The Soviet Union explored and adopted national planning for the first time in the world.
* Many fresh proposals suggesting immediacy of planning in India were put forward through the erstwhile British government remained almost immune to them.
* Credit of proposing the first blue print of India planning is given to the popular civil engineer.
ex-Dewan of Mysore state M. Visvesvaraya.
* His ideas of state planning were an exercise in democratic capitalism with emphasis on industrialisation.
* A shift of labour from the agrarian set up to the industries targeting to double national income in one decade.
* Though there was no follow up by the British government on this plan.
* It aroused an urge for national planning among the educated citizens of the country.
In 1934, a serious need of national planning was recommended by the Federation of Indian Chambers of Commerce and Industry (FICCI), the leading organisation of Indian capitalists.
* By the late nineteenth century, the economic thinking of the nationalists was in favour of a dominant role of state in the Economy and doubted the prudence of the market mechanism.
* This thinking was further reinforced by the Keynesian ideas in the wake of the Great Depression.
* The new Deal in the USA and the Soviet experiment in national planning.
* Thus, the Indian capitalist class were also influenced by these events which were voiced in the FICCI articulation for planning.
The Congress Plan
* It was on the initiative of the INC president Subhash Chandra Bose that the National Planning Committee (NPC) was setup in October 1938 under the chairmanship of Jawaharlal Nehru.
* To work out concrete programmes for development encompassing all major areas of the Economy.
Major Objectives of Planning
Planning for India was an instrument to realise the aspirations and dreams of the future.
* The Process of Planning in India tried to include all the aspirations of the nationalist movement as well as of the future generations.
* There are three important features included in the constitutional Provisions which Pertain to the objectives of planning in the country.
* Economic and Social planning is a concurrent subject.
* The constitution includes provisions for promoting co-operation on a voluntary basis between the union and the states and among states and groups of states in investigation of matters of common interest, in legislative procedures and administration.
* Thus avoiding the rigidities inherent in federal constitution.
* The constitution also sets out in broad outline the pattern of the welfare state envisaged and the fundamental principles on which it should rest.
* The methodology of planning taking a U-turn in the era of the Economic reforms since the early 1990's.
The Six major objectives of planning in India which are as follows
i) Economic Growth: Sustained increase in the levels of production in the economy is among the foremost objectives of planning in India.
ii) Poverty Alleviation: Poverty alleviation was the most important issue which polarised the members of the NPC as well as the constituent Assembly that a highly emphatic decision in favour of a planned economy evolved even before independence.
iii) Employment Generation: Providing employment to the poor has been the best tool of economics to alleviate poverty.
iv) Controlling Economic Inequality: There were visible economic inequalities in India at the inter-personal as well as at the intra-personal levels.
* Economic planning as a tool of checking all kinds of economic disparities and inequalities was an accepted idea by the time India started planning.
v) Self − reliance: Self − reliance was defined not as autarchy but as an effort to strike against a subordinate position in the world economy.
* India still strive for self-reliance in every field of the Economy as well as serving the realities of higher interdependence in the globalising world post − World Trade Organisation (WTO).
vi) Modernisation: Modernising the traditional economy was set as a foremost 0bjective of the planning.
* The major objectives of planning in India are not only broad but open-ended.
In March 1950 the Planning Commission (PC) was set up by the government by cabinet resolution. Important details regarding the composition, legal status, etc, of the PC are under.
i) An extra-constitutional (i.e, non-constitutional) and non statutory body (though Planning originates from the constitution there is no reference to the PC in it).
ii) An advisory body to the Government of India on an array of issues of economic development.
iii) A think tank on economic development with the prime minister as its ex-officio Chairman and with the provision or a Deputy Chairman.
* The main function of the Deputy Chairman is to co-ordinate the work of the commission.
iv) Has an open provision for the number of its membership (as many area experts are required by the particular proposed period of planning) other than six union cabinet ministers as its ex-officio members and a member secretary.
