INTRODUCTION

India’s development strategy through planning has been a cornerstone of the country’s
approach to economic growth and social progress since its independence in 1947. The
development strategy has evolved through various phases, from strict centralization to more
decentralized and market-oriented approaches. Understanding India’s development strategy
through planning involves examining this journey of growth, transformation, and adaptation,
which has shaped the nation’s socio-economic landscape over the decades.

MEANING & POLITICS OF PLANNING

Planning is not merely a technical exercise of economic management but a deeply political
process. It involves the state making decisions about allocating resources, prioritizing sectors for
development, and choosing strategies for economic growth. The concept of planning is
inherently linked to the notion of a developmental state, which seeks to use its resources and
authority to direct economic and social progress.

In the Indian context, planning is imbued with political significance. The politics of planning in
India are rooted in a mix of socialist principles, reflecting the influence of the Nehruvian era,
where the state played a central role in economic planning and development. This approach
drew inspiration from the Soviet model, emphasizing public sector-led growth, industrialization,
and state control. Planning in India has been influenced by the politics of governance, with
bureaucratic structures and political considerations playing a role in shaping policies. Another
key political aspect is the tension between centralized planning and state autonomy.

HISTORICAL BACKGROUND
Planning in India began as an institutional response to a series of crises, such as famines and
economic challenges, that emerged during and after World War II and continued
post-independence. This reactive nature of planning aimed to address immediate crises without
necessarily considering long-term solutions. Formal planning could begin only after the setting
up of the Planning Commission in 1950. Initially, its focus was on immediate problems like food
shortages and inflation, reflecting the urgent needs of the time. This focus on immediate issues
was partly driven by the political and economic volatility of the early post-independence period.

The Planning Commission’s creation in 1950 was enabled by two key political events: the
integration of princely states into India and the adoption of the Constitution. By including
“Planning” in the concurrent list, the Constitution allowed the Central Government to oversee
and coordinate planning across various states. This framework provided a cohesive structure for
India’s national development planning. Over time, the scope of planning was broadened to
include more diverse economic and social objectives, such as improving employment rates,
reducing poverty, and addressing malnutrition. These were incorporated into the successive
Five-Year Plans, which were meant to provide a structured and phased approach to
development.

The Planning Commission, created in 1950, lacked a clear role in economic management,
reflecting a misunderstanding of the link between planning and running an economy. Conflicts
like Sardar Patel questioning the Planning Commission’s authority over pricing policies showed
the unclear boundaries between the Commission’s role and broader government economic
functions. The strong emphasis on short-term planning, resembling annual budgets, constrained
the Planning Commission’s ability to address long-term social and economic issues. This focus
on shorter-term plans, influenced by political and economic pressures, hampered the
Commission’s capacity to effectively address fundamental challenges that require a longer-term
approach.

OBJECTIVES OF PLANNING
India’s planning strategy is centered on fostering rapid economic growth within a democratic
framework, with a focus on raising national income to improve the standard of living. Typically
targeting a 5% growth rate, the approach also includes modernization by transitioning from
agriculture to industry and services, adopting new technologies, and diversifying the economy.
Self-reliance aims to reduce reliance on foreign aid and imports by encouraging domestic
production and export diversification. Social justice seeks to uplift marginalized groups, reduce
income inequalities, and implement welfare programs to tackle poverty. These interconnected
goals drive India’s development planning, striving for a robust economy that balances growth
with social equity.

PLANNING COMMISSION & DIFFERENT PLANS

The Planning Commission was established as an extra-constitutional entity by a cabinet decree
on March 15, 1950. During its existence, it was tasked with drafting India’s Five-Year Plans and
guiding the country’s economic growth and development. It was instrumental in shaping India’s
early post-independence development. India’s planned economic development initiated in 1951
with the establishment of the First Five Year Plan.

