•Program Planning and Implimentation-Historical Perspective of Planning in India.

- Managment .
•Program Planning and Implimentation-Historical Perspective of Planning in India.

1. Introduction

2. Objectives

3. Historical Background: Towards The Welfare State

4. Towards The Establishment Of The Planning Commission

5. Planning Commission (1950)

6. The National Development Council (1952) 7.

Indian Five Year Planning

8. Summary of Five Year Plans

9. Establishment of NITI ( National Institution for Transforming India) Aayog


10. Summary


In this module historical perspective of planning in India, our main focus would be to

study the history of planning in India and see how the process of planning developed its

roots in the country. In this module we will see that how planning in India gradually

evolved and institutionalized in the form of the Planning Commission and the National

Development Council. After that we will study different phases of planning in India, i.e. the first three Five Year Plans, Rolling Plans, and Plans after adopting New Economic

Policy. We will look at how the Indian state took up this challenge of rapid growth in

adverse circumstances. We will also see the aims and objectives of various plans and

their achievements over the time.


After going through this unit the learners will be able to:

1. Understand the growth and development of Indian planning system over a period

of time.

2. Identify major initiatives taken for development through five year planning in


3. Identify the socio economic and political dimensions of planning in India.

4. Differentiate between the planning system in pre independence and after

independence period.


In India, the significance of planning was recognized even before independence. Various

ideological perspectives were brought to influence on the efforts made at plan

formulation by a few individuals and institutions. Socio economic Planning has been one

of the most noteworthy inventions of the twentieth century. Even before independence

the nation was conscious about the significance of planned development. Prominent

public men like Dadabhai Naoroji (1825 - 1917), M. C. Ranade, (1842-1901), R. G. Dutt

(1848 - 1909) wrote extensively on the social and economic problems of the Indians.

During the long period of India’s struggle for freedom, the concern for the problems of

mass poverty, protection of the farmer and the artisan, the need for industrialization

and, the reconstruction of the entire fabric of social and economic life. Almost all the

national leaders looked upon political freedom primary as the means to solve these

fundamental problems. To Mahatma Gandhi freedom was not merely a political goal but

a pre requisite for relieving the masses from poverty and stagnation. The social and

economic aims of the struggle for freedom came to be precisely defined during nineteen



Starting from the Soviet experiment in 1928, planning slowly swept over almost two

third of the entire world. During 1930s the whole world was affected by great depression, only USSR was exempted from effects of this great depression. It was

because of their planning after that whole world was attracted towards USSR because of

its planning. Later on the resolutions of the Indian National Congress from 1929

onwards stressed the need for the revolutionary changes in the present economic

structure of society and removal of great inequalities in order to remove poverty and

improve the economic and social conditions of the masses.

First systematic work came into existence e in the year 1934 when the renowned

engineer and statesman M. Visvesvaraya formulated a ten year plan for economic

development of the country in his book “Planned Economy for India.” On the other hand

the Government of India Act – 1935, introduced provincial autonomy which led to the

formation of Congress Government in eight provinces. In August 1937 the Congress

Working Committee passed a resolution suggesting the committee of inter provincial

experts to consider urgent and vital problems, the solution of which is necessary to any

scheme of national reconstruction and social planning.


Planning, was first initiated in India in 1938 by Congress President and Indian National

Army supreme leader Netaji Subhash Chandra Bose ,later on Jawaharlal Nehru was

made head of the National Planning Committee. This was followed by the formulation of

National Planning Committee consisting of fifteen members, in a memorandum, the

Committee emphasized that the national independence is an indispensable primary

condition for taking all the steps that might be found necessary for carrying out the plan

in all its various aspects.

The setting up by the Indian National Congress of a National Planning Committee

towards the end of 1938 – nine years before independence – highlighted both the

importance of social and economic objectives as also need to profit from the experience

of planned development through national plans elsewhere. The National Planning

Committee appointed several sub committees to study different aspects of the national

economy. It was the first attempt on the part of the people of India to examine the

fundamental economic problems and draw up co – ordinate plan for upliftment of the


In September, 1939, a serious political crisis took place resulting in resignation by all

provincial Governments in eight States ‘en bloc.’ All the National leaders were kept in

jails. All the plans and schemes were shelved for the time being and between 1940- 45,

the committee had only a nominal existence. In 1945 when the leaders were released,steps were taken to revive the committee and new instructions were issued for bringing

its reports up to date. The National Planning committee could not hold formal meeting in

the following months though most of the sub committees submitted their respective

reports. Thus the work of the committee came to an end. During this period, a separate

department of Planning and Development was established with Sir Ardeshir Dalal as a

member in charge. Panels were constituted for the development of basic and important

consumer goods industries. Similarly, post Second World War committee was constituted

under the chairmanship of Sir Ramaswami Mudaliar.