The Minister of planning is already an ex-officio member of the PC.
v) An autonomous body entitled to form its own views on important issues and place them before the governments.
* It works closely with the union and state cabinets and has full knowledge of their policies.
vi) Is invariably consulted on changes proposed in social and economic policies.
vii) Linked with the union cabinet at the secretariat level.
viii) The PC is a technical body with experts and professionals coming from an array of specific areas as per the need of planning of the concerned period.
ix) The commission has executive powers.
Functions of the PC (Planning Commission)
Though the functions of the PC were extended to include timely changes in the planning needs, its functions were announced by the same government order which did up the planning commission, it self the order says.
The Planning Commission will
i) Make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of those resources as are found to be deficient in relation to the nation's requirements.
ii) Formulate a plan for the most effective and balanced utilisation of the country's resources.
iii) On a determination of priorities define the stages in which the plan should be carried out and propose the allocation of resources for due completion of each stage.
iv) Indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation. Should be established for the successful execution of the plan.
v) Determine the nature of the machinery.
vi) Appraise from time to time the progress achieved in the execution of each stage of the plan.
vii) Make such interim or ancillary recommendations as appear to be appropriate either for facilitating the discharge of the duties assigned to it.
* Or on a consideration of the prevailing economic conditions with the commencement of the tenth plan (2002 − 07). The government handed over two new functions, to the planning commission in 2002, namely.
* To monitor the plan implementation with special reference to the process of economic reforms with the help of the steering committees.
* To monitor the progress of various central ministries.
National Development Council
The National Development Council (NDC) was set up in August 1952, by a Resolution issued from the cabinet secretariat.
There were some strong reasons why the NDC was setup which may be seen as follows.
* The central plans were to be launched in the states and the UT's with the participation of the state level personnel.
* Economic planning as a concept had its origin in the centralised system.
* For India, to democratise/decentralise the very process of planning was not a lesser task/challenge than promoting development it self.
* The setting up of the NDC can be considered as the step in India towards decentralised planning.
The cabinet resolution by which the NDC was set up. Define its functions which are as under:
i) To consider the proposals formulated for plans at all important stages and accept them.
ii) To review the working of the plans from time to time.
iii) To consider the important questions of Social and Economic Policy affecting National Development.
iv) To recommend measures for the achievement of the aims and targets set out in the national plan, including measures to secure the active participation.
The Plans which are formulated by the Central Government and financed by it for the implementation at the national level are known as central plans.
The centre has launched three plans and the governments have maintained continuity in their implementation.
The three central plans are
* Five Year Plans
* Twenty Points Programme
* Member of Parliament Local Area Development scheme.
The Five Year Plans
The five year plans of the country have seen many unstable and critical moments till date.
* Several new developments related to planning also took place during the years.
The basic features of the country's developing planning process:
* It should be democratic
* Mixed economy
* Balanced development
I Plan (1951 − 56)
* The major objective was rapid agriculture development in order to achieve self-sufficiency in the production of food grains.
* Top priority was given to agriculture which includes irrigation with 31% of the plan outlet followed by transport and communication with 27%.
* Construction of major irrigation projects like Mettur dam (on Kaveri), Hirakud project (on Mahanadi) etc.
* A successful plan in terms of achieving major economic targets.
* There was a severe criticism that industry sector was neglected.
I Plan (1956 − 61)
This plan was popularly known as Nehru − Mahalanobi's model of Economic Development.
* The major objective was to achieve rapid industrialisation by investing more outlay in the capital goods sector.
* Top priority was given to heavy & basic industries with 28% of the plan outlay followed by transport & communication with 28% outlay.
* Firm foundation was laid for industrialisation by Establishing Steel Plants in the Public sector (Durgapur, Bilai, Rourkela.. etc) also in the private sector (TISCO Jamshedpur (in Jharkhand)).
* Atomic energy commission and TIFR (Tata Institute of fundamental Research) was established.
* Targets could not be achieved due to unfavourable monsoons and inflationary pressure.
