Planning Commission was an extra-constitutional and non-statutory body formed by the resolution of the Government of India in March 1950. It was an advisory body to the Government of India on an array of issues of economic development. It was headed by the Prime Minister as the ex-officio Chairman. It was dissolved in 2014 and NITI Aayog replaced this body.

In this article, we will see what a planning commission is, its background, why it was dissolved, its composition and its functions.

What is the Planning commission?

• The Planning Commission of India was a government institution that, among other things, formulated India's Five-Year Plans. The planning commission was tasked with ensuring that everyone had the opportunity to work in the community's service.
• The Planning Commission was directly responsible to India's Prime Minister. It was founded on March 15, 1950, under the chairmanship of Prime Minister Jawaharlal Nehru. The Planning Commission was established by the Central/Union Government and was not established by the Constitution or statute.
• In March 1950, the Government of India passed a resolution establishing the Planning Commission. The government's main goals were to push a quick rise in Indians' living standards through profitable exploitation of the country's resources, increased output, and providing chances for everyone to work in the service of society.
• The Planning Commission was tasked with evaluating all of the country's resources, enhancing precious resources, making plans for the most productive and balanced use of resources, and determining priorities. The first Chairman of the Planning Commission was Pandit Nehru.

Background

• The first Five-Year Plan was started in 1951, and Five-Year Plans were developed until 1965 when the conflict with Pakistan caused a gap. Drought for two years in a row, rupee depreciation, general price increases, and resource depletion disrupted the planning process, and the 4th Five-year plan began in 1969, after Annual Plans from 1966 to 1969.
• Due to changing political circumstances and instabilities at the Centre, the 8th Plan was not introduced in 1990, and the years 1990-91 and 1991-92 were given Annual Plans. After the government began its economic liberalisation initiatives in 1992, the 8th Plan was ultimately launched. The focus of the first eight Plans was on a growing public sector with enormous expenditures in heavy and fundamental industries, but following the publication of the ninth Plan in 1997, the focus turned away from heavy industries and toward the idea that planning should be most suggestive in character.

Composition of Planning Commission

• Chairman – Prime Minister; presided over the meetings of the Commission
• Deputy Chairman – de facto executive head (full-time functional head);
  • Was in charge of drafting and submitting the draft Five-Year Plan to the Cabinet of Ministers.
  • The Central Cabinet appointed him for a defined term and he held the position of a cabinet minister.
  • Without the ability to vote, he or she might attend cabinet sessions.
• Part-time members – Some central ministers
• Ex-officio members – Finance Minister and Planning Minister

Functions of Planning Commission

• Make an assessment of the nation's capital, material, and human resources, including technical personnel, and look into ways to improve these resources for the nation's development;
• Prepare a plan for the most efficient and balanced use of the country's resources;
• Define the stages in which the Plan shall be implemented, as well as the resources required to complete each stage;
• Determine the causes that impede economic development and the circumstances that, in light of the current social and political environment, should be established to ensure the Plan's successful execution.
• Determine the type of machinery required for each step of the Plan to be completed successfully in all aspects;
• Regularly assess the success made in implementing the Plan at all phases and offer any policy or measure corrections or changes that such an assessment may find essential;
• Make interim or supplementary recommendations to enable it to carry out the responsibilities entrusted to it, or based on a review of current economic conditions, policies, measures, and development plans, or a study of specific problems that the Central or State Governments may refer to it.

Why was the Planning Commission dissolved?

• In contrast to the Commission, which imposed five-year plans and assigned resources to meet specified economic targets, promoters of the new National Institution for Transforming India (NITI) argue it will work more like a think tank or forum.
• The leaders of India's 29 states and seven union territories will be represented at NITI Aayog. However, the full-time team, which includes a deputy chairman, CEO, and experts, will report directly to the 64-year-old Prime Minister, who will serve as chairman.
  • It differs from the National Development Council's planning commission, which used to report to it.
• The major difference between the NITI Aayog and the Planning Commission's approaches to planning is that the former will encourage increased state participation, whereas the latter will take a top-down approach with a one-size-fits-all plan.
• The Planning Commission's duty was to formulate broad policy and serve as an advisory body.
  • The NITI Aayog would be in charge of allocating resources to states based on their requirements.
• Policy planning, which was the responsibility of the Planning Commission, had minimal direct input from the states.
  • The states were involved indirectly through the National Development Council; this will not happen again in the NITI Aayog.

