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Important Points

1) Father of World Plans - Stalin.

2) In 1934, Mokshagundam Vishweswarayya written "Planned Economy for India". He is called Father of Economic Plans.

3) Economic plans was suggested by Subhash Chandra Bose at Haripura Congress Conference.

4) In 1938, Indian National congress had instituted National Planning Committee under the guidance of Jawahar Lal Nehru . But it didn't give the report.

5) In 1943, "Bombay Plan" was prepared and released by 16 industrialists of Mumbai. They are J.R.D. Tata, G.D Birla, etc

6) In 1944, M.N.Roy released "Peoples plan".

7) Sriman Narayana released "Gandhi plan" based on Gandhi ji principles in 1944.

8) In 1944, Britishers announced Department of planning led by A.Dalal.

9) In 1946, High Level Advisory Planning Board was established by the Government.

10) In 1950, Jaya Prakash Narayana released "Sarvodaya Plan".

11) In 1950, Shanmukham setty mentioned about Planning commission in budgetary speech.

12) Planning Commission (PC) established on March 15th, 1950.

13) PC is also called as "Economic Cabinet".

14) PC Chairman is Prime Minister.

15) PC Minister is Ex-officio Member.

16) PC Deputy Chairman is "De Facto Officer". He gets cabinet minister status.

17) First PC Chairman - Jawaharlal Nehru

18) First PC Deputy Chairman - Guljarilal Nanda.

19) First PC Secretary - Krishnamachary

20) PC is in Yojana Bhavan, New Delhi.

21) PC prints monthly magazine named "Yojana Magazine".

22) Fifth wheel of Socio - Economic Development is Planning Commission.

23) The Seventh Five Year Plan India was for the duration between 1985 and 1989 under the approval of the National Development Council in India.

24) NDC - National Development Council

  • Established - August 6th, 1952.
  • NDC Chairman - Prime Minister
  • Members- Central cabinet, Chief Ministers of all states, Lt. Governor of Union Territories.
  • Aim - To reject / accept the P.c reports

Planning in India

India planning is undertaken by the Planning Commission of India in order to improve the standard of living of the people belonging to the country. 

To improve the quality of life of the people, the resources of the country have to be utilized efficiently.

India planning has been done in various areas such as sports, education, labor, health, village industry, urban development, rural development, agriculture, industry, information technology, environment, real estate, infrastructure, and finance.

The India Planning Commission has been set up in March, 1950 and it undertook to draw up 5 year plans for developing the Indian economy. In these plans the Planning Commission of India, emphasized particular spheres such as industry, employment, agriculture, education, and health.

Till 2007, there have been 10 five year plans. All these plans have helped improve the quality of life of the people of India.

In order to improve sports in India, the Sports Authority of India has been set up by the Indian government. This body sees to it that the infrastructure required for sports is upgraded regularly and kept in good condition. It also formulates new projects and gets funding from the government in order to promote sports in the country.

Under India planning, education forms the most important area for it determines the future growth of the country. The department of higher education oversees all levels of education in India and is subsidized by the government of India heavily

For rural planning, India planning has set up a Rural Planning and Credit Department which is under the Reserve bank of India. This department formulates polices which help in rural development. It also extends credit for employment programs and agricultural activities in rural areas.

Under India planning, local bodies have been set up in all states in order to develop urban areas. These urban local bodies such as the municipal corporation and the Panchayat see to it that the services and basic infrastructure are well maintained.

India planning has helped improve the quality of life of the people. The Indian government must make efforts so that it continues to do. India Planning has facilitated the utilization of the resources of the country for the common good of the people and also to develop the country.


The Prime Minister is the Chairman of the Planning Commission, which works under the overall guidance of the National Development Council. 

The Deputy Chairman and the full time Members of the Commission, as a composite body, provide advice and guidance to the subject Divisions for the formulation of Five Year Plans, Annual Plans, State Plans, Monitoring Plan Programmes, Projects and Schemes.

The Planning Commission functions through several Divisions, each headed by a Senior Officer.


1. Agriculture

2. Communication, IT& Information

3. Decentralized planning, Panchayati Raj and Special Area Programme (Including Western Ghat Secretariat)

4. Development Policy & Perspective Planning

5. Environment & Forests (Including Climate Change Cell)

6. Financial Resources

7. Health, Family Welfare & Nutrition

8. Housing and Urban Affairs (including Home Affairs Cell)

9. Human Resources Development

10. Industries

11. Infrastructure

12. International Economics

13. International Relations Cell

14. Labour, Employment & Manpower

15. Minerals

16. Minority Cell

17. Plan Coordination and Management

18. Power & Energy

19. Project Appraisal & Management

20. Rural Development

21. Science & Technology

22. Social Justice and Social Welfare

23. Socio-Economic Research

24. State Plans (Including Island Development Authority Cell)

25. Transport and Tourism

26. Village and Small Enterprises

27. Voluntary Action Cell

28. Water Resources Division

29. Women & Child Development

30. Programme Evaluation Organization

Planning Commission

India Planning Commission was set up in March, 1950 by the resolution of the Indian government. The Commission for India Planning was established in order to bring about a steady and swift rise in the living standards of Indian citizens.