III Plan (1961 − 66)
* The major objective was self − reliance and self − sufficiency.
* Top priority was given to development of infrastructure (Transport, Power and Communications) with 25% of the plan outlay and without neglecting agriculture and industries. Green Revolution was launched during 1965 − 66 to achieve self − sufficiency in the production of food grains (Cereals, Millets, Pulses) 1968 − 77 Post Green Revolution.
* State Electricity Board & State Road Transport Corporation were established. to strengthen the power sector and transport sector.
✦ The performance was miserable value to
✦ Chinese Aggression during 1962
✦ 1st Indo − Pakistan war during 1965
✦ Failure of Mansoons
Because of Miserable performance. Prime Minister Indira Gandhi declared plan holiday, not to have 5 Year Plan instead 3 annual plans implemented (1967, 68, 69).
The Economy did not perform well during 1966 − 67. The economy started recovering during 1967 − 68. Economic stability was restored during 1968 − 69.
IV Plan (1969 − 74)
* The major objective was the growth with stability and social justice.
* Agriculture was given top priority with 24% of plan outlay followed by industries with 23%.
* Major initiative was Nationalisation of National Indian Banks (14).
* Not successful due to Indo − Pak War.
* Failure of monsoons in different parts of country and Inflationary pressure.
V Plan (1974 − 79)
* The major objective include removal of poverty (Garibi Hatao) and employment generation.
* Top priority was given to industries with 26% of the plan outlay followed by agriculture with 22%.
* For the 1st time Public Distributive System (PDS) to supply essential commodities to the people BPL at subsidise prices.
* In order to develop the rural areas minimum needs program covering Primary Education, Primary Health Care, Rural Water Supply and Sanitation, Rural Housing and Rural Roads.
* This plan was terminated one year ahead of the schedule due to change of government at centre.
* In other words it was implemented only for 4 years till (1978).
* This plan was implemented for only 2 years (1978 − 80).
* In this plan, every 3 year plan has a 5 year perspective and the planning process is continuous unlike the fixed 5 year plan approach.
* Top priority was given for rural development.
VI Plan (1980 − 85)
* Major objectives include poverty reduction. employment generation, population control & social justice.
* Top priority was given to energy with 28% of Plan outlay followed by agriculture with 24%.
* Anti-poverty programmes and employment generation programme were launched.
* Inflation was under control.
* A Successful plan in terms of achieving macro social and economic targets.
VII Plan (1985 − 90)
* Major objective include implement efficiency with greater stress on human resources development.
* Energy was given top priority with 28% of Plan out lay followed by agriculture with 22%.
* Technology missions in different sectors of the economy were launched.
* A successful plan in achieving macro socio − economic targets.
* The Economy for the 1st time exhibited Resilience.
Two Annual Plans
* Due to political instability, 5 years plan could not be formulated. Instead 2 annual plans. Implementation during 1990 − 91 and 1991 − 92.
VIII Plan (1992 − 97)
* This plan is popularly known as Rao − Manmohan Singh model of economic development.
* Economic reforms in different sector of the Economy and Fiscal reforms were launched.
* Major objectives include Human Resources Development, Involvement of Panchayatraj (based on 73rd amendment), Nagar palikas (74th amendment) Non Governmental Organizations.
* Energy was given top priority with 27% of the plan outlay followed by social services (Education, Health, Social Justice for vulnerable sections of population).
* National Social Assistance Programme.
* Member of Parliament Local Area Development Scheme (MPLADS) was launched.
* A successful plan was launched with an average annual growth rate of about 6.5% of GDP in real terms.
* Inflation was under control.
* Inflow of Foreign Direct Investment (FDI) and accumulation of Foreign Exchange Reserves.
X Plan (1997 − 2002)
* Major objectives include social mobilisation and people's participation, empowerment of women and vulnerable sections of the population, promoting co − operatives and Self − Help Group (SHG) (DWACRA).
