period. Nehru did not officially accept the plan, yet many of the ideas of the plan were inculcated in other plans which came later.

People’s Plan

People’s plan was drafted by MN Roy. This plan was for ten years period and gave greatest priority to Agriculture. Nationalization of all agriculture and production was the main feature of this plan. This plan was based on Marxist socialism and drafted by M N Roy on behalf of the Indian federation of Lahore.

Gandhian Plan

This plan was drafted by Sriman Nayaran, principal of Wardha Commercial College. It emphasized the economic decentralization with primacy to rural development by developing the cottage industries.

Sarvodaya Plan

Sarvodaya Plan (1950) was drafted by Jaiprakash Narayan. This plan itself was inspired by Gandhian Plan and Sarvodaya Idea of Vinoba Bhave. This plan emphasized on agriculture and small & cottage industries. It also suggested the freedom from foreign technology and stressed upon land reforms and decentralized participatory planning.

Planning and Development Department

In August 1944, The British India government set up “Planning and Development Department” under the charge of Ardeshir Dalal. But this department was abolished in 1946.

Planning Advisory Board

In October 1946, a planning advisory board was set up by Interim Government to review the plans and future projects and make recommendations upon them.

Meaning and Historical Background of Planning in India (in Hindi)

Planning Commission

Immediately after independence in 1947, the Economic Programme Committee (EPC) was formed by All India Congress Committee with Nehru as its chairman. This committee was to make a plan to balance private and public partnership and urban and rural economies. In 1948, this committee recommended forming of a planning commission. 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, the Planning Commission was set up by a Resolution of the Government of India as an advisory and specialized institution. Planning Commission was an extra-constitutional body, charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilization of resources and determining priorities. Jawaharlal Nehru was the first Chairman of the Planning Commission.

National Development Council

Government of India could take the initiative to set up the planning commission only by virtue of provision in the constitution which made Economic & Social planning an item in Concurrent list. The Resolution to set up a planning commission was actually based upon the assumption that the roots of Centre- State cooperation should be deeper. Later, in 1952, the setting up of the National Development Council was in fact a consequence of this provision.

Planning Commission,National Development Council and State Planning Boards (in Hindi)

Difference between Niti Ayog and Planning Commission

Planning Commission was an advisory body, and so is Niti Ayog. But the key difference between them is that while the former had powers to allocate funds to ministries and states; this function will be now of finance ministry. Niti Ayog is essentially a think tank and a truly advisory body. Other differences are as follows:

The role of states in the planning commission era was limited. The states annually needed to interact with the planning commission to get their annual plan approved. They had some limited function in the National Development Council. Since Niti Ayog has all chief ministers of states and administrators of UT in its Governing Council, it is obvious that states are expected to have greater role and say in planning/ implementation of policies.
The top down approach is reversed in Niti Ayog. It will develop mechanisms to formulate credible plans to the village level and aggregate these progressively at higher levels of government.
The provision of regional council is there in Niti Ayog to address local / regional development issues.
One of the new functions of Niti Ayog is to address the need of the National Security in the economic strategy. How this is to be done – is yet to be watched.
While the planning commission formed Central Plans, Niti Ayog will not formulate them anymore. It has been vested with the responsibility of evaluating the implementation of programmes. In this way, while Niti Ayog retains the advisory and monitoring functions of the Planning commission, the function of framing Plans and allocating funds for Plan assisted schemes has been taken away.
The governing council, which has all chief ministers of states and administrators of the Union Territories sounds much like the National Development Council.

Difference Between Planning Commission and NITI Aayog

NITI Aayog: The Institutional Structure

NITI Aayog (Policy Commission) or National Institution for Transforming India was established via a Union Cabinet resolution on January 1, 2015 as a premier Policy Think Tank of the Union Government. It’s an extra-constitutional, non-statutory and advisory body.

