Economic Planning in India

● Economic planning is a systematic approach aimed at

achieving specific economic development goals within a
defined timeframe. In India, the concept of economic
planning has played a pivotal role in shaping the nation's
growth trajectory. Let's explore the evolution of
economic planning in India and the key milestones in
this journey:
 Early Efforts in Economic Planning
1. Sir M. Visvesvaraya (1934): In 1934, the renowned
engineer and politician, Sir M. Visvesvaraya, made an early
attempt to lay the foundation for economic planning in
India with his book, "Planned Economy of India," outlining
a ten-year plan.
2. Jawaharlal Nehru (1938): In 1938, Jawaharlal Nehru
initiated the idea of a "National Planning Commission."
However, due to political changes and the outbreak of
World War II, this proposal did not come to fruition.
 Early Efforts in Economic Planning
3. Bombay Plan (1940): A significant step in economic
planning was the presentation of the "Bombay Plan" by
eight leading industrialists from Bombay. This plan
outlined a 15-year investment strategy for India's
development.
4. S. N. Agarwal (1944): S. N. Agarwal proposed the
"Gandhian Plan," which emphasized agricultural and rural
economic development.
5. M. N. Roy (1945): M. N. Roy drafted the "People's Plan,"
focusing on the mechanization of agricultural production
and distribution under state control.
 Early Efforts in Economic Planning
6. J.P. Narayan (1950): J.P. Narayan advocated the
"Sarvodaya Plan," inspired by the Gandhian Plan, which
promoted not only agriculture but also small and cottage
industries.
 The Planning Commission Era:

• Formation of the Planning Commission:

The Planning Commission was established
on March 15, 1950, and marked the
beginning of the planned era in India. It was
instrumental in shaping the country's
economic development.
• Jawaharlal Nehru as Chairman:
Jawaharlal Nehru served as the first
Chairman of the Planning Commission,
guiding the nation through its initial
stages of planned economic
development.
 India's Five-Year Plans:

• The Concept of Five-Year Plans: The

concept of economic planning in India,
including the five-year plans, was influenced
by the Soviet model.
• Twelve Five-Year Plans: India has
implemented 12 five-year plans to date, with
the twelfth being the last one in the series.
• Replacement by NITI Aayog: The
government decided to discontinue the
traditional five-year plans, replacing the
Planning Commission with the NITI Aayog on
January 1, 2015.
• First Five-Year Plan (1951-1956): Based on the
Harrod-Domar Model, the plan focused on
agricultural development and initiated major
irrigation projects, such as the Bhakra-Nangal
Dam and Hirakud Dam.
• Second Five-Year Plan (1956-1961): Built on
the P.C. Mahalanobis Model, it emphasized
industrial development and led to the
establishment of steel plants in Bhilai, Durgapur,
and Rourkela.
• Third Five-Year Plan (1961-1966): Known as
the 'Gadgil Yojna,' this plan aimed to make India
self-reliant. However, it faced challenges due to
the Indo-China war.
• Fourth Five-Year Plan (1969-1974): Focused
on achieving growth with stability and saw the
nationalization of fourteen major Indian banks.
• Fifth Five-Year Plan (1974-1979): Gave
priority to agriculture, poverty alleviation, and
self-reliance, achieving a growth rate of 4.8%.
• Rolling Plan (1978-1980): Intervened between
the termination of the fifth five-year plan and
the launch of the sixth plan, with shifting
political scenarios.
• Sixth Five-Year Plan (1980-1985): Emphasized
poverty eradication, technological self-reliance,
and socio-economic development in rural areas.
• Seventh Five-Year Plan (1985-1990): Focused
on rapid food grain production, increased
employment, and productivity, with the launch
of the Jawahar Rozgar Yojana.
• Eighth Five-Year Plan (1992-1997): Prioritized
human resource development, introduced the
New Economic Policy, and achieved a growth
rate of 6.8%.
• Ninth Five-Year Plan (1997-2002): Aimed at
growth with justice and equity, with a focus on
agriculture, rural development, and poverty
alleviation.
• Tenth Five-Year Plan (2002-2007): Aims
included doubling per capita income, reducing
poverty, and emphasizing the social sector.
• Eleventh Five-Year Plan (2007-2012): Focused
on 'faster and more inclusive growth,' targeting
a growth rate of 10 percent.
• Twelfth Five-Year Plan (2012-2017):
Emphasized faster, more inclusive, and
sustainable growth, with specific goals like
providing electricity to all villages and ensuring
access to banking services for 90% of Indian
households.
NITI Aayog (2015): Formed on January 1, 2015, as a policy think-tank, NITI Aayog
replaced the Planning Commission and plays a crucial role in shaping India's policies
and monitoring their implementation.

