Planning in India
Planning is a scheme of economic organization in which individual and separate plants, enterprises, and industries are treated as coordinate units of one single system for the purpose of utilizing available resources to achieve the maximum satisfaction of the people’ s needs within a given time
Types of planning
There are different types of Planning
1.Imperative Planning-
- In this type of planning, economic decisions are made through a central planning authority instead of a market system.
- There is absence of institutions of private property.
- The goals and strategies of the economy are decided by the state and not by the consumers.
2.Indicative planning-
- It recognizes not only consumers sovereignty but also producer’s freedom so that the targets and priorities of the plans are achieve.
- It includes both Private and Public body in the process of Planning.
- This type of planning is followed in India.
3.Rolling Plans & Fixed Plans-
Rolling Plans-
- In Rolling Plan every year the performance of the plan is assessed and a new plan is made next year based upon this assessment.
- In the rolling plans there are three kind of plans.
- First is the plan for the current year which comprises the annual budget.
- Second is a plan for a fixed number of years, which may be 3, 4 or 5 years.
- Third is a perspective plan which is for 10, 15 or 20 years.
Fixed planning-
- In Fixed planning Goals and targets are set up for fixed period of time like 5 years ,6 years etc.
4.Long term & Short term planning-
- Short term planning refers to planning for short period of time like 1 year,2 year etc. And vice-versa for Long term Planning.
5.Centralized and Decentralized planning
Centralized planning-
- In Centralized planning majority of decisions are taken at single level for example in India Centre government takes some of the decisions without involving state governments.
Decentralized planning
- In this types of Planning there is involvement of all types of stakeholders like state and even district level authorities.
Objectives of Planning-
- To increase the employment in the country and effectively utilizing the demographic dividend of the country.
- To remove the socio-economic problems such as poverty and inequalities.
- Enhancing the Development of basic infrastructure like Roads, Drinking water ,Sanitation facilities etc.
- In the country Developing social infrastructure of the country like-Social welfare and services, Regional development ,Women empornmentg etc.
- To improve and strengthen market mechanism of the country.
- Ensuring Social Justice and Equility.
- Reducing both social and income inequality in the country.
- To increase Standard of Life and per capita income of people.
Evolution of Economic planing in India-
1.Dadabhai Naoroji-
- The idea of economic planning was initially advocated by Dadabhai Naoroji in his article ‘Poverty of India’ ( 1878).
2.Visvesvaraya Plan- 1934 -
- Sir M. Visvesvaraya published a book titled “Planned Economy in India” in 1934, wherein he presented a draft to double the national income in a decade.
- He proposed to shift the labor from the agrarian set up to the industries thereby advocating for democratic capitalism with emphasis on industrialization.
- No action was taken on his suggestions and nothing substantial came out from it.
3.National Planning Committee (NPC)-1938-
- In 1938 Congress President Subhash Chandra Bose established a National Planning Committee under the chairmanship of Jawaharlal Nehru.
- It was the first attempt to develop a national plan for India.
- This session of congress was held in Haripura.
- However , because of commencement of World War II, the reports of the committee could not be prepared.
- The papers finally came out after independence in 1948-49.
- The committee recommended that the planning should aim at doubling the standard of living of the people in 10 years.
- Agriculture was also one of the major focus of this committee.
- It also recommended the control of state over industries and natural resources.
4.Bombay Plan-1944-
- Eight leading industrialists such as Mr JRD Tata, GD Birla, Purshottamdas Thakurdas, Lala Shriram , Kasturbhai Lalbhai etc. formulated a draft titled “A Brief Memorandum Outlining a Plan of Economic Development for India” under the editorship of Purushottamdas Thakurdas in 1944.
- This draft was called as Bombay plan
Main objective -
- Doubling the output of the agricultural sector and a five fold growth in the industrial sector in 15 years.
- Therefore it focused both on industrial and Agriculture sector.
- It also favoured for intervention of government for effective economic development
It was not officially accepted.
5.People’s Plan-1944
- This plan was drafted by MN Roy,the communist leader.
- It was based on Marxist Socialism.
- Its focus was development of agricultural sector and control of resources of the government.
6.Gandhian Plan-1944
- A Gandhian Plan incorporating the ideas of Gandhiji was prepared by Shriman Narayan and Acharya S.N. Agarwala in 1944.