Contents

Aims and Functions of Niti Aayog
Composition of NITI Ayog
Current Key Officers of NITI Aayog
Two Hubs of NITI Aayog
Offices Attached To the NITI Aayog
DMEO
NILERD
Aims and Functions of Niti Aayog

The key objectives to establish NITI Aayog were as follows:

To work as an advisory body to give directional and strategic inputs to Union Government and also State governments on request.
Put an end to the slow and tardy implementation of the policyby fostering inter-ministry, inter-state and centre-state coordination.
To foster cooperative federalism on the principle of Strong states make a strong nation.
To replace the top-down development approach with bottom-top development approach.
To design policy framework for weaker section of society that may not have benefited from economic progress.
To create a knowledge, innovation and entrepreneurial support systemvia a community of national and international experts, practitioners and partners.
To serve as a platform for resolution of inter-sectoral and inter-departmental issuesin order to accelerate the implementation of the development agenda.
To monitor and evaluate the implementation of programmes, and focus on technology upgradation and capacity building.
On the basis of above, functions of NITI Aayog can be divided into four categories viz. (1) To act as a Resource Centre & Knowledge Hub (2) Design Policy & Programme Framework (3) Foster Cooperative Federalism (4) Monitoring and Evaluation.

Composition of NITI Ayog

Chairperson-Prime Minister
Governing Council– Its members are Chief Ministers and Administrators of the Union Territories
Regional Councils-These are created as per need and its members would be chief ministers and administrators of UTs of respective regions.
Vice-Chairperson– The Vice-chairperson of the Niti Aayog is appointed by Prime Minister.
Further, the NITI Aayog has full time members (number unspecified), part time members (maximum 2, these would be scholars from universities and research institutions), Ex-officio members (maximum 4, these are ministers from Union Council of Ministers), Special Invitees (appointed by PM for fixed tenure. Finally, there is a Chief Executive Officer (CEO) of the Niti Ayog, who is appointed by Prime Minister and has a rank similar to Secretary to the Government of India.

Current Key Officers of NITI Aayog

Chairperson: Prime Minister Narendra Modi
Vice Chairperson: Dr. Rajiv Kumar
Full-Time Members: Dr. Bibek Debroy; V.K. Saraswat; Prof. Ramesh Chand and Dr. V. K. Paul
Chief Executive Officer: Amitabh Kant
Two Hubs of NITI Aayog

At the core of NITI Aayog’s creation are two hubs viz. Team India Hub (TIH) and the Knowledge and Innovation Hub (KIH).  These two components were created by an order in August, 2015. Further, the Task force under Sindhushree Khullar had proposed to restructure NITI aayog into three components viz. TIH, KIH and a Flexi pool. The third component is currently under progress as the recruitment rules were not finalised. The objective of flex pool was to augment institution’s capacity to take on new assignments.

Team India Hub consists of 6 subject matter verticals and Knowledge and Innovation Hub 10 verticals. The list of verticals is as below:

Administration
HRD, Governing Council Secretariat & Coordination
Agriculture & Allied Sectors
Data Management & Analysis
Governance and Research
Industry
Infrastructure-Energy, International Cooperation, General Administration & Accounts
Infrastructure- Connectivity
Natural Resources & Environment
Project Appraisal, Public Private Partnership and PIB
Rural Development
State Coordination & Decentralized Planning
Science & Technology
Social Sector – I (Skill Development, Labour & Employment, Urban Development)
Social Sector – II (Health & Nutrition, Women & Child Development)
Social Justice and Empowerment
Offices Attached To the NITI Aayog

At present, the offices attached to NITI Aayog are as follows:

DMEO

Development Monitoring and Evaluation Office (DMEO) has been constituted on 18th September, 2015 by merging the erstwhile Programme Evaluation Organization (PEO) and the Independent Evaluation Office (IEO).

NILERD

Government of India established the National Institute of Labour Economics Research and Development (NILERD) in 1962. It is a Central Autonomous Organization, now attached to NITI Aayog, Ministry of Planning.

