Economic Planning in India
Delhi Police Exams - GK Section
Introduction: What is Economic Planning?
Economic Planning means a systematic and conscious direction of economic activity by the government to achieve specific development goals within a defined time period.
Memory Trick: “Planning = Predetermined Path for Prosperity.”
India adopted planned development after Independence (1951) to ensure balanced growth, reduce poverty, and promote industrialization.
Historical Background
| Year | Event / Institution | Description |
|---|---|---|
| 1934 | M. Visvesvaraya’s “Planned Economy for India” | First proposal for economic planning |
| 1938 | National Planning Committee | Formed under Jawaharlal Nehru (INC) |
| 1944 | Bombay Plan | Drafted by Indian industrialists |
| 1950 | Planning Commission established | By executive order under Nehru |
| 1951 | 1st Five-Year Plan launched | Agricultural & rural focus |
Trick: Visvesvaraya → Nehru → Bombay Plan → Planning Commission → 1st Plan.
Objectives of Economic Planning
- Economic Growth
- Employment Generation
- Self-Reliance
- Social Justice
- Balanced Regional Development
- Poverty Alleviation
Mnemonic: G-E-S-S-B-P → Growth, Employment, Self-reliance, Social justice, Balance, Poverty.
History of Five-Year Plans (1951–2017)
| Plan | Period | Main Objective | Key Highlights / Outcomes |
|---|---|---|---|
| 1st Plan | 1951–56 | Agriculture & Irrigation | Community Development Programme |
| 2nd Plan | 1956–61 | Industrialization | P.C. Mahalanobis Model; heavy industries |
| 3rd Plan | 1961–66 | Self-Reliance | Wars & droughts led to plan failure |
| 4th Plan | 1969–74 | Growth with Stability | “Garibi Hatao” slogan introduced |
| 5th Plan | 1974–79 | Poverty Removal | Nationalization of banks; 20-point program |
| 6th Plan | 1980–85 | Infrastructure & Energy | Focused on power & tech |
| 7th Plan | 1985–90 | Food, Work, Productivity | Green & White Revolution results |
| 8th Plan | 1992–97 | Economic Reforms (LPG) | Liberalization, Privatization, Globalization |
| 9th Plan | 1997–2002 | Growth with Social Justice | Inclusive growth focus |
| 10th Plan | 2002–07 | Employment & GDP growth | Target GDP 8% |
| 11th Plan | 2007–12 | Inclusive Growth | Focus on human development |
| 12th Plan | 2012–17 | Faster, Sustainable, Inclusive Growth | Last 5-Year Plan (before NITI Aayog) |
Trick to Remember: Aunt Is Selfish, Gave Poor India Food & Economic Growth Inclusive.
(Agriculture → Industry → Self-Reliance → Garibi → Poverty → Infrastructure → Food → Economic → Growth → Inclusive)
Objectives and Achievements Summary
| Plan Type | Objective | Achievement |
|---|---|---|
| Early Plans (1st–3rd) | Agriculture & Industry | Agricultural base established |
| Middle Plans (4th–6th) | Poverty & Employment | Bank nationalization, Green Revolution |
| Reform Plans (7th–8th) | Modernization & LPG | Economic liberalization (1991) |
| Recent Plans (9th–12th) | Inclusive & Sustainable Growth | GDP stabilized, social schemes expanded |
End of Five-Year Plans
- 12th Five-Year Plan (2012–17) was the last plan.
- Planning Commission was replaced by NITI Aayog in 2015.
- India shifted from fixed-period plans to continuous strategic planning.
Trick: NITI Aayog = No Interval Timebound Implementation.
NITI Aayog – Formation, Structure & Functions
Formation
- Established: 1 January 2015
- Replaced: Planning Commission (1950–2014)
- Nature: Executive body (not Constitutional)
Composition
| Position | Role / Head |
|---|---|
| Chairperson | Prime Minister |
| Vice-Chairperson | Appointed by PM |
| Governing Council | Chief Ministers + Lt. Governors |
| Full-Time Members | Eminent economists, experts |
| Special Invitees | Domain specialists nominated by PM |
| CEO | Appointed by Government of India |
Trick: PM Chairs, States Share, Experts Prepare.
