Economic Planning In India

SARBJEET KAUR Lecturer in EconomicsGCCBA-42, Chandigarh

Meaning

• Economic planning refers to interventionists economics activities by the Government aimed at directing the economy (such as taking measures to influence production).

History of Planning in India

• First attempt to initiate economic planning in India was made by Sir M. Visvesvarayya, a noted engineer and politician, in 1934 through his book, ‘Planned Economy for India’.

• In 1938, ‘National Planning Commission’ was set – up under the chairmanship of JL Nehru by the Indian National Congress. Its recommendations could not be implemented because of the beginning of the Second World War and changes in the Indian political situation.

• In 1944, ‘Bombay Plan’ was presented by 8 leading industrialists of Bombay.

• In 1944, ‘Gandhian Plan’ was given by S N Agarwal.• In 1945, ‘People’s Plan’ was given by M N Roy.• In 1950, ‘Sarvodaya Plan’ was given by J P Narayan. A few points of

this plan were accepted by the Government.

The Planning Commission of India• The Planning Commission was set – up on March 15,

1950 under the chairmanship of JL Nehru, by a resolution of Union Cabinet.

• It is an extra – constitutional, non – statutory body.• It consists of Prime Minister as the ex – officio

Chairman, one Deputy – Chairman appointed by the PM and some full time members.

• The tenure of its members and deputy chairman is not fixed. There is no definite definition of its members also. They are appointed by the Government on its own discretion. The number of members can also change according to the wishes of the Government.

Functions Economic System

• Assessment of material, capital and human resources of the country.

• Formulation of plans for the most effective and balanced utilization of country’s resources.

• To determine the various stages of planning and to propose the allocation of resources on the priority basis.

• To act as an advisory body to the Union Government.• To evaluate from time to time the progress achieved in

every stage of the plan and also to suggest remedial measures.

• To advise the Centre and the State Governments from time to time on special matters referred to the Commission.

National Development Council India

• All the plans made by the Planning Commission have to be approved by National Development Council first. It was constituted to build co – operation between the States and the Planning Commission for economic planning.

• It is an extra – constitutional and extra – legal body.• It was set – up on August 6, 1952, by a proposal of the

Government. The PM is the ex – officio chairman of NDC. Other members are Union Cabinet Ministers, Chief Ministers and Finance Ministers of all States, Lt. Governors of Union Territories and Governors of Centrally – ruled States.

Plans period

• 1 First Five-Year Plan, 1951–1956• 2 Second Five-Year Plan, 1956–1961• 3 Third Five-Year Plan, 1961–1966• 4 Fourth Five-Year Plan, 1969–1974• 5 Fifth Five-Year Plan, 1974–1979• 6 Sixth Five-Year Plan, 1980–1985• 7 Seventh Five-Year Plan, 1985–1990• 8 Period between 1989–1991• 9 Eighth Five-Year Plan, 1992–1997• 10 Ninth Five-Year Plan, 1997–2002• 11 Tenth Five-Year Plan, 2002–2007• 12 Eleventh Five-Year Plan, 2007–2012• 13 Eleventh Five Year Plan, 2012-2017

Features of Planning

• Democratic• Different sectors• Existence of central plan and state plan• Financial planning• Unchanging priorities• Prospective and persepective planning• Central planning authority

• Set objectives• Government control• Complete development• Definite time period• Slogans

Objective of planning

• Increase in National income and PCY• Reduction In Inequalities• Reduction of regional Inequalities• Price stability• Economic development • Employment generation

• Full utilization of resources• Self Sufficiency• Re construction • Social security• Increase in capital formation• Infrastructural development• Modernisation

progress

• Increase In National income • Increase in PCY• Increase in capital formation• Institutional reforms in agriculture• Development of Industries• Development of infrastructure• Development of social services

• Increase in employment• Modernization• Export promotion , diversification • development of Science and technology• Structural and institutional changes• Balanced growth

Failure

• No substantial Increase in the standard fof living

• Inflation • Unemployment• Less growth in agriculture • Inequalities of y and Growth • Inefficient administration

• Shortfall in target realization• Slow capital formation• Unbalanced growth• Poor development of infrastructure • Loop sided industrial growth