Role of Planning Commission

The Planning Commission, established in 1950, played a significant role in shaping India's
economic landscape for over six decades. It provided a centralized vision for India's
development. It drafted Five-Year Plans that set national priorities, coordinated resource
allocation, and aimed to balance sectoral growth with broader social objectives. Its plans
emphasized social justice and inclusivity, aiming to address poverty, unemployment, and social
disparities. It played a crucial role in implementing policies that promoted equitable growth and
supported marginalized groups. In the initial decades, the Planning Commission's focus on
public sector-led growth laid the foundation for industrialization and infrastructure development.
The Planning Commission had the ability to adapt its plans to changing circumstances. It was
able to revise and adjust plans in response to economic shocks, such as the oil crisis in the
1970s, or other global events.

Various Five Year Plans

The Five-Year Plans have played a central role in India's development strategy, reflecting the
government's priorities and objectives for economic growth.

First Plan (1951-56)

• Focus: Agriculture, price stability, power, and transportation.
• Outcome: Actual growth was 3.6% against a target of 2.1%. The plan aimed to address food
scarcity and price stability, achieving significant success due to good yields in the later years.
Second Plan (1956-61)
• Focus: Industrialization, particularly heavy industries. Known as the Mahalanobis Plan.
• Outcome: Actual growth was 4.3% against a target of 4.5%. It advocated for significant imports
through foreign borrowing. The plan faced a severe forex shortage, leading to a partial success.
Third Plan (1961-66)
• Focus: Agriculture, aiming for self-sufficiency and supporting industry.
• Outcome: Actual growth was 2.8% against a target of 5.6%. The plan was disrupted by the
Chinese invasion (1962), Indo-Pak war (1965), and a severe drought in 1965-66, leading to a
focus on defense.
Three Annual Plans (1966-69)
• Focus: Agriculture and addressing food deficits.
• Outcome: Implemented to stabilize the economy after the failure of the Third Plan. Introduced
new agricultural approaches, laying the foundation for future growth.
Fourth Plan (1969-74)
• Focus: Development with stability and progressive self-reliance.
• Outcome: Actual growth was 3.3% against a target of 5.7%. The plan was impacted by the
Indo-Pak conflict (1971) and the influx of Bangladeshi migrants. It aimed to improve family
planning programs.
Fifth Plan (1974-79)
• Focus: Poverty eradication (Garibi Hatao) and self-sufficiency.
• Outcome: Actual growth was 4.8% against a target of 4.4%. The plan faced high inflation and
was later abandoned due to political changes.
Rolling Plan (1978-80)
• Focus: Employment and addressing the economic crisis.
• Outcome: Proposed to replace the traditional planning model, but abandoned with the return of
Congress in 1980.
Sixth Plan (1980-85)
• Focus: Economic liberalization, promoting national revenue, and poverty reduction.
• Outcome: Actual growth was 5.7% against a target of 5.2%. Marked the beginning of
liberalization and the end of Nehruvian socialism.
Seventh Plan (1985-90)
• Focus: Food, work, and productivity.
• Outcome: Achieved 6% growth against a target of 5%, focusing on employment and
productivity.
Eighth Plan (1992-97)
• Focus: Full employment, containment of population growth, and universalization of elementary
education.
• Outcome: Achieved 6.8% growth against a target of 5.6%. This plan emphasized employment
and agricultural diversification.
Ninth Plan (1997-2002)
• Focus: Agriculture and rural development, with an emphasis on generating employment and
reducing poverty.
• Outcome: Actual growth was 5.4% against a target of 6.5%. Focused on food security,
environmental sustainability, and social justice.
Tenth Plan (2002-2007)
• Focus: Aiming for an 8% annual growth rate and reducing poverty to 15% by 2007.
• Outcome: Achieved a 7.6% growth rate, with a focus on social services, governance
improvement, and reducing disparities.
Eleventh Plan (2007-2012)
• Focus: Faster and more inclusive growth.
• Outcome: Achieved an average annual growth rate of 8%, below the target but higher than the
previous plan. Emphasized addressing disparities and promoting inclusive growth.
Twelfth Plan (2012-17)
• Focus: Faster, sustainable, and more inclusive growth.
• Outcome: This plan faced challenges from the Eurozone crisis and domestic issues, leading to
a slowdown in economic growth. It emphasized sustainable development, inclusiveness, and
the need to address infrastructure issues.