Functions of NITI Aayog
- Policy Think Tank – Provides directional and strategic inputs.
- Cooperative Federalism – Involves States in decision-making.
- Innovation & Startup Support – Atal Innovation Mission.
- Monitoring & Evaluation – Tracks key policy outcomes.
- Vision 2047 Planning – Long-term national goals.
Trick: Think, Cooperate, Innovate, Evaluate, Vision.
Difference Between Planning Commission & NITI Aayog
| Feature | Planning Commission | NITI Aayog |
|---|---|---|
| Formed In | 1950 | 2015 |
| Nature | Centralized | Decentralized |
| Approach | Top-down | Bottom-up |
| Role | Allocate funds | Advise & strategize |
| Chairman | Prime Minister | Prime Minister |
| Focus | Five-Year Plans | Policy reforms & innovation |
| Legal Status | Executive body | Executive body |
| Funding Power | Yes | No |
| Key Motto | Central Planning | Cooperative Federalism |
Trick: Planning = Funds, NITI = Ideas.
PYQs (Delhi Police, SSC & State Exams)
Who is considered the father of Indian economic planning?
A) Jawaharlal Nehru B) P.C. Mahalanobis C) M. Visvesvaraya D) Dr. Ambedkar
Show Answer
C) M. Visvesvaraya
The Planning Commission was set up in —
A) 1947 B) 1950 C) 1951 D) 1952
Show Answer
B) 1950
The First Five-Year Plan emphasized —
A) Agriculture B) Industry C) Defense D) Transport
Show Answer
A) Agriculture
The “Garibi Hatao” slogan was given during which plan?
A) 3rd Plan B) 4th Plan C) 5th Plan D) 6th Plan
Show Answer
B) 4th Plan
The Planning Commission was replaced by NITI Aayog in —
A) 2014 B) 2015 C) 2016 D) 2017
Show Answer
B) 2015
Who is the Chairperson of NITI Aayog?
A) Finance Minister B) Prime Minister C) President D) RBI Governor
Show Answer
B) Prime Minister
Which of the following is not a Five-Year Plan objective?
A) Economic growth B) Industrialization C) Judicial independence D) Self-reliance
Show Answer
C) Judicial independence
Which plan introduced economic reforms (LPG policy)?
A) 7th Plan B) 8th Plan C) 9th Plan D) 10th Plan
Show Answer
B) 8th Plan
The 12th Five-Year Plan focused on —
A) Industry B) Inclusive and Sustainable Growth C) Banking Sector D) Trade Policy
Show Answer
B) Inclusive and Sustainable Growth
Which of the following is NOT true about NITI Aayog?
A) It allocates central funds B) It promotes cooperative federalism C) It provides policy advice D) It replaced the Planning Commission
Show Answer
A) It allocates central funds
Quick Recap Table
| Five-Year Plan | Focus Area | Slogan / Feature |
|---|---|---|
| 1st (1951–56) | Agriculture | Grow More Food |
| 2nd (1956–61) | Industry | Mahalanobis Model |
| 4th (1969–74) | Stability & Growth | Garibi Hatao |
| 5th (1974–79) | Poverty Removal | 20-Point Program |
| 8th (1992–97) | Reforms (LPG) | Globalization Era |
| 12th (2012–17) | Inclusive Growth | Last Plan |
Concept Summary
- India adopted Planned Development in 1951
- Planning Commission (1950) → NITI Aayog (2015)
- 12th Plan (2012–17) = Final 5-Year Plan
- NITI Aayog promotes Cooperative Federalism & Innovation
- Top-down replaced by bottom-up planning
One-Line Memory: From Planning to NITI — India shifted from funding projects to framing policies.
Master Economic Planning for Competitive Exams!
Join Courage Library for comprehensive study materials and expert guidance.
Be a Couragian!