Brief of Planning Commission
Brief of Planning Commission
Brief of Planning Commission
At the time of independence of India, there was a large proportion of impoverished people in
the country. Poverty alleviation and improvement of life standards of people were the major
considerations of the government. Indian economy needed a direction, which was crippled by
foreign subjugation. India was still a geographic expression and a nation in making. Other
than the spirit of the freedom struggle, factors required for binding the people were few. So
the then politicians and think tanks opted for a planned economy and a centralized planning
body to formulate a plan for socio-economic development. Thus, planning commission came
into existence in March 1950 through a cabinet resolution which became a permanent body of
experts.
After India achieved Independence, a formal model of planning was adopted, and
accordingly the Planning Commission, reporting directly to the Prime Minister of India,
was established on 15 March 1950, with Prime Minister Jawaharlal Nehru as the Chairman.
Authority for creation of the Planning Commission was not derived from the Constitution of
India or statute; it is an arm of the Central Government of India.
The Planning Commission was set up by a Resolution of the Government of India in March
1950 in pursuance of declared objectives of the Government to promote a rapid rise in the
standard of living of the people by efficient exploitation of the resources of the country,
increasing production and offering opportunities to all for employment in the service of the
community. The Planning Commission was charged with the responsibility of making
assessment of all resources of the country, augmenting deficient resources, formulating plans
for the most effective and balanced utilisation of resources and determining priorities.
Jawaharlal Nehru was the first Chairman of the Planning Commission.
The first Five-year Plan was launched in 1951 and two subsequent five-year plans were
formulated till 1965, when there was a break because of the Indo-Pakistan Conflict. Two
successive years of drought, devaluation of the currency, a general rise in prices and erosion
of resources disrupted the planning process and after three Annual Plans between 1966 and
1969, the fourth Five-year plan was started in 1969.
The Eighth Plan could not take off in 1990 due to the fast changing political situation at the
Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The Eighth Plan
was finally launched in 1992 after the initiation of structural adjustment policies.
For the first eight Plans the emphasis was on a growing public sector with massive
investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the
emphasis on the public sector has become less pronounced and the current thinking on
planning in the country, in general, is that it should increasingly be of an indicative nature.
Formulate a Plan for the most effective and balanced utilisation of country's
resources;
On a determination of priorities, define the stages in which the Plan should be carried
out and propose the allocation of resources for the due completion of each stage;
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;
Determine the nature of the machinery which will be necessary for securing the
successful implementation of each stage of the Plan in all its aspects;
Appraise from time to time the progress achieved in the execution of each stage of the
Plan and recommend the adjustments of policy and measures that such appraisal may
show to be necessary; and
Make such interim or ancillary recommendations as appear to it to be appropriate
either for facilitating the discharge of the duties assigned to it, or on a consideration of
prevailing economic conditions, current policies, measures and development
programmes or on an examination of such specific problems as may be referred to it
for advice by Central or State Governments
Evolving Function
From a highly centralised planning system, the Indian economy is gradually moving towards
indicative planning where Planning Commission concerns itself with the building of a long
term strategic vision of the future and decide on priorities of nation. It works out sectoral
targets and provides promotional stimulus to the economy to grow in the desired direction.
The emphasis of the Commission is on maximising the output by using our limited resources
optimally. Instead of looking for mere increase in the plan outlays, the effort is to look for
increases in the efficiency of utilisation of the allocations being made.
With the emergence of severe constraints on available budgetary resources, the resource
allocation system between the States and Ministries of the Central Government is under
strain. This requires the Planning Commission to play a mediatory and facilitating role,
keeping in view the best interest of all concerned. It has to ensure smooth management of the
change and help in creating a culture of high productivity and efficiency in the Government.
The key to efficient utilisation of resources lies in the creation of appropriate self-managed
organisations at all levels. In this area, Planning Commission attempts to play a systems
change role and provide consultancy within the Government for developing better systems. In
order to spread the gains of experience more widely, Planning Commission also plays an
information dissemination role.
Organization
The composition of the Commission underwent considerable changes since its initiation.
With the Prime Minister as the ex officio Chairman, the committee had a nominated Deputy
Chairman, with the rank of a full Cabinet Minister. Cabinet Ministers with certain important
portfolios acted as ex officio members of the Commission, while the full-time members were
experts in various fields like economics, industry, science and general administration.
Ex officio members of the Commission included the Finance Minister, Agriculture Minister,
Home Minister, Health Minister, Chemicals and Fertilisers Minister, Information Technology
Minister, Law Minister, Human Resource Development Minister and Minister of State for
Planning.
The Commission worked through its various divisions, of which there were two kinds:
General Planning Divisions
Programme Administration Divisions
The majority of the experts in the Commission were economists, making the Commission the
biggest employer of the Indian Economic Service.
There were many issues with planning methods followed in India. The drawbacks of the
planning adopted via PC includes:
In the next article, lets see how the new institution, NITI Aayog can
change the face of Indian Planning.
