Lecture 8 - Planning in India | Indian Economy - In Depth Analysis - Economics PDF Download

 Page 1


Planning in India  
Institute of Lifelong Learning, University of Delhi 
 
 
 
 
  
 
 
 
 
                             
                                                
 
 
Planning in India  
Lesson Developer: Rakesh Kumar Singh 
College/Department: Ramanujan College, University of Delhi 
 
 
 
 
 
 
 
Page 2


Planning in India  
Institute of Lifelong Learning, University of Delhi 
 
 
 
 
  
 
 
 
 
                             
                                                
 
 
Planning in India  
Lesson Developer: Rakesh Kumar Singh 
College/Department: Ramanujan College, University of Delhi 
 
 
 
 
 
 
 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 
 
 
Table of Contents 
1. Learning outcomes 
2. Introduction and objectives of  Planning 
3. Strategy of Planning 
4. Broad achievements and failures of planning 
5.  Five year plan 
i) Targets 
ii) achievements 
6. New economic reforms 
i. Liberalization 
ii. Privatization 
iii. Globalization 
7. Rationale behind economic reforms 
8. Progress of Privatization and Globalization 
9. Recent development in planning :NITI Aayog 
10. Summary 
11. Exercise 
12. Glossary 
13. References 
 
 
 
1. Learning outcomes 
Page 3


Planning in India  
Institute of Lifelong Learning, University of Delhi 
 
 
 
 
  
 
 
 
 
                             
                                                
 
 
Planning in India  
Lesson Developer: Rakesh Kumar Singh 
College/Department: Ramanujan College, University of Delhi 
 
 
 
 
 
 
 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 
 
 
Table of Contents 
1. Learning outcomes 
2. Introduction and objectives of  Planning 
3. Strategy of Planning 
4. Broad achievements and failures of planning 
5.  Five year plan 
i) Targets 
ii) achievements 
6. New economic reforms 
i. Liberalization 
ii. Privatization 
iii. Globalization 
7. Rationale behind economic reforms 
8. Progress of Privatization and Globalization 
9. Recent development in planning :NITI Aayog 
10. Summary 
11. Exercise 
12. Glossary 
13. References 
 
 
 
1. Learning outcomes 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
After reading this lesson one would be able to understand the planning system of 
India, changes introduced in the planning system  over the last six decades. Further, 
one would be able to understand Indian economy in light of liberalization, privatization 
and globalization. At the same time one would be able to understand the recent 
changes in planning structure in India in which the erstwhile planning commission is 
being replaced by National Institution for Transforming India (NITI) Aayog in which 
the top down approach is being replaced by bottom up approach. In this the states will 
be empowered to take more decisions. 
2. Introduction of Planning 
Economic planning is the process under which a central authority defines a set of 
targets related to growth and development of the country to be achieved within a 
specified time frame keeping in view the needs and means of the country. 
 
The basic objectives of Indian planning are growth, self reliance, social and 
economic justice and modernization. These objectives are in fact, the major principles 
of Indian planning structure. Within this basic purview of objectives, each 
development plan lists some priorities in the view of immediate necessities and 
limitations. Following are the four key objectives of Indian planning system 
 
? Economic Growth 
? Modernization 
? Self-reliance 
? Social  Justice 
 
The above four points are the important ideals of the socialistic pattern of economic 
development. Nehruvian model of planning emphasized upon the above points for 
taking India to the higher echelon of development. 
 
 
                  
Page 4


Planning in India  
Institute of Lifelong Learning, University of Delhi 
 
 
 
 
  
 
 
 
 
                             
                                                
 
 
Planning in India  
Lesson Developer: Rakesh Kumar Singh 
College/Department: Ramanujan College, University of Delhi 
 
 
 
 
 
 
 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 
 
 
Table of Contents 
1. Learning outcomes 
2. Introduction and objectives of  Planning 
3. Strategy of Planning 
4. Broad achievements and failures of planning 
5.  Five year plan 
i) Targets 
ii) achievements 
6. New economic reforms 
i. Liberalization 
ii. Privatization 
iii. Globalization 
7. Rationale behind economic reforms 
8. Progress of Privatization and Globalization 
9. Recent development in planning :NITI Aayog 
10. Summary 
11. Exercise 
12. Glossary 
13. References 
 
