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Functions, Composition, Organization - Planning Commission of India | 12th Political Science : Chapter 8 : Planning and Development Politics

Chapter: 12th Political Science : Chapter 8 : Planning and Development Politics

Planning Commission of India

The Planning Commission had the function of assessing the resources of the nation so that they could be developed for the future needs of the country.

Planning Commission of India

The Planning Commission of India was set up in March 1950 by a resolution of the Government of India under the chairmanship of Pandit Jawaharlal Nehru the first Prime Minister of India, to prepare a plan for the “most effective and balanced utilization of the country’s resources”. The Planning Commission played an advisory role with regard to the formulation of the plans. It was the duty of the Central and state governments to implement the planning programmes.


Functions of Planning Commission

The Planning Commission had the function of assessing the resources of the nation so that they could be developed for the future needs of the country. These included material, capital and human resources. It was the primary duty of the Commission to prepare the plans so that these resources could be used in an effective and balanced manner. The resources had to be allocated among various sectors as per priorities and the stages of progress and completion of programmes was to be laid down to the Commission. The Commission had to identify the conditions and issues that would be a hindrance for development.

It had to examine the ways by which the plan could be effectively implemented in the prevailing conditions of the nation. It also determined the stage by stage execution of the plan. The planning process had to be assessed periodically so that right strategies could be used to implement the plans. In the process, the Planning Commission had the function of advising the central and state governments with regard to the appropriate strategies of planning. The Commission also had to analyse particular issues and advice on it to the government. It was the role of the Commission to determine the rate of growth of the economy specifying the targets of the plan period for every sector.


Composition and Organization

The Planning Commission consisted of the Prime Minister and four full time members and a few part time members who were of cabinet rank. The full time members were persons who have excelled in the technical field, economy and administration. The Prime Minister is the chairman of the Planning Commission enabling the coordination of the functions of the Commission.

As per the recommendations of the Administrative Reforms Commission changes were made in the composition of the Commission. It included the Prime Minister as the Chairman who presides over the meetings of the Commission, a deputy chairman who is the de-facto executive head and who has the responsibility of formulating the drafts of the plan to the central cabinet, a secretary, four full time members and some cabinet ministers as part-time members. The Finance Minister and Planning Minister are ex-officio members of the Commission and a member secretary who is usually a senior IAS officer are also part of the Commission. The functioning of the administration was coordinated by the additional secretary. Senior officers in the ranks of deputy secretaries and under secretaries had to monitor the progress of the programmes. There were no representatives from the state government and it was a central body.

The Planning Commission of India worked on the principle of collective responsibility. It had three organs namely the General Division, Subject Division and the Administrative Division. The General Division relates to the entire economy and Subject Divisions concerns with specific areas of development like food and agriculture, power and irrigation, transportation etc. The Commission also includes the General administration branch and Evaluation Divisions.

Along with these, various other bodies also worked with the Planning Commission for the formulation and execution of plans. They are;-

i) National Planning Council

The National Planning Council was constituted during the Fourth Plan in 1965. It consisted of experts in science, engineering and economics and worked on areas that include agriculture, land reforms, irrigation, education, employment, industry, trade, management, family planning, social welfare, natural resources, transport and international trade. It was the responsibility of each of these groups to study in detail the needs of each of the areas and give the data to the Planning Commission.

ii) National Development Council (NDC)

The National Development Council included all the Chief Ministers of the States along with the Prime Minister as its chairman. The inclusion of the states enables the implementation of the plans in the respective states. Some cabinet ministers of the central government could also be present during the deliberations of the NDC. The NDC had the role of reviewing the implementation of the plans periodically and discusses various issues relating to the development of the state. It makes recommendations for the effective implementation of plans and also ensures involvement and support of the people in plan implementation. It works for effective administrative services and aims at developing resources that are essential for future development.


Efforts Towards Poverty Eradication

One of the major problems of India was poverty. The Planning Commission aimed not only at increasing the per capita income but also improving the quality of life of the people. Growth of the economy necessitated the inclusion of all sectors. It was also understood that the quality of life of the common man was interrelated to his economic conditions. So, it was realised by the state that it was important to guarantee people a decent standard of living along with proper access to education and health care which are next to food, clothing and shelter. But the challenge was that economic growth and reduction of poverty are not always related. From the fourth five year plan, the government focussed on this issue and concentrated on ‘garibi hatao’ during the early1970’s.

Employment generation was considered to be one of the measures for reduction of poverty. There were many problems due to unemployment and underemployment. In all the five year plans emphasis was given to employment.


Ensuring Social Justice

Article 38(2) states “The State shall, in particular, strive to minimize the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations”. This was kept in mind by the planners in formulating each of the plans.