* Priority was given to energy with 23% of the Plan outlay followed by social services with 21% of Anti Poverty Progress namely Targeted public Distribution System (TPDS) and Antyodaya Anna Yojana (Poorest of Poor)were launched.
* By amalgamating the employment general programmes, 2 progs.
* Shahari Rojgari Yojana and Swarnajayanthi Grama Swarojgari Yojana
* Not successful plan.
X Plan (2002 − 07)
* The major objectives include growth with equity and stability, access to basic social services and social opportunities for all individual and groups with greater participation in decision making.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for giving emplyoment guarentee in rural areas.
* Bharat Nirman (covering 6 critical areas was launched).
XI Plan (2007 − 12)
* Faster and More inclusive growth.
* Placing the economy on a sustainable growth trajectory with an annual growth rate of 9% in real GDP.
* Reducing the disparities across regions and communities by ensuring access to basic physical infrastructure and social services to all.
* Stimulating the private investment by removing the constraints and excessive transaction constitution.
* Top priority was given to social services with 30% of the plan outlay followed by energy with 23%.
* A social security scheme Aam Admi Bima Yojana was launched.
* Performance is not satisfactory because against the target of 9% growth rate in real GDP, the achievement was about 8%. In poverty reduction and employment generation also, targets could not be achieved.
XII Plan (2012 − 17)
The main objectives include:
* Faster, sustainable and more inclusive growth.
* The average annual growth rate in GDP in real terms is 8%.
The sectoral growth rates are
* Agriculture sector to grow act 4% per annum.
* Industrial sector to grow act 7.6% per annum.
* Service sector to grow act 9% per annum.
* The average annual savings rate at 33.6 and investment rate at 36.9.
National Advisory Council
* constituted during 2004 with Sonia Gandhi as Chair person.
* it did not function during the period 2006 − 10 since Mar 2010 the NAC is functioning.
The major objective is providing inputs in the policy formulating by the government
and to provide support to the government in its legislative business.
Twenty Point Programme
The Twenty Point Programme (TPP) is the second central plan which was launched in july 1975.
* The programme was conceived for coordinated and intensive monitoring of a number of schemes implemented by the central and the state governments.
* The basic objective was of improving the quality of life of the people, especially of those living below the poverty line.
* The Programme was restructured in 1982 and 1986. The programme, known as the 'TPP − 86' has 119 items grouped into 20 points which are related to the improvement in the quality of life in rural areas.
* The 'TPP − 86' has been restructured and, named 'TPP − 2006' keeping in view the challenges of the 21st century with particular reference to the process of the Economic reforms
* This is in harmony with the National Common Minimum Programme (NCMP) of the UPA Government.
* Basically, the programme was targeted to the cause of poverty alleviation with the direct attack approach.
* This experiment encouraged the government to go for a whole five-year plan with the slogan Garibi Hatao.
MPLADS (Member of Parliament Local Area Development Scheme)
The Member of Parliament Local Area Development Scheme (MPLADS) is the last of the central plans and latest to have been launched, too.
* The scheme was launched on December 23rd, 1993 with only Rs.5 lakh given to each MP which was increased to Rs.1 crore in the year 1994 − 95.
* The MOSPI (Ministry of Statistics and Programme Implementation) issued ,revised guidelines for the scheme in August, 2012 with following salient features.
i) Assistance to physically challenged persons upto maximum of Rs.10 lakh per year for purchases of tri-cycles and artificial limbs have been allowed.
ii) Ambulances/Hearse vans under the District Authority/CMO/Civil Surgeon of the district can now also be operated through private organisations.
iii) MPs allowed to recommend eligible works upto Rs.10 lakh per year outside the constituency for Lok Sabha MPs and out side states for Rajya Sabha MPs.
iv) Advances to government implementing agencies increased to the ratio of 75 : 25 (form 50 : 50).
v) Contingency funds of 0.5 percent have been increased to 2 percent of the annual entitlement as administrative expenses.
vi) Works can also be implemented in areas affected by man made calamities like chemical biological and radiological hazards.
vii) Mobile library for government educational institutions/public libraries now permissible.
viii) Works from out of the shelf of MGNREG.
ix) Funds can be used now for construction of Railway halt stations to facilitate the local community for boarding/deboarding the train.
x) An MP has been entitled for setting up of MPLADS facilitation centre in the Nodal District for which MPLADS funds not exceeding Rs.5 lakh being the cost of equipment, furniture, etc., can be used.
xi) MPs may recommend purchase of books upto Rs.22 lakh annually for Schools/Colleges/Public.