All About NITI AAYOG and 15 years Plans instead of 5 year plans (in Hindi)

The concept of economic planning in India is derived from the Russia (then USSR). India has launched 12 five year plans so far. First five year plan was launched in 1951. Now the present NDA government has stopped the formation of five year plans. So 12th five year plan would be called the last five year plan of India.

1. First Five Year Plan:
I. It was made for the duration of 1951 to 1956.
II. It was based on the Harrod-Domar model.
III. Its main focus was on the agricultural development of the country.
IV. This plan was successful and achieved growth rate of 3.6% (more than its target)

2. Second Five Year Plan:
I. It was made for the duration of 1956 to 1961.
II. It was based on the P.C. Mahalanobis Model.
III. Its main focus was on the industrial development of the country.
IV. This plan was successful and achieved growth rate of 4.1%

(P.C. Mahalanobis)

p c mahalanobis

3. Third Five Year Plan:
I. It was made for the duration of 1961 to 1966.
II. This plan is called ‘Gadgil Yojna’ also.
III. The main target of this plan was to make the economy independent and to reach self active position of take off.
IV. Due to china war, this plan could not achieve its growth target of 5.6%

Welfare Programmes by the Government of India

4. Plan Holiday:
I. The duration of plan holiday was from 1966 to 1969.
II. The main reason behind the plan holiday was the Indo-Pakistan war & failure of third plan.
III. During this plan annual plans were made and equal priority was given to agriculture its allied sectors and the industry sector.

5. Fourth Five Year Plan:
I. Its duration was from 1969 to 1974.
II. There were two main objective of this plan i.e. growth with stability and progressive achievement of self reliance. 
III. During this plan the slogan of “Garibi Hatao” is given during the 1971 elections by Indira Gandhi.
IV. This plan failed and could achieve growth rate of 3.3% only against the target of 5.7%.

garibi hatao

6. Fifth Five Year Plan:
I. Its duration was 1974 to 1979.
II. In this plan top priority was given to agriculture, next came to industry and mines.
III. Overall this plan was successful which achieved the growth of 4.8% against the target of 4.4%.
IV. The draft of this plan was prepared and launched by the D.P. Dhar. This plan was terminated in 1978.

7. Rolling Plan: This plan was started with an annual plan for 1978-79 and as a continuation of the terminated fifth year plan.

8. Sixth Five Year Plan: 
I. Its duration was from 1980 to 1985.
II. The basic objective of this plan was poverty eradication and technological self reliance.
III. It was based on investment yojna, infrastructural changing and trend to growth model.
IV. Its growth target was 5.2% but it achieved 5.7%.

9. Seventh Five Year Plan:
I. Its duration was from 1985 to 1990.
II. Objectives of this plan include the establishment of the self sufficient economy, opportunities for productive employment.
III. For the first time the private sector got the priority over public sector.
IV. Its growth target was 5.0% but it achieved 6.0%.

Annual Plans: Eighth five Plan could not take place due to volatile political situation at the centre. So two annual programmes are formed in 1990-91& 1991-92.

Nature of Indian Economy: Structure and Key Features

10.  Eighth Five Year Plan:
I. Its duration was from 1992 to 1997.
II. In this plan the top priority was given to development of the human resources i.e. employment, education, and public health.
III. Duing this plan Narasimha Rao Govt. launched New Economic Policy of India.
IV. This plan was successful and got annual growth rate of 6.8% against the target of 5.6%.

11. Ninth Five Year Plan: 
I. Its duration was from 1997 to 2002.
II. The main focus of this plan was “growth with justice and equity”.
III. It was launched in the 50th year of independence of India.
IV. This plan failed to achieve the growth target of 7% and grow only at the rate of 5.6%.

12. Tenth Five Year Plan:
I. Its duration was from 2002 to 2007.
II. This plan aims to double the per capita income of India in the next 10 years.
III. It aims to reduce the poverty ratio 15% by 2012.
IV.  Its growth target was 8.0% but it achieved only 7.2%.