Ensuring social justice has gone hand in hand with economic planning. Along with measures for development, it is also important to give equal opportunities to all with regard to education and employment. The establishment of a socialistic pattern of society ensured that there will be no concentration of wealth in the hands of a few so that exploitation and oppression could be ended.

Historically, the Indian society has fostered exploitation and suppression of one section by another. It was a challenge to the constitution makers to tackle all these traditional forces and social evils so that social and economic justice could be realized. The justiciable rights under Part III of the constitution dealing with Fundamental rights enables the citizens to get protection for all the rights required to live a complete life. The non-justiciable rights under Part IV on Directive Principles of State Policy ensures that the system functions in such a way that the inequalities of income among people is reduced and an egalitarian society is established.

The rural urban divide was another important area where the Planning Commission had to concentrate. In the process of economic development, industrialization and urbanization increased and this had its impact on the Indian society and economy. Disparity in the development of the rural and urban population would foster inequality which is against the principle enshrined in the constitution. The Planning Commission recommended many programmes for the development of the rural economy so that the development of both the rural and urban population could be ensured.

Manual Scavenging

State instrumentalities and contractors engaged by them are under a constitutional obligation to ensure the safety of persons who are asked to undertake hazardous jobs such as manual scavenging, the Supreme Court said in a landmark judgment seven years ago. But, India continues human beings as manual scavenger in many cities.

The 2018 Global Multidimensional Poverty Index (MPI)

The 2030 Agenda for Sustainable Development reaffirmed the importance of multi-dimensional approaches to poverty eradication that go beyond economic deprivation. The 2018 MPI answers the call to better measure progress against Sustainable Development Goal 1 – to end poverty in all its forms; and opens a new window into how poverty - in all its dimensions – is changing. With the 2018 estimates, the MPI measures acute multidimensional deprivations in 105 countries covering 77 percent of the global population.


Democratic Socialism

When India got independence, there were many problems that the nation had to handle. One among these problems was which would be the best strategy for long term development. Jawaharlal Nehru was the architect of planning in India. He was inspired by the soviet model of planning and was also inspired by the liberal principles of capitalism. He wanted to bring the two ideas together in India which was termed as democratic socialism.


Mixed Economy

The idea of a mixed economy was thus adopted which included the liberal policy of encouraging private enterprises and also promoting the public sector for the good of the society by socializing the means of production and giving powers to the state to have control over the economy. India is an inspiration to many nations for the idea of a mixed economy.

The Industrial Policy Resolution of 1956 was adopted by the Indian Parliament in April 1956. It was a guideline for the economic policy of the country. The five year plans were made on the basis of this resolution. It emphasised on more powers to the governmental machinery so that a socialistic pattern of society could be realized. The industries were divided into three categories. Firstly, there were industries which were entirely state owned. Secondly the category of industries which were state owned but the public enterprises could also be included and thirdly industries which were with the private sector. The state had control over all the industries and the third category of industries could not function only for self interest or profit motives but were regulated for the interest of the entire society. The welfare of the community was the top priority.

Planning was considered to be a prerequisite for a mixed economy. As the benefits of the public sector and the private sectors were to be integrated for the welfare of the community, the Five Years Plans were formulated in such a manner that the objectives of economic growth and social justice could be achieved. It also made the governments to formulate appropriate plans and adopt right strategies to bring about development in the right manner.

After the introduction of economic reforms in 1991 by the Congress government led by Prime Minister P. V. Narasimha Rao, a new industrial policy was announced in July 1991 which aimed at taking steps to reduce bureaucratic control over the Indian industrial economy and liberalization so that the Indian economy could be integrated with the world economy. Restrictions on direct foreign investment was removed. The reforms in the industrial policy was reflected in areas such as industrial licensing, foreign investment, foreign technology policy and public sector policy.

The seventh Five year plan got completed in 1990. Due to the economic condition of the country, the eighth five year plan could not be introduced in 1990. In the years 1990-91 and 1991-92 annual plans were formulated. The eighth five year plan was implemented in 1992.



The National Institution for Transforming India

In 2015, the Government of India made a shift in its approach towards planning. It introduced a new Commission called the NITI Aayog (National Institution for Transforming India) which replaced the Planning Commission. It was formed with the idea of making the entire planning process more decentralized. In such a system the states could be involved in the formulation and implementation of developmental plans in a better manner. It aims at cooperative federalism where the states can play a wider role. It also focuses on need specific plans making the entire process inclusive so that all sections of the population could be a part of the developmental process.

The NITI Aayog functions as a think tank of the government. It has the function of providing the central government and the state governments with relevant and strategic technical advice relating to policy making. It advices on all issues of national and international importance and analyses on the best practices from our own country and from other nations of the world. The Government issued a resolution of the Union Cabinet on 1st January, 2015 by which the Planning Commission was replaced by the NITI Aayog.