Multi − Level Planning
By the mid 1960's, the states were given the power to plan by the centre advising them that they should promote planning at the lower levels of the administrative set strata, too, i.e., the district level planning - via.
* The municipalities and corporations in the urban areas and via block level through panchayats and the tribal boards.
* By the early 1980's, India was a country of the Multi Level Planning (MLP) with the structure and strata of Planning as follows.
First Strata: Centre Level Planning
At this level three types of Central plans had evolved over the years.
* The Five Year Plans
* The Twenty Point programme
* The MPLADS
Second Strata: State Level Planning
The states plans were for a term of five years and parallel to the concerned five year plans of the centre.
Third Starata: District Level Planning
The district level plans are implemented now via municipalities or corporations in the urban areas and the panchayats via the blocks in the rural areas.
Fourth Strata: Block level Planning
Below the blocks, India developed the planning at the local level, too.
Fifth Strata: Local Level Planning
Due to socio-economic differentiations among the population local level planning in India developed with its Three variants, namely.
Village Level Planning
Hill Area Planning
Tribal Area Planning
MONITORABLE TARGETS SET BY THE TWELFTH PLAN
The Twelfth Plan (2012 - 17) has set twenty - five monitorable targets in seven broad areas reflecting its (India's) vision of rapid, sustainable and more inclusive growth.
i) Real GDP growth rate of 8 percent
ii) Agriculture growth rate of 4 percent.
iii) Manufacturing growth rate of 10 percent.
iv) Every state must have an average growth rate in the Twelfth plan preferably higher than that achieved in the Eleventh plan.
Poverty and Employment
* Head - count ratio of consumption poverty to be reduced by 10 percentage points over the preceding estimates by the end of Twelfth five year plan.
* Generate 50 million new work opportunities in the non-form sector and provide skill certification to equivalent numbers during the Twelfth five year plan.
* Mean years of schooling to increases to seven years by the end of the twelfth five year plan.
* Enhance access to higher education by creating two million additional seats for each age cohort aligned to the skill needs of the economy.
* Eliminate gender and social gap in school enrolment by the end of the twelfth five year plan.
Reduce IMR 25 and MMR to 1 per 1,000 live births, and improve child sex ratio (0 - 6 years) to 950 by the end of the twelth five year plan.
* Reduce total fertility rate to 2.1 by the end of the Twelfth five year plan.
* Reduce under - nutrition among children aged 0 - 3 years to half of the NFHS - 3 levels by the end of the Twelfth five year plan.
Infrastructure Including Rural Infrastructure:
* Increase investment in infrastructure as a percentage of GDP to 9 percent by the end of the Twelfth five year plan.
* Increase the Gross irrigated area from 90 million hectare to 103 million hectare by the end of the Twelfth five year plan.
* Provide electricity to all villages and reduce AT & C losses to 20 percent by the end of the twelfth five year plan.
* Connect all villages with all-weather roads by the end of the twelfth five year plan.
* Upgrade national and State highways to the minimum two-lane standard by the end of the twelfth five year plan.
* Complete Eastern and Western dedicated freight corridors by the end of the Twelfth five year plan.
* Increase rural tele - density to 70 percent by end of the Twelfth Five year plan.
* Ensure 50 per cent of rural population has access to 40 percent piped drinking water supply, and 50 per cent gram panchayats achieve Nirmal Gram status by the end of the twelfth five year plan.