The government sought to uplift the condition of India's teeming millions by exploiting the country's rich resources (natural and otherwise) efficiently, providing employment opportunities to all, and by increasing the production levels in the agricultural as well as industrial sectors.

The various functions of India Planning Commission are:

* To assess the country's resources

* To formulate 5 year plans that make an effective use of the country's resources

* To determine national priorities and allot resources to the plans

* To decide the machinery required to make the plans successful

* To make appraisals of the plans periodically in order to check their progress

The composition of the India Planning Commission has changed a lot since its inception. At the head is the Prime Minister of the country who acts as the ex-officio chairman.

The India Planning Commission has a deputy chairman who is nominated and the cabinet members who act as part- time members. The full-time members of the Indian Planning Commission are experts from various fields such as industry, science, general administration, and economics.

In 1951, the 1st 5 year plan was announced and the then Prime Minister, Jawaharlal Nehru was the chairman of that India Planning Commission. Till 1965, 2 consecutive 5 year plans had been formulated.

After that, there was a pause in the launch of 5 year plans in India due to the Indo-Pakistan war. Again, in 1969, the 4th five year plan was launched and by 1992, the 8th five year plan was started.

In all these 8 plans emphasis has been laid on the public sector, with huge investments being made in heavy and basic industries. But in 1997, with the launch of the 9th five year plan, the emphasis shifted from the public sector and became more indicative in nature.

India Planning Commission has helped in the better utilization of the country's resources for the common good of the citizens. The Planning Commission is considered by many as the backbone of the country's progress and all-round development.

Five-Year plans of India

The economy of India is based in part on planning through its five-year plans, which are developed, executed and monitored by the Planning Commission. The tenth plan completed its term in March 2007 and the eleventh plan is currently underway.

  • First Five-Year Plan, 1951–1956
  • Second Five-Year Plan, 1956–1961
  • Third Five-Year Plan, 1961–1966
  • Fourth Five-Year Plan, 1969–1974
  • Fifth Five-Year Plan, 1974–1979
  • Sixth Five-Year Plan, 1980–1985
  • Seventh Five-Year Plan, 1985–1990
  • Period between 1989–1991
  • Eighth Five-Year Plan, 1992–1997
  • Ninth Five-Year Plan, 1997–2002
  • Tenth Five-Year Plan, 2002–2007
  • Eleventh Five-Year Plan, 2007–2012 

  • Twelth Five-Year Plan 2012–2017

First Five-Year Plan, 1951–1956:

The first Indian Prime Minister, Jawaharlal Nehru presented the first five-year plan to the Parliament of India on 8 December 1951. The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation.

The agricultural sector was hit hardest by the partition of India and needed urgent attention.

The total planned budget of Indian Rupee ₹206.8 billion (US$23.6 billion in the 1950 exchange rate) was allocated to seven broad areas:
irrigation and energy (27.2 percent), agriculture and community development (17.4 percent), transport and communications (24 percent), industry (8.4 percent), social services (16.64 percent), land rehabilitation (4.1 percent), and for other sectors and services (2.5 percent).

At the end of the plan period in 1956, five Indian Institutes of Technology (IITs) were started as major technical institutions.

The University Grant Commission was set up to take care of funding and take measures to strengthen the higher education in the country.

Second Five-Year Plan, 1956–1961:

The Mahalanobis model was propounded by Prasanta Chandra Mahalanobis in the year 1953.The second five-year plan focused on industry, especially heavy industry.

Unlike the First plan, which focused mainly on agriculture, domestic production of industrial products was encouraged in the Second plan, particularly in the development of the public sector

Hydroelectric power projects and five steel mills at Bhilai, Durgapur, and Rourkela were established. Coal production was increased. More railway lines were added in the north east.

The Atomic Energy Commission was formed in 1958 with Homi J. Bhabha as the first chairman.

The Tata Institute of Fundamental Research was established as a research institute. In 1957 a talent search and scholarship program was begun to find talented young students to train for work in nuclear power.

The total amount allocated under the second five year plan in India was Rs. 4,800 crore. This amount was allocated among various sectors:
  • Mining and industry
  • Community and agriculture development
  • Power and irrigation
  • Social services
  • Communications and transport

Third Five-Year Plan, 1961–1966:

The third plan stressed on agriculture and improving production of rice, but the brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards the Defence industry.