The Prime Minister is the Chairman of the NITI Aayog. He appoints a Vice-Chairman. There are 5 full time and 2 part time members. It has a Governing Council which consists of the Chief Ministers of all the states and Lt. Governors of Union Territories. The Regional Councils are formed to address specific issues relating to the states or a region. It functions for a specific period of time. The Prime Minister has the power to invite experts, specialists and practitioners on particular domains as special invitees. The part time members are from leading universities and research organizations. Four members of the Union Council of Ministers are also nominated as ex-officio members. It also comprises of a Chief Executive officer(CEO).

The plurality and diversity of the Indian state was recognized by the government. The nature of each of the States and Union Territories is different. The needs of the people are different, the geographical condition of each of the regions vary and the economic conditions are different. Some states are more developed than other states. So, the government realized that a uniform plan of development for the entire nation is not a right approach and will not give desired results. Thus,the NITI Aayog was formed so that the needs of each of the regions could be addressed in the right manner.

Why NITI Aayog Replaced Planning Commission: Reasons

1. The new National Institution for Transforming India (NITI) will act more like a think tank or a forum, in contrast with the Commission which imposed five-year-plans and allocated resources to meet set economic targets.

2. NITI will include leaders of India’s 28 states and 9 union territories. Its full-time staff - a Deputy Chairman, Chief Executive Officer and experts - will answer directly to the Prime Minister, who will be the Chairman. It is different from Planning Commission.

3. The major difference in approach to planning between NITI Aayog and Planning Commission is that the former will invite greater involvement of the states, while the latter took a top-down approach with a one-size-fits-all plan.

4. The Planning Commission’s role was formulation of broad policy and its capacity was more advisory. NITI Aayog shall have powers for resource allocation to states, based on their respective needs.

5. The states had little direct say in policy planning, which was the purview of the Planning Commission. Involvement of the states was indirect through the National Development Council; which is not the case in the NITI Aayog.


Objectives of NITI Aayog

The objectives of the NITI Aayog are:

·           TO include the States in the planning process so that the Central government along with the State governments could identify developmental priorities and strategies. This would foster cooperative federalism as the states would be a part of the planning process. TO formulate credible plans at the village level and aggregate it progressively. TO ensure that the interests of national security are incorporated in economic strategy and necessary checks on indiscriminate tampering with ecology and environment policy and to check whether all sections of the population are benefitted from economic progress.

·           Long term policy and programme frameworks to be designed and their progress would be monitored by the Aayog and innovative improvements would be made. Partnership between key stakeholders, like-minded think tanks, educational and policy research institutions to be encouraged and knowledge, innovation and entrepreneurial support system to be created through a community of national and international experts, practitioners and other partners.

·           The Commission also offers platform for resolution of inter-sectoral and inter-departmental issues so that the developmental programmes can be accelerated. It maintains a state-of art resource centre which will work for research on good governance and best practices in sustainable and equitable development. It will monitor and evaluate the implementation of the programmes so that needed resources could be identified.

·           The NITI Aayog also emphasises on technology upgradation and capacity building for implementation of programmes and initiatives. TO undertake other activities that are necessary to further the execution of the national development agenda.

·           Some of the initiatives of the NITI Aayog include “15 year road map”, 7 year vision, Atal Mission for Rejuvenation and Urban Transformation(AMRUT), Digital India, Atal Innovation Mission etc. The NITI Aayog signed the Sustainable Development Framework for 2018-2022. The commitment of the government in attaining the sustainable development goals is reflected by this. The areas that are focussed are poverty and urbanization, health, water and sanitation, education, job creation, gender equality, youth development.

·           The Planning Commission was set up by a resolution of the Government of India in 15th March 1950. It has been replaced by the National Institution for Transforming India, also called NITI Aayog. It was formed via a resolution of the Union Cabinet on January 1, 2015. The Prime Minister of India serves as the Chairperson of NITI Aayog.

2018 MPI: dimensions, indicators, deprivation cutoffs, and weights

The MPI looks beyond income to understand how people experience poverty in multiple and simultaneous ways. It identifies how people are being left behind across three key dimensions: health, education and standard of living, comprising 10 indicators. People who experience deprivation in at least one third of these weighted indicators fall into the category of multidimensionally poor.


Activity: Identify the specific target and achievement focus of each of the 12 Five Year Plans.



Topic 1 : Human development is the essence of social development

Topic 2 : Money cannot buy all the goods and services that one needs to live well.


I am thinking of how to encourage our citizens to spend to get the economy moving.

As a class, discuss what you already know or think about the following topics:

1. Economic activities of the State

2. Social welfare of the people

3. Importance of economic development

4. Socio-economic justice

5. Employment

Activity: Have a discussion on the working of NITI Aayog in your class under the guidance of your teacher.

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