Planning commission was an institutional panel set up by the government of India in 1950, which was responsible for formulating five year plans and other development functions. Planning commission was replaced by ‘NITI AAYOG’ in 2015. It was decided to adopt planned economic growth post independence and the planning was done by the planning commission.
The main objective of planning commission was to improve the standard of living of the ordinary citizens by optimizing the use of available human resource, production and creating employment opportunities. Today, NITI AAYOG is responsible for periodic economic assessment of resources. Prime Minister was the chairman of the planning commission and all the members were directly reporting to the chairman.
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Planning commission was drafted as a functional arm of the Central Government. Planning commission was established just for planning, but it later went on to become extremely powerful and started influencing the policies made by the government. It started functioning as a super cabinet and often attracted criticism for the same.
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Planning commission was replaced by NITI AAYOG (National Institution for Transforming India) in 2015. The Prime Minister of India is the Chairman of the commission and presides over the meetings. Deputy Chairman is given the rank of a Central Cabinet minister. He is responsible for formulating and submitting the draft of five year plan to the Union Cabinet. Central finance and planning ministers are the other full time members of the commission. Other ministers can be added to the commission on full time or part time basis. Planning commission can have 4-7 members. The commission has experts from various fields.
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Below mentioned are the functions of planning commission;
Execution of the five year plans: The first five year plan (1951-1956) was drafted and implemented in 1951. The first plan was aimed at developing the agriculture sector as it was the primary source of income. The growth in the agriculture sector met the target and boosted the confidence of planning commission and they insisted on focusing on public sector in the second five year plan.
The second five year plan (1956-1961) started looking beyond the agriculture sector, planning commission focused on improving the public sector which resulted in rapid industrialization.
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The third five year plan (1961-1966) focused on agriculture again. More importance was given to food production and processing. But, Sino-Indian war in 1962 and Indo-Pak war in 1965 made the focus shift to defense. This resulted in inflation and required price stabilization. Third five year plan was a failure and the planning commission did not implement the next five year plan immediately, they took 3 years to plan for the next five year plan. Annual plans were in place between 1966 and 1969.
The fourth five year plan (1969-1974) was implemented in 1969. This five year plan had the recommendation to nationalize 14 banks. Green revolution saw massive improvement in the agriculture sector. India faced Pakistan in yet another war in 1971. Liberation of West Pakistan resulted in the birth of Bangladesh. The war resulted in not meeting the targeted growth rate as the war took away the funds allocated for industrialization.
The fifth five year plan (1974-1978) focused on addressing the issues of poverty, social justice and lack of employment. The Electricity Supply Act was amended in 1975, which enabled the Central Government to enter into power generation and transmission. The Indian National Highway System was introduced which boosted tourism. Rolling plan was introduced between 1978 - 1980 due to change of governments.
The sixth five year plan (1980-1985) marked the beginning of economic liberalization in 1980. Fair price ration shops were closed which resulted in sky rocketing of the food grain prices. The National Bank for Agriculture and Rural Development (NABARD), was established for development of rural areas. Family planning was introduced to prevent over population.
The seventh five year plan (1985-1990) focused on improving the industrial productivity, using the latest technology. The important areas that were focused on were social justice, oppression of the weak, utilization of modern technology and developing agriculture sector.
The eight five year plan (1992-1997) did not take off immediately due to political turmoil. Years 1991 and 1992 had annual plan instead. In 1991, India faced a shortage in forex reserves. The Indian government reformed the socialist economy. It was the beginning of liberalization, privatization and globalization (LPG) in India. India launched free market reforms which brought life back to the ailing Indian economy.
The ninth five year plan (1997-2002) saw efforts from both public and private sectors in improving the country. The government agencies and general public too contributed to the development of rural areas. New implementation measures in the form of Special Action Plans (SAPs) were introduced. The SAPs focused on the areas of social infrastructure, agriculture, information technology and Water policy.
The tenth five year plan (2002-2007) focused on attaining a growth rate of 8% GDP a year. The plan also focused on reduction of poverty by 5% a year. The other important aspects of this five year plan were to increase employment opportunities and reduce the literacy gap between the genders. The eleventh five year plan (2007-2012) focused on education. It encouraged education by correspondence and gave nod to formal, non-formal, distant and IT education institutions.
Twelfth five year plan (2012-2017):
The planning commission initially targeted a growth rate of 9%. But, with the deteriorating global market, it was impossible to achieve. The growth rate then got revised and was set at 8%. Below mentioned were the objectives of the twelfth five year plan;
NITI AAYOG replaced planning commission, there are certain ways in which they differ. Following are the major differences between planning commission and NITI AAYOG;
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