13. Eleventh Five Year Plan:
I. Its duration was from 2007 to 2012.
II. It was prepared by the C. Rangarajan.
III. Its main theme was “faster and more inclusive growth”
IV. Its growth rate target was 8.1% but it achieved only 7.9%

14.  Twelfth Five Year Plan:
I. Its duration is from 2012 to 2017.
II. Its main theme is “Faster, More Inclusive and Sustainable Growth”.
III. Its growth rate target is 8%.
IV. It is the current five year plan of India.

Five Year Plans after the Liberalization

Five Year Plans before the Liberalisation

Brief Introduction of All Five Year Plans of India (in Hindi)

1. First Five Year Plan:
I. It was made for the duration of 1951 to 1956.
II. It was based on the Harrod-Domar model.
III. Its main focus was on the agricultural development of the country.
IV. This plan was successful and achieved growth rate of 3.6% (more than its target)

2. Second Five Year Plan:
I. It was made for the duration of 1956 to 1961.
II. It was based on the P.C. Mahalanobis Model.
III. Its main focus was on the industrial development of the country.
IV. This plan was successful and achieved growth rate of 4.1%

All About First and Second Five Year Plans in India {1951 to 1961} (in Hindi)

Third Five Year Plan:
I. It was made for the duration of 1961 to 1966.
II. This plan is called ‘Gadgil Yojna’ also.
III. The main target of this plan was to make the economy independent and to reach self active position of take off.
IV. Due to china war, this plan could not achieve its growth target of 5.6%

Welfare Programmes by the Government of India

4. Plan Holiday:
I. The duration of plan holiday was from 1966 to 1969.
II. The main reason behind the plan holiday was the Indo-Pakistan war & failure of third plan.
III. During this plan annual plans were made and equal priority was given to agriculture its allied sectors and the industry sector.

5. Fourth Five Year Plan:
I. Its duration was from 1969 to 1974.
II. There were two main objective of this plan i.e. growth with stability and progressive achievement of self reliance. 
III. During this plan the slogan of “Garibi Hatao” is given during the 1971 elections by Indira Gandhi.
IV. This plan failed and could achieve growth rate of 3.3% only against the target of 5.7%.

All About Third and Fourth Five Year Plans in India {1961 to 1974} (in Hindi)

Fifth Five Year Plan:
I. Its duration was 1974 to 1979.
II. In this plan top priority was given to agriculture, next came to industry and mines.
III. Overall this plan was successful which achieved the growth of 4.8% against the target of 4.4%.
IV. The draft of this plan was prepared and launched by the D.P. Dhar. This plan was terminated in 1978.

7. Rolling Plan: This plan was started with an annual plan for 1978-79 and as a continuation of the terminated fifth year plan.

8. Sixth Five Year Plan: 
I. Its duration was from 1980 to 1985.
II. The basic objective of this plan was poverty eradication and technological self reliance.
III. It was based on investment yojna, infrastructural changing and trend to growth model.
IV. Its growth target was 5.2% but it achieved 5.7%.

All About Fifth and Sixth Five Year Plans in India {1974 to 1985} (in Hindi)

Seventh Five Year Plan:
I. Its duration was from 1985 to 1990.
II. Objectives of this plan include the establishment of the self sufficient economy, opportunities for productive employment.
III. For the first time the private sector got the priority over public sector.
IV. Its growth target was 5.0% but it achieved 6.0%.

Annual Plans: Eighth five Plan could not take place due to volatile political situation at the centre. So two annual programmes are formed in 1990-91& 1991-92.

Nature of Indian Economy: Structure and Key Features

10.  Eighth Five Year Plan:
I. Its duration was from 1992 to 1997.
II. In this plan the top priority was given to development of the human resources i.e. employment, education, and public health.
III. Duing this plan Narasimha Rao Govt. launched New Economic Policy of India.
IV. This plan was successful and got annual growth rate of 6.8% against the target of 5.6%.