In 1965-1966, India fought a war with Pakistan. The war led to inflation and the priority was shifted to price stabilisation.

The construction of dams continued. Many cement and fertilizer plants were also built. Punjab began producing an abundance of wheat.

Many primary schools were started in rural areas. In an effort to bring democracy to the grassroot level, Panchayat elections were started and the states were given more development responsibilities.

State electricity boards and state secondary education boards were formed. States were made responsible for secondary and higher education. State road transportation corporations were formed and local road building became a state responsibility.

The target growth rate of GDP(gross domestic product)was 4.5 percent.The achieved growth rate was 4.3 percent.

Fourth Five-Year Plan, 1969–1974:

At this time Indira Gandhi was the Prime Minister. The Indira Gandhi government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture.

In addition, the situation in East Pakistan (now Bangladesh) was becoming dire as the Indo-Pakistani War of 1971 and Bangladesh Liberation War took place.

Funds earmarked for the industrial development had to be diverted for the war effort.

India also performed the Smiling Buddha underground nuclear test in 1974, partially in response to the United States deployment of the Seventh Fleet in the Bay of Bengal.

The fleet had been deployed to warn India against attacking West Pakistan and extending the war.

Fifth Five-Year Plan, 1974–1979:

Stress was laid on employment, poverty alleviation, and justice. The plan also focused on self-reliance in agricultural production and defence. In 1978 the newly elected Morarji Desai government rejected the plan.

Electricity Supply Act was enacted in 1975, which enabled the Central Government to enter into power generation and transmission.

The Indian national highway system was introduced for the first time and many roads were widened to accommodate the increasing traffic.

Tourism also expanded.

Sixth Five-Year Plan, 1980–1985:

The sixth plan also marked the beginning of economic liberalization. Price controls were eliminated and ration shops were closed. This led to an increase in food prices and an increase in the cost of living. This was the end of Nehruvian Plan and Rajiv Gandhi was prime minister during this period.

Family planning was also expanded in order to prevent overpopulation. In contrast to China's strict and binding one-child policy, Indian policy did not rely on the threat of force.

More prosperous areas of India adopted family planning more rapidly than less prosperous areas, which continued to have a high birth rate.

Seventh Five-Year Plan, 1985–1990:

The main objectives of the 7th five year plans were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment opportunities.

As an outcome of the sixth five year plan, there had been steady growth in agriculture, control on rate of Inflation, and favourable balance of payments which had provided a strong base for the seventh five Year plan to build on the need for further economic growth. The 7th Plan had strived towards socialism and energy production at large.

The thrust areas of the 7th Five year plan have been enlisted below:
  • Social Justice
  • Removal of oppression of the weak
  • Using modern technology
  • Agricultural development
  • Anti-poverty programs
  • Full supply of food, clothing, and shelter
  • Increasing productivity of small and large scale farmers
  • Making India an Independent Economy

Based on a 15-year period of striving towards steady growth, the 7th Plan was focused on achieving the pre-requisites of self-sustaining growth by the year 2000.

The Plan expected a growth in labour force of 39 million people and employment was expected to grow at the rate of 4 percent per year.

Period between 1989–1991:

1989-91 was a period of political instability in India and hence no five year plan was implemented. Between 1990 and 1992, there were only Annual Plans. In 1991, India faced a crisis in Foreign Exchange (Forex) reserves, left with reserves of only about US$1 billion. 

Thus, under pressure, the country took the risk of reforming the socialist economy. P.V. Narasimha Rao)was the twelfth Prime Minister of the Republic of India and head of Congress Party, and led one of the most important administrations in India's modern history overseeing a major economic transformation and several incidents affecting national security. 

At that time Dr. Manmohan Singh launched India's free market reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of privatisation and liberalisation in India. 

Eighth Five-Year Plan, 1992–1997: 

Modernization of industries was a major highlight of the Eighth Plan. 

Under this plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt. Meanwhile India became a member of the World Trade Organization on 1 January 1995. 

This plan can be termed as Rao and Manmohan model of Economic development. 

The major objectives included, controlling population growth, poverty reduction, employment generation, strengthening the infrastructure, Institutional building,tourism management, Human Resource development, Involvement of Panchayat raj, Nagarapalikas, N.G.O'S and Decentralisation and people's participation. 

Energy was given prority with 26.6% of the outlay. An average annual growth rate of 6.7% against the target 5.6% was achieved.

Ninth Five-Year Plan, 1997–2002: 

Ninth Five Year Plan India runs through the period from 1997 to 2002 with the main aim of attaining objectives like speedy industrialization, human development, full-scale employment, poverty reduction, and self-reliance on domestic resources. 

