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Introduction

  • The Soviet Union pioneered national planning with the commencement of the First Soviet Plan in 1928.
  • The rest of the world gained awareness of development planning in the 1930s, influenced by Eastern European economists migrating to Britain and the United States.
  • Colonial nations and democracies, particularly those with socialist-leaning leaders in former British colonies, were fascinated by the idea of economic planning.
  • The 1930s in India saw various ideologies, including capitalists, socialists, and democrats, advocating for economic planning.
  • Independent India was destined to be a planned economy, and the entire economic history of the country is closely linked to planning.
  • Economic reforms in 1991-92 were influenced by the Planning Commission (PC), which had already outlined the groundwork for changes.
  • The PC, despite being a political body, consistently emphasized sound economic principles and played a vital role in shaping the direction of reforms.
  • Exploring the history of planning in India provides insights into the intersection of politics and economics and the ongoing evolution of the planning process.

Background

  • In the 1930s, the concept of planning firmly established itself in the intellectual and political discourse of India.
  • Numerous proposals advocating the immediate implementation of planning in India emerged during this period.
  • The British government at the time showed minimal responsiveness to these suggestions.
  • Despite initial disregard, these modest proposals for planning proved instrumental when India gained independence and committed to embracing a planned economy.

The Visvesvaraya Plan

  • Proposed by civil engineer and former Dewan of the Mysore state, M. Visvesvaraya.
  • Advocated comprehensive economic planning for India's development.
  • Federation of Indian Chambers of Commerce and Industry (FICCI), under N. R. Sarkar, emphasized the need for a National Planning Commission.
  • Signaled a departure from laissez-faire principles, recognizing the end of unregulated economic policies.

The Congress Plan

  • National Planning Committee (NPC) formed in 1938 under J. L. Nehru's leadership.
  • Subhash C. Bose's initiative played a crucial role in its establishment.
  • NPC, with 15 members and 29 sub-committees, produced comprehensive recommendations for development.
  • Interrupted by World War II and the Quit India Movement, with the final report published in 1949.
  • NPC's work laid the foundation for coordinated planning in independent India.

The Bombay Plan

  • "A Plan of Economic Development for India" published in 1944-45.
  • Prepared by leading capitalists including J.R.D. Tata, G.D. Birla, and others.
  • Emphasized principles in agreement with NPC, such as agrarian restructuring, rapid industrialization, and social welfare measures.
  • Both the NPC and the Bombay Plan favored an active role for the state in the economy.
  • Aimed to address inequalities and promote overall development, with a focus on a unified and coordinated approach.

The Gandhian Plan

  • Formulated by Sriman Narayan Agarwal in 1944, the Gandhian Plan reflects the spirit of Gandhian economic thinking.
  • Emphasizes agriculture and promotes cottage and village-level industries, in contrast to the NPC and Bombay Plan's focus on heavy and large industries.
  • Advocates for a "decentralized economic structure" in India with "self-contained villages," differing from the centralization proposed by the NPC and Bombay Plan.
  • Gandhi's perspective, as articulated in the Gandhian Plan, opposes centralization, dominant economic roles, and industrialization, viewing machinery and centralized state power as curses imposed by European colonialism.

Ramesh Singh Summary: Planning in India- 3 | Famous Books for UPSC Exam (Summary & Tests)

  • Gandhi argued that industrialization itself, rather than the inability to industrialize, was the root cause of Indian poverty.
  • Congress, until the 1940s, aligned with Gandhi's views to mobilize against colonial rule, but the NPC represented a departure from these ideas.
  • J. C. Kumarappa, the lone Gandhian on the 15-member NPC, questioned the authority to discuss industrialization, leading to an ideological impasse.
  • Nehru intervened to normalize the impasse, acknowledging that while large-scale industry should be promoted, it should not conflict with cottage industries.
  • The Gandhian Plan serves as an expression of the Gandhian view on planning, providing an ideological alternative during this period.

The People's Plan

  • In 1945, the radical humanist leader M. N. Roy formulated another plan as the Chairman of the Post-War Reconstruction Committee of the Indian Trade Union.
  • This plan, based on Marxist socialism, emphasized the need for economic development in both agricultural and industrial sectors.

Karl MarxKarl Marx

  • Many economists attribute the socialist inclinations of Indian planning to M. N. Roy's plan.
  • The common minimum programs of the United Front Government in the mid-1990s and the United Progressive Alliance in 2004 are believed to have drawn inspiration from M. N. Roy's plan.
  • The slogan "Economic reforms with the human face," associated with the economic reforms of the early 1990s, also resonates with the principles of the People's Plan formulated by M. N. Roy.
  • The People's Plan aimed to provide the people with basic necessities while incorporating Marxist socialist ideals into India's economic framework.

The Sarvodaya Plan

  • Formulated by socialist leader Jayaprakash Narayan in January 1950.

  • Inspired by Gandhian techniques, community works, and the Sarvodaya concept of Acharya Vinoba Bhave.

  • Emphasized agriculture and cottage industries, self-reliance, and minimal dependence on foreign capital and technology.

  • Advocated for land reforms, self-dependent villages, and decentralized participatory planning.

  • Some ideas gained importance during the promotion of the Five-Year Plans.