 
 
1. Learning outcomes 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
After reading this lesson one would be able to understand the planning system of 
India, changes introduced in the planning system  over the last six decades. Further, 
one would be able to understand Indian economy in light of liberalization, privatization 
and globalization. At the same time one would be able to understand the recent 
changes in planning structure in India in which the erstwhile planning commission is 
being replaced by National Institution for Transforming India (NITI) Aayog in which 
the top down approach is being replaced by bottom up approach. In this the states will 
be empowered to take more decisions. 
2. Introduction of Planning 
Economic planning is the process under which a central authority defines a set of 
targets related to growth and development of the country to be achieved within a 
specified time frame keeping in view the needs and means of the country. 
 
The basic objectives of Indian planning are growth, self reliance, social and 
economic justice and modernization. These objectives are in fact, the major principles 
of Indian planning structure. Within this basic purview of objectives, each 
development plan lists some priorities in the view of immediate necessities and 
limitations. Following are the four key objectives of Indian planning system 
 
? Economic Growth 
? Modernization 
? Self-reliance 
? Social  Justice 
 
The above four points are the important ideals of the socialistic pattern of economic 
development. Nehruvian model of planning emphasized upon the above points for 
taking India to the higher echelon of development. 
 
 
                  
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 2. Strategy of Planning 
Strategy of planning means the actions and policies adopted to achieve the objectives 
of the planning. During the last more than sixty years we cannot claim to have 
followed single strategy in planning objectives. The strategy of the Indian planning can 
mainly be categorized into two broad segments as mentioned below: 
? Phase of Control 
? Phase of De-regulation 
 
Phase of control: It mainly covers the time period from the advent of planning in 
1951 to mid 1980s.In this period the Indian economy witnessed the various restriction 
and constraints to the growth & expansion of private sector in production process. This 
was mainly done from the socialistic point of view for the welfare of larger sections of 
society. The major responsibility of the industrial and social development was on the 
shoulders of the public sector enterprises. 
Phase of De-regulation: After 1991 the economic reforms in the form 
liberalization, privatization, and globalization was introduced. The private sector and 
foreign MNCs were gradually given more freedom in deciding the means and mode of 
the production process. The form of planning changed from imperative and directive to 
indicative and supportive in nature. 
In the recent period the Indian economy has witnessed “sustainable development” as 
an important strategy of the planning process. Sustainable development is defined as 
“the development that meets the needs of the present without compromising the 
ability of future generation to meet their own needs.” The number of sectors for the 
pritave    production and distribution process has been increased. In a way it has 
deregulated the economy from the bureaucratic controls and boundations. 
                                
 
 
 
 
Page 5


Planning in India  
Institute of Lifelong Learning, University of Delhi 
 
 
 
 
  
 
 
 
 
                             
                                                
 
 
Planning in India  
Lesson Developer: Rakesh Kumar Singh 
College/Department: Ramanujan College, University of Delhi 
 
 
 
 
 
 
 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 
 
 
Table of Contents 
1. Learning outcomes 
2. Introduction and objectives of  Planning 
3. Strategy of Planning 
4. Broad achievements and failures of planning 
5.  Five year plan 
i) Targets 
ii) achievements 
6. New economic reforms 
i. Liberalization 
ii. Privatization 
iii. Globalization 
7. Rationale behind economic reforms 
8. Progress of Privatization and Globalization 
9. Recent development in planning :NITI Aayog 
10. Summary 
11. Exercise 
12. Glossary 
13. References 
 
 
 
1. Learning outcomes 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
After reading this lesson one would be able to understand the planning system of 
India, changes introduced in the planning system  over the last six decades. Further, 
one would be able to understand Indian economy in light of liberalization, privatization 
and globalization. At the same time one would be able to understand the recent 
changes in planning structure in India in which the erstwhile planning commission is 
being replaced by National Institution for Transforming India (NITI) Aayog in which 
the top down approach is being replaced by bottom up approach. In this the states will 
be empowered to take more decisions. 
2. Introduction of Planning 
Economic planning is the process under which a central authority defines a set of 
targets related to growth and development of the country to be achieved within a 
specified time frame keeping in view the needs and means of the country. 
 