Environment and Sustainability:
* Increase green cover by 1 million hectare every year during the twelfth five year plan.
* Add 30,000 MW of renewable energy capacity in the twelfth plan.
* Reduce emission intensity of GDP in time with the target of 20 percent to 25 percent reduction over 2005 levels by 2020.
* Provide access to banking services to 90 percent Indian households by the end of the twelfth five year plan.
* Major subsidies and welfare related beneficiary payments to be shifted to a direct cash transfer by the end of the twelfth plan, using the Aadhar plat form with linked bank accounts.
National Institution for Transforming India (NITI Aayog)
National Institution for Transforming India (NITI) has been established by the Governments of India as a replacement for the planning commission.
* It is being formed on the basis of extensive consultations across the stake holders viz state governments, relevant institutions, experts and the people at large.
* NITI has not come into existence all of a sudden.
* The document of the 8th five year plan, the standing committee on finance in its report on demand for grants (2011 - 12) and the former prime minister and noted economist Dr. Manmohan Singh accepted in his farewell address to the planning commission in 2014 have sought appropriate changes in the planning commission.
* As a result of these aspirations NITI has been established to provide a critical, directional and strategical inputs to the development process.
Nature of NITI
i) The planning commission era witnessed centre-to state one way follow of policy.
NITI seeks genuine and continuing partnership of the centre and Indian states.
ii) It will emerge as a think - tank to provide strategical and technical advice to the central and state governments.
iii) It helps to evolve, promote and strengthen co-operative federalism believing that strong states make a strong nation.
iv) It develops mechanisms to formulate village level plans and integrate them at higher levels of government.
v) It ensure that all sections of society would benefit adequately from economic processes.
vi) It will create a knowledge, innovation and entrepreneurial support through collaborations.
vii) It acts as a platform for resolution of inter-sectoral and inter-departmental issues to acceleration development.
viii) It is to monitor and evaluate the implementation of programmes and focus on upgradation and capacity building.
Objectives of NITI
i) To change the role of the government from provider of the first and last resort to that of an "enabler".
ii) To focus on a mix of agricultural production with food security at the base to benefit the farmers.
iii) To ensure that India is an active player in the deliberation on the global issues.
iv) To utilise the economically vibrant middle class in the process of production to realise their potential in full.
v) To leverage entrepreneurial, scientific and intellectual human capital.
vi) To incorporate the non-resident Indian community in the process of development.
vii) To enhance the use of modern technology in the growing urban centers for making them secure habitats.
viii) To promote good governance through the use of technology.
Organisational structure of NITI
It is an organisation, a network of expertise focusing on functionality, flexibility and domain knowledge.
Its organisation consists of:
i) Chair Person: Prime Minister
ii) Vice-Chairperson: To be appointed by the Prime Minister
1) Full time members
2) Part time members: Two from research institution/ leading universities on\ rotational basis.
iv) Ex-Officio Members: Maximum four from the union council of Ministers to be appointed by the Prime Minister.
v) Chief Executive Officers: To be appointed by the Prime Minister for a fixed tenure in the rank of secretary to the Government of India. NITI aayog works in close co-operation, consultation and co-ordination with the state government and central ministers.
Functions of NITI
1) It will facilitate to transform India into co-operative and competitive federalism. National agenda is provided to the prime minister and chief ministers for development along with priorities and strategies.
2) It introduces bottom-up model through decentralised planning.
→ It prepares vision and scenario plans for the states and nation.
3) It prepare domain strategies with experts to assist the central and state ministries.
→ It serves as a knowledge and innovation hub by accumulating and disseminating research and best practices.
4) It augurs an integrated and holistic approach to development.
→ It also resolves inter-state and inter-sectoral conflicts.
5) It serves as the nodal agency for harnessing global expertise and resources.
→ It acts as a consultant to the central and state governments on policies, programmes and skills in governance.
6) It enables capacity building and technology upgradation.
7) Finally it monitors the implementation of the policies and programmes and evaluate their impact.