11. Ninth Five Year Plan: 
I. Its duration was from 1997 to 2002.
II. The main focus of this plan was “growth with justice and equity”.
III. It was launched in the 50th year of independence of India.
IV. This plan failed to achieve the growth target of 7% and grow only at the rate of 5.6%.

All About Seventh,Eight and Ninth Five Year Plans in India {1985 to 2002} (in Hindi)

Tenth Five Year Plan:
I. Its duration was from 2002 to 2007.
II. This plan aims to double the per capita income of India in the next 10 years.
III. It aims to reduce the poverty ratio 15% by 2012.
IV.  Its growth target was 8.0% but it achieved only 7.2%.

13. Eleventh Five Year Plan:
I. Its duration was from 2007 to 2012.
II. It was prepared by the C. Rangarajan.
III. Its main theme was “faster and more inclusive growth”
IV. Its growth rate target was 8.1% but it achieved only 7.9%

14.  Twelfth Five Year Plan:
I. Its duration is from 2012 to 2017.
II. Its main theme is “Faster, More Inclusive and Sustainable Growth”.
III. Its growth rate target is 8%.
IV. It is the current five year plan of India.

Five Year Plans after the Liberalization

Five Year Plans before the Liberalisation

All About Tenth,Eleventh and Twelfth Five Year Plans in India {2002 to 2017} (in Hindi)

Indian economy objective questions answers mcq are important in ssc, upsc, ibps and competitive examination and entrance tests. 
Most Important MCQ of Economic Planning,NITI Aayog,Five Year Plans - Part 1

Most Important MCQ of Economic Planning,NITI Aayog and Five Year Plans Part-1 (in Hindi)

Indian economy objective questions answers mcq are important in ssc, upsc, ibps and competitive examination and entrance tests. 
Most Important MCQ of Economic Planning,NITI Aayog,Five Year Plans - Part 2

Most Important MCQ of Economic Planning,NITI Aayog and Five Year Plans Part-2 (in Hindi)

Indian economy objective questions answers mcq are important in ssc, upsc, ibps and competitive examination and entrance tests. 
Most Important MCQ of Economic Planning,NITI Aayog,Five Year Plans - Part 3

Most Important MCQ of Economic Planning,NITI Aayog and Five Year Plans Part-3 (in Hindi)

Indian economy objective questions answers mcq are important in ssc, upsc, ibps and competitive examination and entrance tests. 
Most Important MCQ of Economic Planning,NITI Aayog,Five Year Plans - Part 4

Most Important MCQ of Economic Planning,NITI Aayog and Five Year Plans Part-4 (in Hindi)

Indian economy objective questions answers mcq are important in ssc, upsc, ibps and competitive examination and entrance tests. 
Most Important MCQ of Economic Planning,NITI Aayog,Five Year Plans - Part 5

Most Important MCQ of Economic Planning,NITI Aayog and Five Year Plans Part-5 (in Hindi)

Indian economy objective questions answers mcq are important in ssc, upsc, ibps and competitive examination and entrance tests. 
Most Important MCQ of Economic Planning,NITI Aayog,Five Year Plans - Part 6

Most Important MCQ of Economic Planning,NITI Aayog and Five Year Plans Part-6 (in Hindi)

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Lessons

16 lessons • 2h 36m

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Meaning and Historical Background of Planning in India (in Hindi)

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Planning Commission,National Development Council and State Planning Boards (in Hindi)

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Difference Between Planning Commission and NITI Aayog

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All About NITI AAYOG and 15 years Plans instead of 5 year plans (in Hindi)

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Brief Introduction of All Five Year Plans of India (in Hindi)

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All About First and Second Five Year Plans in India {1951 to 1961} (in Hindi)

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All About Third and Fourth Five Year Plans in India {1961 to 1974} (in Hindi)

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All About Fifth and Sixth Five Year Plans in India {1974 to 1985} (in Hindi)

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All About Seventh,Eight and Ninth Five Year Plans in India {1985 to 2002} (in Hindi)

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All About Tenth,Eleventh and Twelfth Five Year Plans in India {2002 to 2017} (in Hindi)

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