Planning Commission of India

• Government undertakes planning to effectively allocate resources
• India's planning history predates the Planning Commission
• M. Visvesvaraya introduced the concept of planning in his 1934 book "Planned Economy for India"

Origins of Planning in India

• Eight leading industrialists created a plan for India's economic development in 1944-45 called the 'Bombay Plan'
• The Sarvodaya Plan was prepared by Jayaprakash Narayan in 1950
• Keshi Neogi wanted to import the planning system from the Soviet Union
• Planning was added to the Concurrent List
• The Planning Commission was established on March 15, 1950, following their recommendations, which are non-constitutional

Establishment and Functions of the Planning Commission

• The Planning Commission was formed on March 15, 1950, inspired by the Russian constitution
• On January 1, 2015, the Planning Commission was replaced by NITI Aayog (National Institution for Transforming India)
• The primary task for the Planning Commission was to formulate the Five-Year Plans
• The Prime Minister serves as the Chairman of the Planning Commission
• 12 Five-Year Plans have been created

National Development Council (NDC)

• The NDC was established on August 6, 1952
• Consists of the Prime Minister as its Chairman, all state Chief Ministers, and members of the Planning Commission
• Approves the Five-Year Plans
• Both the Planning Commission and the National Development Council are non-constitutional bodies created after the constitution was written; thus, they are called extra-constitutional bodies
• The Planning Commission is considered a super cabinet

Main Objectives of Economic Planning

• Accelerated economic development
• Social fairness
• Full employment
• Poverty reduction and creation of job opportunities
• Achieving self-sufficiency
• Investment and capital creation
• Equitable distribution of income and reduced regional disparities
• Modernization
• Human resource development
• Protecting the poor during privatization, liberalization, and globalization
• Inclusive development alongside rapid economic growth
• Sustainable development

First Five-Year Plan (1951-1956)

• Focused on increasing agricultural production using the Harrod-Domar model
• Agricultural production more than doubled
• Major multipurpose river projects like Bhakra Nangal, Damodar Valley, and Hirakud were initiated
• Top priority was given to the development of the agricultural sector
• Aimed at correcting the imbalances caused by the country's partition and war

Second Five-Year Plan (1956-1961)

• Based on the P.C. Mahalanobis model, focused on establishing Indian industries
• Heavy borrowing from foreign sources for the establishment of heavy industries which led to the plan being seen as unsuccessful
• Major steel plants were established, including Rourkela (Odisha) with German collaboration, Bhilai (Chhattisgarh) with Soviet Union collaboration, and Durgapur (West Bengal) with U.K collaboration
• Emphasized rapid industrialization, particularly in basic and heavy industries
• Aims were large-scale job creation, reducing income and wealth inequality, and promoting a more equitable distribution of economic power
• The Bokaro Steel Plant in Jharkhand was initiated with USSR collaboration

Third Five-Year Plan (1961-1966)

• Aims were to boost both agriculture and industry, but was considered the most unsuccessful plan
• Goals were to create an independent and self-generating economy, achieve self-sufficiency in food production, and to boost agricultural production to meet the requirements of industries and exports
• Expand basic industries like steel, chemicals, fuel, and electricity, and developing machine-manufacturing capabilities
• Effective use of the nation's human resources and creation of employment opportunities
• The plan failed because of the 1962 war with China after which Nehru died, the 1965 war with Pakistan, and the severe drought of 1966
• Lal Bahadur Shastri gave the slogan "Jai Jawan Jai Kisan"

Plan Holiday (1966-1969)

• No new plan was initiated for three years
• Due to the 1965 war with Pakistan, severe droughts for two consecutive years, currency devaluation, rising prices of consumer goods, and insufficient resources for planning
• Instead of finalizing the Fourth Five-Year Plan, three annual plans were created between 1966 and 1969

Green Revolution

• Started at the end of the Third Five-Year Plan in 1966
• Norman Borlaug, an American scientist, is known as its global pioneer
• Swami Nathan is considered the father of the Green Revolution in India
• The term "Green Revolution" was coined by William Gaud
• Involved the use of high yield variety (HYV) seeds.

Fifth Five-Year Plan (1974-78)

• Primary objective was poverty eradication, including the launch of the 20-point program to alleviate poverty
• Regional Rural Banks were established in 1975
• The Janata Party government terminated the plan one year early
• Key objectives were 'Garibi Hatao' (Eradicate Poverty) and achieving self-reliance
• The slogan "Garibi Hatao" was given for the first time in this plan
• Fair wage policy adopted

Rolling Plan (1978-80)

• Initiated by the Janata Party government and based on the Gandhian model
• DDT Lakdawala formulated this plan
• The concept of Rolling Plan was introduced