On 29 May 2014, the Independent Evaluation Office submitted an assessment report to Prime
Minister Narendra Modiwith the recommendation to replace the Planning Commission with a
"control commission." On 13 August 2014, the Union Cabinet scrapped the Planning
Commission, to be replaced with a diluted version of the National Advisory Council(NAC) of
India. On 1 January 2015 a Cabinet resolution was passed to replace the Planning
Commission with the newly formed NITI Aayog (National Institution for Transforming
India). The first meeting of NITI Aayog was chaired by Narendra Modi on 8 February 2015.
Finance Minister Arun Jaitley made the following observation on the necessity of creating
NITI Aayog, "The 65 year-old Planning Commission had become a redundant organisation.
It was relevant in a command economy structure, but not any longer. India is a diversified
country and its states are in various phases of economic development along with their own
strengths and weaknesses. In this context, a one size fits all approach to economic planning
is obsolete. It cannot make India competitive in todays global economy."
The National Institution for Transforming India, also called NITI Aayog, was formed
via a resolution of the Union Cabinet on January 1, 2015. NITI Aayog is the premier policy
Think Tank of the Government of India, providing both directional and policy inputs. While
designing strategic and long term policies and programmes for the Government of India,
NITI Aayog also provides relevant technical advice to the Centre and States.
The Government of India, in keeping with its reform agenda, constituted the NITI
Aayog to replace the Planning Commission instituted in 1950. This was done in order to
better serve the needs and aspirations of the people of India. An important evolutionary
change from the past, NITI Aayog acts as the quintessential platform of the Government of
India to bring States to act together in national interest, and thereby fosters Cooperative
Federalism.
At the core of NITI Aayogs creation are two hubs Team India Hub and the
Knowledge and Innovation Hub. The Team India Hub leads the engagement of states with
the Central government, while the Knowledge and Innovation Hub builds NITIs think-tank
capabilities. These hubs reflect the two key tasks of the Aayog.
NITI Aayog is also developing itself as a State of the Art Resource Centre, with the
necessary resources, knowledge and skills, that will enable it to act with speed, promote
research and innovation, provide strategic policy vision for the government, and deal with
contingent issues.
The Government of India, in keeping with its reform agenda, constituted the NITI Aayog to
replace the Planning Commission instituted in 1950.
This was done in order to better serve the needs and aspirations of the people of India. An
important evolutionary change from the past, NITI Aayog acts as the quintessential platform
of the Government of India to bring States to act together in national interest, and thereby
fosters Cooperative Federalism.
The planning commission followed a top- down method approach to developing India. This
meant that someone in the top decided what was suitable for people and provided monetary
resources to the state governments based on that.
Hence, the states which had lesser monetary resources compared the center had to depend
upon the planning commission for funds.
State governments had equal responsibility for the development of India, but they did
not have the funds
Planning commission was an unelected body that was dictating the road map of
development to an elected state executive
This was an undemocratic approach because, a non - constitutional and unelected body had
acquired powers to decide how India was going to develop
Even in the central government, various departments had to chase the planning commission
for departmental allocations. In addition to this , there was no mechanism to assess the
performance of schemes suggested/ pushed by the planning commission.
Hence, India of the 21st century needs the states to be equal partners in the development story
of India. Since, the state governments are closer to the grassroots of this nation, they are
better equipped to decide how the money needs to be spent.
MEMBERS
The NITI Aayog is based on the 7 pillars of effective Governance. They are:
Functions
To evolve a shared vision of national development
priorities sectors and strategies with the active
involvement of States in the light of national objectives.
To foster cooperative federalism through structured
support initiatives and mechanisms with the States on a
continuous basis, recognizing that strong States make a
strong nation.
To develop mechanisms to formulate credible plans at
the village level and aggregate these progressively at
higher levels of government.
To ensure, on areas that are specifically referred to it,
that the interests of national security are incorporated in
economic strategy and policy.
To pay special attention to the sections of our society
that may be at risk of not benefiting adequately from
economic progress.
To design strategic and long term policy and
programme frameworks and initiatives, and monitor
their progress and their efficacy. The lessons learnt
through monitoring and feedback will be used for
making innovative improvements, including necessary
mid-course corrections.
To provide advice and encourage partnerships between key
stakeholders and national and international like-minded Think
tanks, as well as educational and policy research institutions.
To create a knowledge, innovation and entrepreneurial support
system through a collaborative community of national and
international experts, practitioners and other partners.
To offer a platform for resolution of inter-sectoral and inter
departmental issues in order to accelerate the implementation of
the development agenda.
To maintain a state-of-the-art Resource Centre, be a repository
of research on good governance and best practices in
sustainable and equitable development as well as help their
dissemination to stake-holders.
To actively monitor and evaluate the implementation of
programmes and initiatives, including the identification of the
needed resources so as to strengthen the probability of success
and scope of delivery.
To focus on technology upgradation and capacity building for
implementation of programmes and initiatives.
To undertake other activities as may be necessary in order to
further the execution of the national development agenda, and
the objectives mentioned above..
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