The basic objectives of Indian planning are growth, self reliance, social and 
economic justice and modernization. These objectives are in fact, the major principles 
of Indian planning structure. Within this basic purview of objectives, each 
development plan lists some priorities in the view of immediate necessities and 
limitations. Following are the four key objectives of Indian planning system 
 
? Economic Growth 
? Modernization 
? Self-reliance 
? Social  Justice 
 
The above four points are the important ideals of the socialistic pattern of economic 
development. Nehruvian model of planning emphasized upon the above points for 
taking India to the higher echelon of development. 
 
 
                  
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 2. Strategy of Planning 
Strategy of planning means the actions and policies adopted to achieve the objectives 
of the planning. During the last more than sixty years we cannot claim to have 
followed single strategy in planning objectives. The strategy of the Indian planning can 
mainly be categorized into two broad segments as mentioned below: 
? Phase of Control 
? Phase of De-regulation 
 
Phase of control: It mainly covers the time period from the advent of planning in 
1951 to mid 1980s.In this period the Indian economy witnessed the various restriction 
and constraints to the growth & expansion of private sector in production process. This 
was mainly done from the socialistic point of view for the welfare of larger sections of 
society. The major responsibility of the industrial and social development was on the 
shoulders of the public sector enterprises. 
Phase of De-regulation: After 1991 the economic reforms in the form 
liberalization, privatization, and globalization was introduced. The private sector and 
foreign MNCs were gradually given more freedom in deciding the means and mode of 
the production process. The form of planning changed from imperative and directive to 
indicative and supportive in nature. 
In the recent period the Indian economy has witnessed “sustainable development” as 
an important strategy of the planning process. Sustainable development is defined as 
“the development that meets the needs of the present without compromising the 
ability of future generation to meet their own needs.” The number of sectors for the 
pritave    production and distribution process has been increased. In a way it has 
deregulated the economy from the bureaucratic controls and boundations. 
                                
 
 
 
 
                                    Planning in India 
         Institute of Lifelong Learning, University of Delhi 
 
 
 
3. Broad achievements and failures 
The 12
th
 five year plan is currently going on which extends till 2017. In the last six 
decades it would be difficult to say in one word whether the planning system has been 
successful or a failure. In economy, there is nothing called the black and white. It 
depends upon the circumstances as well as situation in which the plans were 
formulated and implemented. The long term objectives of the planning like removal of 
poverty, inequality, unemployment is yet to be achieved. The short term objective of 
planning like enhancing the agricultural growth, industrial production has been 
achieved in patches during different plan periods. 
                               There has been a considerable rise in the net domestic product, 
saving and investment. At the same time in current scenario, due to unfulfilled dream 
of land reforms, there is unequal land ownership along with high level of inequality 
and poverty in India. There has been no substantial increase in the standard of living 
of people in the last six decades. Five year plans in India, although inspired by 
socialistic approach failed to reduce the poverty and inequality to desired levels. The 
eleventh and twelfth plan have emphasized on the sustainable development and 
inclusive growth. It requires a holistic approach which must involve the active 
participation of the private and public sector as well as people. 
                                 In short, one can say that the planning process has achieved 
the short term objectives to some extent but the long term objectives are yet to be 
attained. In the post reform period it will require the active participation of the 
government, private sector as well as all stakeholders.One of the failures of planning 
is to promote the balanced growth and development in India.The regional  disparity 
has remained more or less same even after the six decades of the planning.Agriculture 
sector which employs the nearly sixty five percent of the labour force has been 
overshadowed by the industry.There has been huge politicization of the planning 
process in India.Apart from these the other major points are the faulty industrial 
location policy,wrong financial strategy and excessive emphasis on PSUs in due course 
of planning in India.