Key Functions of NITI Aayog:

1. Cooperative and Competitive Federalism: Promotes active state participation in

national policy formulation.
2. Decentralized Planning: Fosters bottom-up planning models.
3. Vision and Scenario Planning: Designs long-term strategic frameworks for India's
future.
4. Internal Consultancy: Provides expert advice to central and state governments on
policies and programs.
5. Monitoring and Evaluation: Oversees policy implementation and evaluates its
impact.
Q1. The consumption of fixed capital is also known as
(a) gross investment
(b) net investment
(c) appreciation
(d) depreciation
Q2. Machines, tools and implements, and buildings are examples of which
type of goods?
(a) Inferior goods
(b) Intermediate goods
(c) Consumer goods
(d) Capital goods
Q3. An annual statement of the estimated receipts and expenditure of the government over the
fiscal year is known as
(a) Plan
(b) Budget
(c) Account
(d) Income sheet

Q4. Consider the following statements about unemployment in India:

a) Seasonal unemployment is mainly found in urban areas.
b) Educated unemployed people are mainly found in rural areas of India.

c) Higher cropping intensity is desirable for reducing unemployment in the rural economy.

Which of the given statements is/are correct?

(a) Only a
(b) Only b land c
(c) Only a and b
(d) Only c
Q5. Which of the following is NOT a function of money?
(a) Medium of exchange
(b) Standard of deferred payments
(c) Measure of value
(d) Problem in storage

Q6. Who is known as the father of the green revolution in the world?
(a) Ralph Bunche
(b) Norman Borlaug
(c) MS Swaminathan
(d) Linus Pauling
Q7. Which of the following can be referred to in the estimation of poverty?
(a) Minimum Support Price
(b) Maximum Support Value
(c) Average Marginal Utility
(d) Monthly Per Capita Expenditure

Q8. Which of the following is NOT included in capital receipts?

(a) Recovery of loans
(b) Borrowings
(c) Taxes
(d) Foreign aid
Q9. Which of the following is NOT an example of factor payment?
(a) Interest
(b) Rent
(c) Wages
(d) Pension
Q10. Non-Tax revenue is part of
(a) Capital Receipts
(b) Capital Expenditure
(c) Revenue Expenditure
(d) Revenue Receipts
Q11. The term of trade refers to
(a) the terms and conditions on which a country is offered loan

(b) the excess of import expenditures over export earnings

(c) the trade agreements
(d) the ratio between export prices and import prices

Q12. Which of the Five-Year Plans was prepared and launched by DP Dhar?
(a) Sixth Five-Year Plan

(b) Fifth Five-Year Plan

(c) Fourth Five-Year Plan

(d) Seventh Five-Year Plan

Q13. Which five year plan aimed to increase the rapid growth in food grains
production?
(a) Sixth Five Year Plan
(b) Eighth Five Year Plan
(c) Fifth Five Year Plan
(d) Seventh Five Year Plan
Q14. In the self-help group, the loan and saving decisions are taken by the
(a) group members
(b) non-government organization
(c) bank
(d) government
Q15. Small scale units are differentiated from large scale units on the basis
of:
(a) the size of unit area
(b) the amount of investment
(c) the volume of output.
(d) the volume of sales
Thank you. Please feel free to ask any questions. 😄