In the early 1944, several eminent industrialists and economists of Bombay Sir

Purshottamdas Thakurdas, Mr. J.R.D. Tata and six others made another attempt and

published a development plan, which was called Bombay plan. Its main purpose was to

stimulate the thinking of the people and to lay down the principles on the basis of which

a national plan could be formulated and executed. The planners observed that the plan

set out in it is neither in any sense a complete scheme nor as comprehensive as that of

the National Planning committee.

The central aim of the plan was to raise the national income to such a level that after

meeting the minimum requirements of every individual we would be left with enough

resources for the enjoyment of life and for cultural activities.” Thus its objective was at

doubling the per capita income in the country over a period of 15 years. It proposed the

increase of about 130 per cent and 500 percent, in agriculture and industry respectively.

The total outlay of Rs. 10,000 crores was recommended. The planners believed that this

could be achieved only by reducing the overwhelming predominance of agriculture and

by establishing a balanced economy. This plan was the systematic scheme of economic

planning which made the country plan-minded. Its major shortcoming was of

maintenance of a capitalist order and giving step-motherly treatment to agriculture



Gandhian Plan which based upon Gandhian philosophy was put forward by Shri S.N.

Agarwal of Wardha. The outlay of the plan was estimated Rs. 3500 crores only and it

sought to set up a decentralized economy with self sufficient villages and Industrial

production. It laid emphasis on small scale industries and agriculture. But its scheme of

financing was unsound. This plan was criticized as inconsistent and insufficient.


Another plan was prepared by the late M.N. Roy (a ten year plan) called the ‘People

Plan.’ It was different from the Bombay plan in methodology and priorities. Its chief

emphasis was on agricultural and consumer goods industries through collectivization and

setting up of sate owned industrialization. The total outlay was of Rs. 15000 crores. It

also advocated the nationalization of land. The plan was ambitious as it could not

properly mobilize the resources. Therefore, it was totally impracticable.


The government of India seriously considered the plans for the post war reconstruction

during June, 1941and appointed a reconstruction committee of the cabinet with Viceroy

as Chairman and the members of the Executive Council as Members. In June, 1944

Planning and Development Department was created under a separate member of the

Executive Council for organizing the planning work in the country. To assist the

department, there was a Planning and Development Board consisting of Secretaries of

economic department. It suggested to State Governments that special priority should be

given to schemes for training technical personnel. In 1946 the work of planning had

practically been completed and the department of planning and development was



The interim Government was installed on 24th August, 1946 and the Advisory Planning


The Board submitted its report in January, 1947. Its major recommendations were:

a) The increase in production that is essential could be secured only through a well

considered plan.

b) There must be control on the use of energy sources, control over distribution and

price and as well leases and sub leases.

c) Mineral rights in the permanently settled areas in Bengal and Bihar should be

acquired by the state.

For future Planning organizations, the Board suggested the setting up of single compact

organization. As regard the composition of the Planning Commission it was

recommended that the Chairman should be a senior minister, holding no portfolio. No minister should be a member of the Planning Commission and that it should be, as far as

possible, a non political Commission consisting of five members.

It also recommended a consultative body of 25 to 30 members which would meet half

yearly or quarterly to advice on problems and receive progress reports. Its

recommendations were feasible and reasonable but still it also suffered from limitations.

After independence the plan became inadequate as a result of the changed social and

economic conditions due to partition. Even then its recommendations on techniques

were supposed to be worthwhile.


COMMISSION (1947-50)

At the down of the 15th August, 1947, India was free from the British Imperial Rule. The

Constitution of India came into force on 26th January 1950. The Constitution contained

certain ‘Directive Principles of State Policy’, which, though not enforceable through the

court of law but were regarded but were regarded as fundamental to the governance of

the country. The working Committee of the Congress Party passed a comprehensive

resolution on planned economy for the country and the appointment of the Planning

Commission. The resolution states “ The need for a comprehensive plan has become a

matter of compelling urgency in India now owing to the ravages of Second World War

and the economic and political consequences of the partition of the country which

followed in the wake of achievement of freedom and steady worsening of the economic

situation in India and the World. ” Thus the National Planning Commission was

established on 15th March, 1950.


