Back Ground of Planned Development in India, Planning Commission and National Development Council

This article gives you crisp information on background of Planned Development in India, Planning Commission and National Development Council.

Perspective Planning, Imperative & Indicative Planning

Perspective planning refers to long term planning for a period of 15, 20, 25 yrs, however objective of perspective planning can be achieved by breaking the period in 5-7 yr plans. Comprehensive or imperative planning is used by socialist countries and each and every aspect of planning is controlled by state. Indicative planning is flexible. It is peculiar to mixed economy and both the public and private sector co exist. Indicative planning was first used by France in 1947-50.

Centralized and Decentralized Planning

Planning can also be divided into centralized and decentralized categories. In centralized planning there is one central authority which formulates the plan, targets and priorities for every sector of economy. In decentralized planning execution of the plan is from grass roots, i.e. district, block, village etc.

Theory of Karl Marx

Karl Marx was the first to lay down the theoretical basis of socialism. According to him private ownership of means of production must be abolished to end exploitation from the world. Soviet Union was the first to adopt planning on this basis.

National Planning Committee

In India, First of all the idea of planned economy crystallized in 1930s when our national leaders came under the influence of socialist philosophy. M. Visvesvarayya who was a civil engineer and Dewan of Mysore published his book “Planned economy in India”. In this book he presented a constructive draft of the development of India in 10 years. He actually laid a plan to shift labor from agriculture to industries and double up National income in 10 years.
1938 was the year that witnessed the first attempt to develop a national plan for India when National Planning Committee was set up. This committee was set up by Subhash Chandra Bose and chaired by Jawaharlal Nehru. 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 including 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” which was popularly known as Bombay PlanThis plan envisaged doubling the per capita income in 15 years and tripling the national income during this period. However Pundit ji did not officially accept the plan, yet many of the ideas of the plan were inculcated in other plans which came later.

Ardeshir Dalal

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. 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.

Peoples’  Plan

People’s Plan also came out during that era which was based upon Marxist socialism and drafted by M N Roy on behalf of the Indian federation of Lahore. It called for nationalization of all agricultural production and distribution besides development of consumer goods industries by the state only.

Gandhian Plan

Another plan called as Gandhian Plan was put forward by Shriman Narayan Aggarwal in 1944 who was principal of Wardha Commercial College. It was a modest kind of plan.

Sarvodaya Plan

In 1950 Sarvodaya Plan came out which was drafted by Jaiprakash Narayan inspired by Gandhian plan as well as Sarvodaya Idea of vinoba bhave. Along with agriculture it emphasized on small and cotton industries as well. It also suggested the freedom from foreign technology and stressed upon land reforms and decentralized participatory planning.

Economic Programme Committee

In 1947, after India got independent, Economic Programme Committee (EPC) was formed by All India Congress Committee and Pandit Ji was its chairman. The aim of this committee was the make a plan which could balance private and public partnership and urban and rural economies. The EPC recommended in 1948 forming of permanent planning commission.

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.

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. Jawaharlal Nehru was the first Chairman of the Planning Commission.

First Five Year Plan

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 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 policies.

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.
Concept of Democratic Socialism

Pandit Nehru was greatly influenced by the achievements of Soviet Planning; however he also viewed democratic qualities of capitalism as indispensable for complete economic and social growth. He wished to take advantage of both and thus came out his vision of “Democratic Socialism” for new India. The idea was to not only check the growth of monopolistic tendencies of the private sector but also provide freedom to the private sector to play for main objective of social gain rather than economic gain.

The Prime Minister of India is the ex-officio Chairman of the planning commission and there is a deputy chairman who coordinates between the work of the commission and government.

Originally there was a provision of 3 union ministers to be appointed as Ex-officio members of the planning commission however from 2004 this number was increased to 6.

The commission plays an integrative role in the development of a holistic approach to the policy formulation in critical areas of human and economic development.
How a plan is formed?

First step is to prepare an approach paper. After it is ready it goes to National Development Council. After it is approved by NDC, Planning commission makes Draft Plan. The plan is placed in the parliament and when parliament passes it, the plan becomes effective.

National Development Council

NDC was set up in August 1952 by a cabinet secretariat resolution. It is a extra constitutional body which consists of Prime Minster, Chief ministers of states, members of planning commission and since 1967 the members of the Union Cabinet and administrators of Union Territories.

NDC Considers the Proposals formulated for plans at all important stages and accepts them. Consider the social and economic policy and its effect on national development and ensure fullest development of rural and backward areas of the nation.

NDC had not much importance in Nehru Era but got importance after 1990. Similarly decentralization also got importance after 73rd and 74th Constitutional Amendments which made decentralization a constitutional imperative.


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    January 1, 2015 at 4:40 pm

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  5. Avinash

    January 2, 2015 at 7:38 am

    Very useful topic.

  6. kapilpandey

    January 2, 2015 at 9:31 am

    Sir…thanku so much ..gk today is best.but I am facing problem in understand ing concepts of hedge .,GDP,gnp,percapita income n economics subject…which book should I read??plz help me

    • ruby yadav

      January 3, 2015 at 12:59 pm

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  7. Subhash

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