- The main focus of this plan was ‘decentralized economic structure’ for India with ‘self-contained villages.
- Unlike NPC and the Bombay Plan, the plan laid more emphasis on agriculture. And, wherever industrialization was discussed.
- It focused on promoting cottage and village-level industries.
7.Planning Advisory Board-1946
- The Interim Government established a planning advisory board in October 1946 to assess plans and future projects and make recommendations.
8.Sarvodaya Plan-
- This plan was formulated by Jai Prakash Narayan in 1950.
- It was inspired by the Gandhi Plan and Vinoba Bhave’s principles of self-reliance.
- Its primary focus was both Agricultural and industrial development.
- It also focused and advocated for self sufficiency and decentralization of the economic resources.
Planning Commission and NDC
Planning Commission
- The Planning process formally started in India after the attainment of Independence when Government of India set up the Planning Commission in March, 1950.
- Its main focus was to formulate five year plans in the country.
- Note- The first five year plan was launched April 1951.
- Prime Minister was its chairman (at that time J.L.Nehru was its 1st chairman).
- It was an extra-constitutional body.
National Development Council (NDC)
- It was founded on August 6, 1952.
- Prime Minister was its chairperson and all the Chief Ministers were its member.
- It had been giving the final approval to the FiveYear Plans of India.
- It was decision making body with respect to planing in India
Important one Liner Questions and Answers on Introduction to Planning in India.
What is Planning in India?
A scheme of economic organization where individual units coordinate as one system to maximize the satisfaction of people's needs within a given time.
What are the types of planning?
Imperative planning, indicative planning, rolling plans & fixed plans, long-term & short-term planning, centralized planning, and decentralized planning.
What is imperative planning?
A type of planning where a central planning authority makes economic decisions instead of a market system, and the state decides the goals and strategies of the economy.
What is indicative planning?
A type of planning that recognizes both consumer sovereignty and producer's freedom and includes private and public bodies in the planning process.
Which type of planning is followed in India?
Indicative planning is followed in India.
What are rolling plans?
Rolling plans are plans that assess the performance of the previous year and make a new plan based on that assessment, and there are three kinds of plans: current, fixed, and perspective.
What are fixed plans?
Fixed plans set goals and targets for a fixed period, such as 5 or 6 years.
What is short-term planning?
Short-term planning refers to planning for a short period, such as one or two years.
What is long-term planning?
Long-term planning refers to planning for a longer period, such as 10, 15, or 20 years.
What is centralized planning?
Centralized planning involves taking the majority of decisions at a single level, such as the central government in India.
What is decentralized planning?
Decentralized planning involves the involvement of all stakeholders, such as state and district-level authorities, in the planning process.
What are the objectives of planning?
The objectives of planning are to increase employment and utilize the demographic dividend, remove socio-economic problems, develop basic infrastructure, develop social infrastructure, strengthen the market mechanism, ensure social justice and equality, reduce both social and income inequality, and increase the standard of living and per capita income of people.
Who initially advocated economic planning in India?
Dadabhai Naoroji initially advocated economic planning in India in his article ‘Poverty of India’ in 1878.
Who presented a draft to double the national income in a decade in 1934?
Sir M. Visvesvaraya presented a draft to double the national income in a decade in 1934.
What was the National Planning Committee?
The National Planning Committee was the first attempt to develop a national plan for India, established by Congress President Subhash Chandra Bose in 1938 under the chairmanship of Jawaharlal Nehru.
What was the Bombay Plan?
The Bombay Plan was a draft formulated by eight leading industrialists, such as JRD Tata and GD Birla, outlining a plan of economic development for India in 1944.
What was the main objective of the Bombay Plan?
The main objective of the Bombay Plan was to double the output of the agricultural sector and achieve a five-fold growth in the industrial sector in 15 years.
Who formulated the People's Plan?
MN Roy, the communist leader, formulated the People's Plan in 1944.
What was the focus of the People's Plan?
The focus of the People's Plan was the development of the agricultural sector and the control of government resources.
Who prepared the Gandhian Plan?
Shriman Narayan and Acharya S.N. Agarwala prepared the Gandhian Plan in 1944.
What was the focus of the Gandhian Plan?
The focus of the Gandhian Plan was on promoting a decentralized economic structure for India with self-contained villages.