Planning refers to the process of generating long term vision and strategy for the overall economic growth and development.
Economic Planning in India
- India adopted a system of five yearly planning to address its various socio-economic problems in 1951.
- Some of the great architects of Indian planning include Jawaharlal Nehru, P.C Mahalanobis, V.R Gadgil, V.K.R.V Rao.
- After becoming the first prime minister of independent India, Nehru established the Planning Commission in 1950.
- The major function of the Planning Commission was to formulate plans keeping in view the resources of the country and suggesting the best methods to utilize them effectively and in a balanced manner.
- Planning commission prepared the first five-year plan (FYP) for the period 1951-1956. By 2014, India has already experienced more than sixty years of planning and 12th 5-year plan ended in 2017 after the formation of NITI Aayog.
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Achievements of planning in India:
![Achievements of planning in India](https://theiashub.ams3.digitaloceanspaces.com/images/2979aa91d0018b28507f2c115ffd7778.png)
1. Achievements in Economic Growth: To achieve growth it is necessary to achieve an increase in national income and per capita income as well as increase in production of agricultural and industry sectors.
- Achieved above the target growth rate-First five-year plan was a success as it achieved a growth rate of 3.6 per cent against a target of 2.1 percent growth rate in national income.
- Agricultural development: Food grain production increased from 51 million tonnes in the first plan to 257.4 million tonnes in 2011-12.
- Industrial development: a major achievement has been the diversification of Indian industries., expansion of transport and communications, growth in generation and distribution of electricity etc
2. Creation of Infrastructure- India has achieved a great deal in the area of creation of infrastructure.
- large expansion roads and railway networks, domestic air travel has increased significantly.
- Expansion of irrigation and hydro-electric projects has given a boost to agricultural production.
- Increase in urban infrastructure-There has been growth in establishment of towns and cities due to increase in urban infrastructure.
- Communication networks: in the form of mobile telephony, internet has expanded tremendously.
3. Development in Education
- Gross enrolment rate has been increased to over 98%.
- Literacy rate has increased from 18% in 1950s to 74.04 per cent as per the Census 2011.
4. Development of Science and Technology -
- Increase in technical and skilled manpower.
- Pioneering Space research like Chandrayaan, Mars Orbiter Mission, private sector taking roots in the space sector.
- Impetus to nuclear and other renewable energy-it is now able to send technical experts to many foreign countries in the middle east, Africa etc.
5. Expansion of Foreign Trade-
- Due to industrialization in the country, India’s dependence on import of capital goods has declined.
- India’s overall export crossed $750bn from being negligible at the time of independence.
Drawbacks of planning in India:
Besides the achievements as told above, there are many unfulfilled tasks which the planning in India is yet to achieve completely.
1. Failure to Remove Poverty and Inequality completely: 21. 9 % population under poverty in 2011 as per last official estimates. Just 5 per cent of Indians own more than 60 per cent of the country’s wealth (OXFAM 2023 report).2. Problem of Unemployment Persists:
- Huge backlog of unemployment: lack of creation of required number of jobs every year.
- Lack of skillful population: Only around 5% of the workforce
- Female labour force participation was just around 25.1% in 2020-21
3. Sluggish Industrial development:
- Despite major focus on industrialisation in the 5-year plans, contribution of industry to the GDP is less than 25%
- Lack of development of labour-intensive sector due to strict labour laws leading to unemployment and poverty.
4. Failure to Curtail Corruption and Black Money:
- Rampant corruption and red tapism. Corruption perception index- 85/180.
- Black money in the system is around 50% of the GDP, according to the IMF, which is also the root cause of inequality in distribution of income.
Planning Commission of India
Planning commission was a non-constitutional and non- statutory organization set up by government resolution on 15th March 1950 which was given the authority to formulate the five-year plans for economic growth.
It had the following functions
- Assessing capital, material, and human resources for growth.
- Investigate resource enhancement options.
- Draft a plan for effective utilization of resources
- Allocate resources for every step of plan implementation
- Review progress and propose changes as needed.
- Make suggestions for its duties, policies, and economic issues.
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Achievements of the planning commission
- Invested in infrastructure and capital to grow. Heavy industry ex-investment
- Brought out new concepts for growth. Ex- green revolution.
- Helped India achieve agricultural self-sufficiency, reducing imports and preserving foreign policy.
- Made great emphasis on social justice, poverty alleviation, health etc.
- LPG reforms opened the economy, creating a sustainable foreign reserve and private sector competition.
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Issues with the Planning commission
- Plans formed usually had a “one size fits all” approach.
- Overcentralized decision-making, ignoring local governance
- Lack of regular state engagement in planning.
- Weak implementation, monitoring and evaluation of money spent and the outcome achieved.
- Land reforms were not properly implemented.
- After the LPG reforms, people were more unequal.
- Weak think tank and expert network for creative problem-solving.
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NITI Aayog
NITI Aayog (National Institute for Transforming India) was established as a successor of the Planning Commission as an extra-constitutional body created by an executive resolution. It has been created as a premier policy think tank of the government providing both directional and policy inputs.
Achievements of NITI Aayog
![Issues with NITI Aayog](https://theiashub.ams3.digitaloceanspaces.com/images/dca15e5c75d2cbc7a9add21f2bec2cfd.png)
- Strategy and vision depicted under action agenda beyond 12th five-year plan- 7-year strategy document and 3-year action agenda.
- Reforms in agriculture-
- Through Model land leasing act 2016 to recognise rights of tenant and safeguard interest of landowners
- Agricultural Marketing and Farmer Friendly Index—to sensitise states to market reforms, land lease, forestry, etc.
- Reforming Medical education- Recommended scrapping the Medical Council of India and proposed National Medical Commission making it more representative and accountable.
- Digital Payment Movement- To promote financial inclusion:
- Recommended cashback and referral bonuses through BHIM UPI.
- Launched Digi Dhan Vyapar Yojana to promote digital payments.
- Promoting innovation- Atal Tinkering Labs and Incubation Centres launched to foster youth innovation and entrepreneurship.
- Indices Measuring states’ performances in health, education and water management- to foster competitive federalism like Healthy states, progressive India index
Way forward:
- The NITI Aayog need to function as an independent think tank without any political interference.
- It needs to be empowered with adequate financial powers.
- Making the NITI Aayog answerable to the Parliament would make it more accountable.
- The NITI Aayog need to focus and strengthen the aspects of decentralized planning and development.