India has adopted a path of development, which is known as Socialist Path and Mixed

Economy, On the one hand, India has encouraged private business and industry and on

the other it has almost full control, at least in principle, over all the major

entrepreneurial and business activities. The Planning Commission was set up by a

Resolution of the Government of India 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 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. It was entrusted with

the work of economic and social development as envisaged in the preamble, the

fundamental rights as well as Directive Principles of State Policy of the Constitution


It is the apex body for decision making and deliberations on development matters

in India, presided over by the Prime Minister. It was set up on 6 August 1952 to

strengthen and mobilize the effort and resources of the nation in support of the Plan, to

promote common economic policies in all vital spheres, and to ensure the balanced and

rapid development of all parts of the country. The Council comprises the Prime Minister,

the Union Cabinet Ministers, Chief Ministers of all States or their substitutes,

representatives of the Union Territories and the members of the Planning Commission. It

is an extra-constitutional and non-statutory body.


The first Five-year Plan was launched in 1951 and two subsequent five-year plans were

formulated till 1965, when there was a break because of the Indo-Pakistan Conflict. Two

successive years of drought, devaluation of the currency, a general rise in prices and

erosion of resources disrupted the planning process and after three Annual Plans

between 1966 and 1969, the fourth Five-year plan was started in 1969. The central

importance assigned to the public sector was assigned was first articulated in the

Industrial Policy Resolution in 1956.and subsequently documented in the second five

year plan in 1956.

The Eighth Plan could not take off in 1990 due to the fast changing political situation at

the Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The

Eighth Plan was finally launched in 1992 after the initiation of structural adjustment


For the first eight Plans the emphasis was on a growing public sector with massive

investments in basic and heavy industries, but since the launch of the Ninth Plan in

1997, the emphasis on the public sector has become less pronounced and the current

thinking on planning in the country, in general, is that it should increasingly be of an

indicative nature.


Fourth Plan

  • (1969 - 74)

  • Target Growth: 5.7%

  • Actual Growth: 3.30%

  • Slogan of “Garbi Hatao” was given in 1971

  • Emphasis was on growth rate of agriculture to enable other

  • sectors to move forward.

  • First two years of the plan saw record production. The last three

  • years did not measure up due to poor monsoon.

  • Influx of Bangladeshi refugees before and after 1971 Indo-Pak

  • war was an important issue

Fifth Plan

  • (1974-79)

  • Target Growth: 4.4%

  • Actual Growth: 3.8

  • The fifth plan was prepared and launched by D.D. Dhar.

  • It proposed to achieve two main objectives: 'removal of poverty'

  • (Garibi Hatao) and 'attainment of self reliance'

  • Promotion of high rate of growth, better distribution of income

  • and significant growth in the domestic rate of savings were seen

  • as key instruments.

  • The plan was terminated in 1978 (instead of 1979) when Janta

  • Party Govt. rose to power

Rolling Plan

(1978 - 80)

  • There were 2 Sixth Plans. Janta Govt. put forward a plan for

  • 1978-1983. However, the government lasted for only 2 years.

  • Congress Govt. returned to power in 1980 and launched a different plan.

Sixth Plan

  • (1980 - 85)

  • Target Growth: 5.2%

  • Actual Growth: 5.66%

  • Focus - Increase in national income, modernization of

technology, ensuring continuous decrease in poverty and unemployment, population control through family planning, etc.

Seventh Plan

  • (1985-90)

  • Target Growth: 5.0%

  • Actual Growth: 6.01%

  • Focus - rapid growth in food-grains production, increased

  • employment opportunities and productivity within the framework

    of basic tenants of planning.

  • First time private sector got the priority over public sector

  • The plan was very successful, the economy recorded 6% growth

    rate against the targeted 5%.

Eighth Plan

  • (1992 - 97)

  • Target growth:5.6%

  • Actual growth:6.8%.

  • Focus on “Human Resource Development”

  • The eighth plan was postponed by two years because of political

    uncertainty at the Centre .

  • Worsening Balance of Payment position and inflation during

1990-91 were the key issues during the launch of the plan.

  • The plan undertook drastic policy measures to combat the bad

economic situation and to undertake an annual average growth

of 5.6%.

  • Some of the main economic outcomes during eighth plan period

were rapid economic growth, high growth of agriculture and

allied sector, and manufacturing sector, growth in exports and

imports, improvement in trade and current account deficit.

Ninth Plan

  • (1997- 2002)

  • Target Growth: 6.5%

  • Actual Growth: 5.35%

  • Aim was “Growth with Social Justice”

  • It was developed in the context of four important dimensions:

  • Quality of life, generation of productive employment, regional

    balance and self-reliance.