The Twelfth Plan marked a shift towards a more decentralized approach to planning, eventually
leading to the establishment of NITI Aayog in place of the Planning Commission.

Criticism of Planning Commission

One of the primary critiques of the Planning Commission was its centralized approach. This
often led to bureaucratic inefficiencies and a lack of flexibility. The Commission's top-down
planning style was criticized for being out of touch with ground realities. The centralized nature
of the Planning Commission often resulted in limited involvement of state governments in
planning. The Commission's bureaucratic structure made it rigid and slow to respond to
changing circumstances. The Planning Commission had considerable influence, but it lacked
clear accountability. Its recommendations were advisory, and it was not directly responsible for
plan implementation. This ambiguity often resulted in unclear lines of responsibility and
challenges in holding the Commission accountable for plan outcomes. The Commission's
approach was often at odds with the shift toward market-oriented reforms in the early 1990s.

TRANSITION TO NITI AAYOG

In 2014, the Planning Commission was replaced by the NITI Aayog (National Institution for
Transforming India), reflecting a shift toward a more collaborative, decentralized approach to
planning and policy-making. NITI stands for National Institution for Transforming India. The
Prime Minister is the chairman of NITI Aayog. It is constructed on the 7 pillars of cooperative
governance ñ (1) Pro-People (2) Inclusion of all (3) Participation (4) Empowering (5) Pro-Activity
(6) Transparency and, (7) Equality.

-Objectives
1.To encourage cooperative federalism with the States on a continuous basis through organized
support initiatives and processes, understanding that strong states make for a strong nation.
2. To develop systems for developing feasible plans at the village level and at that time
aggregating them at higher levels of government.
3. To guarantee that the objectives of national security are unified into economic strategy and
policy in areas that are predominantly addressed to it.
4. To bestow special attention to those in our society who may be at peril of not benefiting
adequately from economic progress.
5. To provide guidance and stimulate collaboration between important stakeholders and
like-minded think tanks on a national and worldwide level, along with educational and policy
research organizations.
6. To provide a platform for inter-departmental and inter-sectoral issues to be resolved in order
to speed up the implementation of the development agenda.
7. To manage a cutting-edge Resource Center, aid as a repository for research on good
governance and best practices in equitable and sustainable development, and assist in their
dissemination.

-Impacts
The transition from the Planning Commission to NITI Aayog represents a shift towards a more
dynamic, cooperative, and flexible approach to national planning.

Positives
One of the most significant impacts of the transition was the move from a centralized planning
approach to a more decentralized model. NITI Aayog emphasizes cooperative federalism,
encouraging states to take a more active role in policy-making and planning. This approach has
led to a more inclusive planning process that takes into account the diverse needs of India’s
states and regions. It has transformed into a think tank, providing research, analysis, and policy
advice to the government. It has facilitated knowledge sharing by creating platforms for
cross-state and cross-sector collaboration. It has launched several innovative initiatives aimed
at fostering growth, development, and social welfare. Eg: Aspirational Districts Programme,
which focuses on transforming underdeveloped districts. Through the Atal Innovation Mission
and other initiatives, it has encouraged entrepreneurship and supported the growth of start-ups,
contributing to India’s position as a leading innovation hub. It has launched the National Nutrition
Mission (POSHAN Abhiyaan) to address malnutrition and improve health outcomes,and have
helped bring greater attention to public health issues. It has promoted data-driven governance
by emphasizing the importance of data collection, analysis, and transparency. It has also
produced numerous reports and policy recommendations on a wide range of topics, from
economic growth to social welfare. These reports have provided valuable insights and guided
government policies. The Planning Commission’s rigid structure, focused on five-year plans,
was replaced by a more flexible and adaptable framework with NITI Aayog. This flexibility allows
for quicker responses to changing circumstances.

