Planning in India

Date: December 13, 2014


Planning in India

In India, the Planned Economic Development began in 1951 with the inception of the First Five Year Plan. Economic planning consists of two basic elements. One is the determination of objectives and second is the provision of means for the achievements of the objective. The detailed scheme is called Economic Plan. The planning may either be centralized or decentralized depending upon the national requirements and degree of involvement of different sectors.

Types of Planning

  • Sectoral Planning and Spatial Planning – Sectoral Planning has brought into focus more and more the concept of area development, i.e. development plans for each of the homogeneous units in which the country is demarcated.

Spatial Planning is helpful in geographic dispersal of the efforts and fruits of planning in a scientific manner.

  • Centralized and Decentralised Planning – Cenralized Planning presumes complete central control over a major part of the economy.

Decentralised Planning is the kind of planning where decision making process is dispersed and the implementation of plans is carrier through prices and incentives.

  • Fixed-term Plans and Rolling Plans – Ordinarily a short-term Plan, say of five years, is divided into annual plans, each annual plan beginning from where the preceding plan left. This way it may be called fixed-term planning.

A variant of short-term plans is what has come to be known as ‘rolling plans’

Two major aspects of rolling plans :

  1. In a rolling plan, the central outlay allotment for major sectors within the overall five-year plan target will be fixed on a yearly basis.
  2. The five year horizon will be extended each year by changing the select central targets for an additional year.
  • Indicative and Imperative Planning – Including Planning provides direction for the growth of the economy by spelling out clear goals and providing help in reaching them.

Imperative Planning is essentially planning wherein the implementation is provided for, along with its formulation. It not only plan what is desirable but ensures that the economy shapes itself as per plan requirements



The first attempt at systematic planning in India was made by Shr. M. Visvesvarya when he published in 1934, his book Planned Economy for India. Three years later, in 1937, the Indian National Congress set up the National Planning Committee (under the chairmanship of Pt. Jawaharlal Nehru) which submitted its report as late as 1948, since the Second World War and abnormal political developments in the country supervened. In the meantime, eight leading Bombay industrialists came out in 1943 with ‘A plan for Economic Development in India’; popularly known as ‘Bombay Plan’. The Plan aimed at increasing per capita income by 100 percent (from Rs. 65 to Rs. 130) within a 15 year period. This was sought to be achieved by raising agricultural production by 130 percent and industrial output by 500 percent. It accorded top priority to basic industries. Almost simultaneously with the Bombay Plan was released, by Shri M. N. Roy, a 10 year ‘People’s Plan’, envisaging a total outlay of Rs. 15,000 crores. In contrast to the Bombay Plan, it gave the highest priority to agriculture and consumer goods industries and relegated basic industries to a secondary place.

               Apart from these non-official attempts, the Government of India also realized the need for planning and accordingly a Department of Planning and Development was set up in 1944, which drew up both short-term and long-term plans, the former for the restoration of economic normalcy after the war and the latter for the country’s economic reconstruction and development.

               However, the real beginning of planning in India was made when in March 1950, the Indian Planning Commission was set up with Pt. Jawaharlal Nehru as its chairman. In July 1951, the Commission presented the draft outlines of the First-Five Year Plan covering the period from April 1, 1951 to March 1956.

The following can be said to be the main objectives of planning.

  1. To achieve sizeable increase in national income and pre capital income.
  2. To improve agricultural production for :
  • achieving self sufficiency in foodgrains production and                (b) meeting the needs of industry and export
  1. To achieve industrialization with special reference to basic and heavy industries
  2. To provide more employment opportunities
  3. To reduce inequalities in income and wealth distribution
  4. To achieve self reliance
  5. To eradicate poverty
  6. To achieve economic growth and maintain price stability


The Planning Strategy in India

The important features of planning strategy in our country have been as below :

  • The decentralization in planning progress gradually increased in respect of formulation and implementation
  • The emphasis has always been on adopting all possible measures to improve productivity of all the resources and also that of all the means of production (land, labour, capital)
  • Even now and then, proper choice of technology and modernization has been encouraged
  • The planning strategy adopted an integrated approach to human resource development, manpower planning and employment potential