Conclusion

The Planning Committee's role has been criticized by a number of people. The one relating to its duty as an extra-constitutional body is the most important. While the Constitution establishes spheres of authority and responsibility between the Union and the states for specific subjects and areas of activity in a federal system, it is argued that the Planning Commission, which was established by executive order of the Union government, acts as a "super-cabinet" in economic matters for the Union and the states.

FAQs

Q1: What was the primary role of the Planning Commission of India?

Q2: When was the Planning Commission established?

Q3: Who was the first Chairman of the Planning Commission?

Q4: What led to the dissolution of the Planning Commission?

Q5: How did the Planning Commission impact India’s economic policies?

MCQs

1. When was the Planning Commission of India formed?

a) 1947

b) 1950

c) 1965

d) 1971

2. Who served as the first Chairman of the Planning Commission?

a) B.R. Ambedkar

b) Jawaharlal Nehru

c) Rajiv Gandhi

d) Manmohan Singh

3. What replaced the Planning Commission in 2015?

a) Planning Board

b) National Development Council

c) NITI Aayog

d) Economic Advisory Council

4. Which of the following was a key function of the Planning Commission?

a) Formulate monetary policy

b) Draft constitutional amendments

c) Prepare five-year plans

d) Conduct elections

5. What was a significant criticism of the Planning Commission?

a) Inefficiency in resource allocation

b) Lack of political support

c) Overemphasis on agriculture

d) Inadequate planning for urban development

GS Mains Questions and Model Answers

Q1: Critically evaluate the contributions of the Planning Commission of India to economic development.

Answer: The Planning Commission of India significantly contributed to the country's economic development through the formulation of five-year plans that prioritized sectors such as agriculture, industry, and infrastructure. Its approach aimed at addressing poverty and inequality, facilitating targeted investments, and mobilizing resources for development projects. However, its centralized planning model faced criticism for inefficiencies and a lack of responsiveness to local needs. The evolution into NITI Aayog marks an attempt to address these shortcomings by fostering decentralized, participatory planning that accommodates regional variations and aspirations.

Q2: Analyze the impact of the dissolution of the Planning Commission on India's economic planning.

Answer: The dissolution of the Planning Commission in 2015 and the establishment of NITI Aayog marked a shift in India's economic planning paradigm. The transition aimed to promote cooperative federalism, allowing states greater autonomy in planning and implementation. NITI Aayog emphasizes evidence-based policy-making, performance monitoring, and fostering public-private partnerships. While this shift has led to increased flexibility and responsiveness, challenges remain, such as ensuring equitable resource distribution and addressing regional disparities. The effectiveness of this new structure in fulfilling the developmental goals set by the Planning Commission will require continuous evaluation.

Q3: Discuss the role of the Planning Commission in shaping India’s social policies.

Answer: The Planning Commission played a vital role in shaping India's social policies by integrating socio-economic considerations into its five-year plans. It focused on poverty alleviation, education, health care, and women’s empowerment, identifying critical areas needing intervention. The Commission facilitated the allocation of resources towards social sectors and promoted programs aimed at improving living standards. However, its top-down approach often led to inadequate engagement with grassroots realities, resulting in challenges in implementation. The transition to NITI Aayog seeks to enhance inclusivity and responsiveness in social policy formulation by encouraging broader stakeholder participation.

Previous Year Questions on  Planning Commission

1. UPSC CSE 2018

Question: "Evaluate the impact of the Planning Commission on India's economic growth."

Answer: The Planning Commission has had a profound impact on India's economic growth since its inception in 1950. By formulating five-year plans, it played a crucial role in resource allocation and policy direction aimed at industrialization and agricultural development. The Commission emphasized public sector investment and initiated programs for poverty alleviation and social development. Although it contributed to substantial GDP growth, it also faced criticisms regarding inefficiencies and regional disparities. The shift to NITI Aayog represents an attempt to address these issues, promoting decentralized and participatory planning that may enhance future economic growth.

2. UPSC CSE 2019

Question: "Discuss the relevance of the Planning Commission in the context of modern economic challenges." 

Answer: The Planning Commission was instrumental in shaping India's economic policies; however, its relevance has evolved with changing economic challenges. Modern challenges such as globalization, technological advancements, and climate change require adaptive and flexible planning frameworks. The transition to NITI Aayog reflects this need, focusing on dynamic strategies that incorporate public-private partnerships and innovative solutions. While the legacy of the Planning Commission laid the groundwork for development, addressing contemporary issues requires collaborative efforts that consider regional disparities and sustainable practices. Thus, its foundational principles remain relevant as India navigates complex economic landscapes.