Tenth Plan

  • (2002 - 2007)

  • Target growth: 8.1%

  • Growth

  • achieved:7.7%

  • Plan aim at ”Double the Per Capita Income” in the next 10 years

  • To achieve 8.1% GDP growth rate

  • Reduction of poverty ratio by 5 percentage points by 2007.

  • Providing gainful high quality employment to the addition to the

    labour force over the tenth plan period.

  • Reduction in gender gaps in literacy and wage rates by atleast

    50% by 2007.

  • Increase in literacy rate to 72% within the plan period and to

    80% by 2012.

  • Reduction of Infant Mortality Rate (IMR) to 45 per 1000 live

    births by 2007 and to 28 by 2012.

  • Increase in forest and tree cover to 25% by 2007 and 33% by 2012.

  • Cleaning of all major polluted rivers by 2007 and other notified

    stretches by 2012.

Eleventh Plan

  • (2007 - 2012)

  • Target growth: 8.1%

  • Growth

  • achieved:7.9%

  • Twelfth Plan focuses “Faster and more Inclusive Growth”.

  • Prepared by C Rangarajan to:

  • Accelerate GDP growth from 8% to 10%. Increase agricultural

    GDP growth rate to 4% per year.

  • Create 70 million new work opportunities and reduce educated

    unemployment to below 5%.

  • Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to

    950 by 2016-17.

  • Ensure direct and indirect beneficiaries of all government

    schemes are women and girl children

  • Connect every village by telephone and provide broadband

    connectivity to all villages

  • Attain WHO standards of air quality in all major cities by 2011-12.

  • Increase energy efficiency by 20 percentage points by 2016-17.

Twelfth Plan

  • (2012 - 2017)

  • Target Growth :8%

  • Twelfth Plan focuses “Faster and more Inclusive and Sustainable Growth”.

  • Poverty rate to be reduced by 10% than the rate at the end of11th plan.

  • End gender gap and social gap in school enrollment.

  • Reduce under nutrition of children in age group 0-3 to half of NFHS-3 levels.

  • Increase green cover by 1 million hectare every year.

  • Increase renewable energy during Five Year Period.

Establishment of NITI ( National Institution for Transforming India) Aayog (2014)

Planning in India was carried by the Planning Comission (1950 - 2014) and the NITI (

National Institution for Transforming India) Aayog (2014 - 2017). With the Prime

Minister as the ex-officio Chairman, the commission has a nominated Deputy Chairman,

who holds the rank of a Cabinet Minister. Montek Singh Ahluwalia is the last Deputy

Chairman of the Commission , resigned on 26 May 2014. The Eleventh Plan completed

its term in March 2012 and the Twelfth Plan is currently underway. Prior to the Fourth

Plan, the allocation of state resources was based on schematic patterns rather than a

transparent and objective mechanism, which led to the adoption of the Gadgil Formula in

1969. Revised versions of the formula have been used since then to determine the

allocation of central assistance for state plans. The new government led by Narendra Modi, elected in 2014, has announced the dissolution of the Planning Commission, and

its replacement by a think tank called the NITI Aayog.


In this chapter we discussed historical perspective of planning in India. It begins by

looking at the trends in India in British period and after independence. We saw that how

the importance was realized that for the country to grow and in any respect it is

important that people are involved in the development process. Therefore greater

emphasis was given to decentralization. It was also highlighted that in the market

economy which is becoming increasingly integrated with the world. Planning is bound to

be different which was used to be in the earlier years. Much of what used to be done by

governments is now being done by the private sector. However this does not mean that

the role of the government must shrink. The growth and development of the country

cannot be left entirely to the market mechanism on the contrary the government must

play a much larger role in some areas even while shifting out the others.

Achievements of Five Year Plan are Impressive industrialization in capital goods sector

through public sector. Development of economic infrastructure like energy, irrigation,

roads, transport and communication. Diversification of export and import substitution.

Rise in life expectancy and rise in literacy level. Development of science & technology

and the nuclear power for peaceful purposes. Increasing national income and improving

average standard of Living of the people. Achieving self reliance so as to minimize

dependence on foreign aid. Increasing pace of industrialization of both basic and heavy

industries. Narrowing down both vertical and horizontal inequalities. Increasing

employment potential of various sectors. Failures of Five Year Plans are like social

inequality, failure of land reforms, unbalanced regional growth, corruption, black money,

and many social problems. In 2014 government decided to wind down the Planning

Commission. It was replaced by the newly formed NITI Ayog.

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