Independence came to India with the partition of the country on 15th August, 1947. In 1948, an Industrial Policy Statement was announced. It suggested the setting up of a National Planning Commission and framing the policy of a mixed economic system.
On 26th January, 1950, the Constitution came into force. As a logical sequence, the Planning Commission was set up on 15th March, 1950.
The Planning Commission was instructed (a) to make an assessment of the material capital and human resources of the country, and formulate a plan for the most effective and balanced utilisation of them, (b) to determine priorities, define the stages for carrying the plan and propose the allocation of resources for the due completion of each stage, (c) to identify factors which tend to retard economic development and (d) to determine the conditions which should be established for the execution of the plan.
The plan era started in India from 1st April, 1951 with the launch of the First Five Year Plan (1951-56). Since then 12 Five Year Plans have been launched, the last being the 12th Five Year Plan (2012-17). The Planning Commission carried out its task with both successes and failures till it was terminated in 2014. NITI Aayog (National Institution for Transforming India) was set-up as a replacement for the Planning Commission.
There is a long history of the evolution of economic thinking and approach to planning in India and therefore, its features are changing with the change of the economy. Structure and objectives of each and every country never remain uniform as well as linear. One can also see a wide difference in the political viewpoint as well as political approaches. Such differences lead to different approaches to planning varying from country to country. In other words, every country has its own peculiarities of economic planning and India is no exception to this. Further, such characteristics of Indian planning are not uniform. It is to be noted here that the features relate to the initial situation that shaped the future of planning. Again, the objectives of planning are not static in the sense they need to be changed according to the needs and opportunities of the country.
Indian history of planning can be divided into three periods: pre-independence, 1951-1991 and 1991 onwards. However, we will concentrate on planning of independent India down from 1951 till date. Indian planning is of the developmental variety. To build up a self-reliant economy, overall economic development of the country received top priority. However, short-term problems like refugee rehabilitation, food crises, foreign exchange shortage also got due attention from the planners. From the very beginning, it was decided that our planning would cover both economic and social spheres. The work under economic spheres included various schemes for the development of mining, forestry, dams, irrigation, rail, road, strategic industries, airports, ports, warehouses etc and the social spheres include development of schools, colleges, universities, management and technical institutes, hospitals, health centres, dispensaries, family planning centres, broadcasting etc.
As the plan in our country decided to cover wide areas, our planning is a kind of broad based comprehensive planning which covers a wide array of social and economic activities. The main objectives with which our Five Year Plans were prepared include development along socialist lines to secure rapid economic growth and expansion of employment, reduction of disparities in income and wealth, prevention of concentration of economic power and creation of values and attitudes of a free and equal society. For attainment of these objectives, Indian planners formulated a definite strategy of planned economic development. Since Second Plan onwards, Indian planners started to adopt a clear strategy for our plans. Firstly the strategy laid emphasis on investment in heavy industries. Thus, core strategy adopted by the planners in India for subsequent three plans, i.e., up to fifth plan, was to give much emphasis on rapid industrialisation through lumpy or extensive investment on heavy, basic and machine-making industries for accelerating the pace of development.
Later on in the subsequent plans, attempt has been made to develop small scale industries for increasing the supply of consumer goods and also for the development and modernisation of agricultural sector by adopting new labour-intensive techniques with employment objective in mind.
The plan strategy gave due emphasis to the expansion of public sector for infrastructural development along with development of heavy industries. Side by side, the private sector was also given due importance for expanding its activities.
Now with the setting up of NITI Aayog in India replacing Planning Commission, another new approach to planning has arrived in India. It came into existence by a government resolution on 1st January, 2015. The main objective of NITI Aayog is to usher in an era of democratic decentralisation of planning process. It aims to adopt a bottom-up approach in contrast with the top-down process of the Planning Commission. The Planning Commission has often been criticised as having an ivory tower mentality and an armed chair approach (unaware of ground realities). The NITI Aayog, on the other hand, will bring amicable Centre-States relationship.
The NITI Aayog has Prime Minister as the Chairperson, ex-officio; Vice Chairperson (Rajiv Kumar); CEO (Amitabh Kant) and 3 full time members. The NITI Aayog released its first initiative, the ‘Report on India’s Renewable Electricity Roadmap 2030 – Towards Accelerated Renewable Electricity Deployment’ at Renewable Energy Global Investors Meet and Expo (Re-Invest) 2015 and is currently actively working on it.
For developing countries, whether belonging to a democratic or an authoritarian political culture, planning has been considered a prerequisite for balanced socio-economic development and a strategy for making the best possible use of a available natural manpower, financial as well as infrastructural resources. Even in the developed countries of the West, planning in one form or another has remained an integral part of their economic system. In short, only planned economic development can hope to achieve a rate of growth which is politically acceptable. The most fundamental objective of planning is to alter the pattern of resources use and if possible to intensify such use in such a fashion as to achieve certain socially desirable goals.