Negatives
One of the primary challenges for NITI Aayog is the ambiguity surrounding its role and authority.
Its role is largely advisory, with no executive power to enforce policies or ensure implementation.
This limitation can undermine its effectiveness in driving policy changes and achieving desired
outcomes.
States have varying priorities and political agendas, which can hinder NITI Aayog’s efforts to
promote a unified approach to planning and development. Achieving consensus among diverse
states requires extensive consultation and negotiation, which can be time-consuming.
Political dynamics can affect its ability to advocate for specific policies, especially if those
policies are not aligned with the current government’s agenda.
Resource constraints, including limited funding and staffing, can hinder its ability to conduct
comprehensive research and analysis.
Another challenge is measuring the impact of NITI Aayog’s work and holding it accountable for
its recommendations. Since its role is advisory, determining its influence on actual policy
outcomes can be difficult.

-Comparison with PC
On one hand, NITI Aayog is a public policy think tank established with the goal of achieving
sustainable development goals through cooperative federalism by encouraging state
governments to participate in the economic policy-making process using a bottom-up approach,
on the other hand, the Planning Commission had the authority to enforce policies on states as
well as projects that it had approved.
While the NITI Aayog has not been granted the authority to allocate fund, the Planning
Commission had the authority to allocate funds to the State Governments and many Central
Government Ministries for various projects and programs at National and State Levels.
State Governments have to play a proactive role in NITI Aayog, but they did not have much role
to play in the Planning Commission.
Based on the requirements, there are part- time members appointed in NITI Aayog. However,
The Planning Commission did not have any provisions for the appointment of part-time
members.

ACHIEVEMENTS OF PLANNING PROCESS

The planning process provided a structured approach to India’s economic development.
Supporters of planning as an economic development formula argue that the achievements of
India's First Five-Year Plan were significant, because it was only a beginning. In addition, it is
felt that the introduction of the state sector did not necessarily mean abolition of private
enterprise. Private enterprise could be critical for overall national development. Jagdish
Bhagwati recognizes India's transformation of the traditional agricultural sector, improvement in
life expectancy at birth as some of India's landmark economic achievements through
development planning. When compared to most countries' development plans, Indian plans
depict a greater degree of stability in terms of conception. Indian development planning was not
a failure. Through development planning India transformed the inherited agrarian feudal
economy into one based on a well developed and highly diversified infrastructure with great
industrialization potential. Both the International Monetary Fund (IMF) and the World Bank
shared the optimism about India's planned development achievements, while eminent Western
economists lent their support to India's cause for post-independence centrally planned
restructuring of the economic landscape. The Indian planning model was seen in the free world
as the most appropriate one because of its democratic context. Through planning, India
developed essential infrastructure, including roads, railways, power plants, and
telecommunications.

DEFECTS OF PLANNING PROCESS

Neo-liberal writers contend that despite the fact that India led the developing world in long range
planning and despite her planning system being one of the best in the world, India's
development planning system has not been very successful. This is because India's economic
achievements did not resolve some of the country's underlying socioeconomic problems. The
major factors cited in their arguments are India's failure to curtail poverty and underemployment
as well as unemployment. The planning process did not fully address social inequalities. Certain
regions and communities remained marginalized Jagdish Bhagwati argues that the
disappointing feature of India's (planned) economic performance can be gauged in her
lackluster growth for a quarter of a century, with her principal problem being her inability to win
the anti-poverty war. It is further argued that development planning did not resolve India's major
contradictions and divisions even in the face of scientific discoveries and inventions undreamed
of one and a half centuries before. The issue of many Indians going to bed hungry, the
persistence of homelessness and general squalor are pointed out as factors that diluted the
country's achievements. Other economists have claimed that planned economies cannot
produce adequate structural changes at the right time and of the right magnitude. The focus on
industrialization and rapid economic growth led to environmental degradation and unsustainable
practices, neglecting environmental concerns.

CONCLUSION
From the early years of centralized planning and the emphasis on public sector-led
industrialization to the more flexible and decentralized approach with NITI Aayog, the planning
process has continuously evolved to meet the changing needs and challenges of the country.
Despite its eventual replacement, the Planning Commission's contributions to India's
development strategy were significant and laid the groundwork for subsequent policy shifts and
economic progress. As India continues to grow and evolve, its planning strategies will need to
remain adaptive and responsive to emerging challenges.