The main objectives of the Ninth Five Year Plan of India are: 

  • to prioritize agricultural sector and emphasize on the rural development 
  • to generate adequate employment opportunities and promote poverty reduction 
  • to stabilize the prices in order to accelerate the growth rate of the economy 
  • to ensure food and nutritional security to provide for the basic infrastructural facilities like education for all, safe drinking water, primary health care, transport, energy to check the growing population increase 
  • to encourage social issues like women empowerment, conservation of certain benefits for the Special Groups of the society 
  • to create a liberal market for increase in private investments 

During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the target GDP growth of 6.5 per cent. 

Tenth Five-Year Plan, 2002–2007: 

  • Attain 8% GDP growth per year. 
  • Reduction of poverty ratio by 5 percentage points by 2007. 
  • Providing gainful and high-quality employment at least to the addition to the labour force; All children in India in school by 2003; all children to complete 5 years of schooling by 2007. 
  • Reduction in gender gaps in literacy and wage rates by at least 50% by 2007; Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2%; Increase in Literacy Rates to 75 per cent within the Tenth Plan period (2002 to 2007). 

Eleventh Five-Year Plan, 2007–2012: 

The eleventh plan has the following objectives: 

Income & Poverty: 

  • Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016-17 
  • Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits 
  • Create 70 million new work opportunities. 
  • Reduce educated unemployment to below 5%. 
  • Raise real wage rate of unskilled workers by 20 percent. 
  • Reduce the headcount ratio of consumption poverty by 10 percentage points.    


  • Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12 
  • Develop minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality
  • Increase literacy rate for persons of age 7 years or above to 85%
  • Lower gender gap in literacy to 10 percentage point
  • Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the plan

  • Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births 
  • Reduce Total Fertility Rate to 2.1 
  • Provide clean drinking water for all by 2009 and ensure that there are no slip-backs 
  • Reduce malnutrition among children of age group 0-3 to half its present level Reduce anaemia among women and girls by 50% by the end of the plan 

Women and Children:
  • Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17 
  • Ensure that at least 33 percent of the direct and indirect beneficiaries of all government schemes are women and girl children 
  • Ensure that all children enjoy a safe childhood, without any compulsion to work 

  • Ensure electricity connection to all villages and BPL households by 2009 and round-the-clock power. 
  • Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015 
  • Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012 
  • Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016-17 

  • Increase forest and tree cover by 5 percentage points. 
  • Attain WHO standards of air quality in all major cities by 2011-12. 
  • Treat all urban waste water by 2011-12 to clean river waters. 
  • Increase energy efficiency by 20 percentage points by 2016-17.

Twelth Five-Year Plan 2012–2017 :

12th Five Year Plan of the Government of India (2012–17) had decided for the growth rate at 8.2% but NDC on 27 Dec 2012 approved 8% growth rate for 12th five-year plan.

With the deteriorating global situation, the Deputy Chairman of the Planning Commission Mr Montek Singh Ahluwalia has said that achieving an average growth rate of 9 per cent in the next five years is not possible. The Final growth target has been set at 8% by the endorsement of plan at the National Development Council meeting held in New Delhi.

"It is not possible to think of an average of 9 per cent (in 12th Plan). I think somewhere between 8 and 8.5 per cent is feasible,” Mr Ahluwalia said on the sidelines of a conference of State Planning Boards and departments. The approached paper for the 12th Plan, approved last year, talked about an annual average growth rate of 9 per cent.

“When I say feasible...that will require major effort. If you don’t do that, there is no God given right to grow at 8 per cent. I think given that the world economy deteriorated very sharply over the last year...the growth rate in the first year of the 12th Plan (2012-13) is 6.5 to 7 per cent.”

He also indicated that soon he would share his views with other members of the Commission to choose a final number (economic growth target) to put before the country’s NDC for its approval.

Though the 12th Plan has taken off, it is yet to be formally approved. The Planning Commission has set a deadline of September for taking the approval of the National Development Council. The council is expected to meet after July subject to the convenience of the Prime Minister.

Poverty The government intends to reduce poverty by 10 per cent during the 12th Five-Year Plan. Mr Ahluwalia said, “We aim to reduce poverty estimates by9 per cent annually on a sustainable basis during the Plan period.”

Earlier, addressing a conference of State Planning Boards and Planning departments, he said the rate of decline in poverty doubled during the 11th Plan. 
The commission had said, while using the Tendulkar poverty line, the rate of reduction in the five years between 2004–05 and 2009–10, was about 1.5 percentage points each year, which was twice that when compared to the period between 1993-95 to 2004-05. what is the government focus of now a five-year plan, i.e. 2012–2017



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