  • Jayaprakash Narayan became critical, especially of increasing centralization in the 1960s.

  • Disliked by established power structures, including MLAs/MPs, bureaucracy, and state-level politicians.

Jayaprakash NarayanJayaprakash Narayan

  • Jayaprakash Narayan Committee (1961) opposed the centralizing nature of Indian planning.

  • Advocated for Panchayati Raj as the agency for planning and execution.

  • Urged against individual allocations, favoring a more integrated approach.

  • The government introduced schemes (SFDA, DPAP, ITDP, IADP) outside the Panchayats' purview, disregarding committee advice.

  • Constitutional Amendments (1992) recognized local bodies' role and importance in planned development.

  • Jayaprakash Narayan's views on decentralization were vindicated.

  • Shift towards a more inclusive and participatory planning approach.

  • Local bodies gained significance in the planning process post-amendments.

  • This is in contrast to the earlier exclusion of schemes from Panchayats' purview.

  • Highlights the evolving nature of Indian planning and governance.

  • The evolution from the Sarvodaya Plan's emphasis to Jayaprakash Narayan's critique and subsequent constitutional amendments reflects a dynamic shift in planning philosophy towards decentralization and local governance.


Some Area-wise Reports

  • Planned development gained popularity in India by the 1940s, prompting the government to take planned actions.
  • Several area-specific reports were published in the 1940s, covering topics such as rural credit, agricultural development, prices, cooperatives, and irrigation.
  • Despite careful preparation, the government displayed limited enthusiasm for implementing these reports initially.
  • Independent India benefited when planning expanded to cover various areas of concern.
  • Before independence, there was a consensus on principles such as central planning for socio-economic development, the need for controls and licensing, and the establishment of basic industries.
  • An evolutionary agreement on economic planning occurred in the two decades before independence.
  • The Constitution outlined the pattern of the envisaged welfare state and fundamental principles related to planning.
  • Economic reforms marked a U-turn in the planning process since the early 1990s.
  • The government, in its resolution announcing the setting up of the Planning Commission (March 1950), referred to constitutional provisions on socio-economic objectives.
  • The First Five-Year Plan (1951-56) emphasized the elimination of poverty and inequalities through economic and social change.
  • Subsequent plans reiterated the basic objectives, focusing on sustained growth, poverty alleviation, employment generation, and creating a self-reliant economy.
  • Concerns raised by the New Economic Policy (NEP) in 1991 were addressed in subsequent plans.
  • Private participation was emphasized while maintaining the fundamental objectives of planning.
  • The Ninth Plan (1997-2002) reiterated the goals set by Panditji, acknowledging lessons from previous plans.
  • The six major objectives of planning in India include economic growth, poverty alleviation, employment generation, controlling economic inequality, self-reliance, and modernization.
  • Self-reliance was defined as avoiding economic imperialism.
  • The Atmanirbhar Bharat Abhiyan (May 2020) renewed the focus on self-reliance amid COVID-19 disruptions.
  • Coordinating self-reliance with globalization remains a challenge.
  • Modernization is crucial, especially in the agriculture and education sectors.
  • The objectives of Indian planning reflect the spirit of the Preamble, Directive Principles, Fundamental Duties, and Rights.

[Question: 960657]


Functions of the Planning Commission

  • The Planning Commission (PC), initially established for planning purposes, expanded its functions significantly, becoming an extensive administrative body.
  • Referred to as the "economic Cabinet of the country," the PC's influence extended even to constitutional bodies like the Finance Commission, raising concerns about its lack of accountability to Parliament.
  • Over time, the PC evolved into a bureaucratic organization, prompting criticism from leaders like Nehru for its transformation into a government department.
  • Despite its initial purpose, the PC's functions expanded to include timely changes in planning needs during the reform era.
  • The official order outlined the PC's functions, emphasizing assessments of resources, formulation of effective plans, determination of priorities, and monitoring progress.
  • With the Tenth Plan (2002-07), two new functions were added: monitoring plan implementation, especially in the context of "economic reforms," and overseeing the progress of various central ministries.
  • The redefinition of the state's role in the economy during economic reforms led to doubts about the relevance of planning, but the PC adapted to maintain its significance.

The Planning Commission will:

  1. Assess the material, capital, and human resources of the country.
  2. Formulate a plan for the most effective and balanced utilization of the country’s resources.
  3. Define the stages in which the plan should be carried out and propose the allocation of resources for each stage.
  4. Indicate factors retarding economic development and determine conditions necessary for successful plan execution.
  5. Determine the nature of machinery required for plan implementation.
  6. Appraise progress and recommend adjustments in policy and measures.
  7. Make interim or ancillary recommendations based on economic conditions, policies, and specific problems referred by governments.

Two new functions solidified the PC's position as a key player in shaping economic policies and monitoring progress at both the central and state levels.

In summary, the PC transformed from a planning body to a comprehensive entity shaping economic policies at both the central and state levels.

[Question: 960657]


An Epitaph to the Planning Commission

  • On January 1, 2015, the PC was formally abolished, and replaced by the newly created NITI Aayog, marking the end of an era in independent India's economic history.
  • The decision to abolish or revive the PC sparked debates among experts, politicians, and the media, with emotional tones at times.
  • The government's rationale behind abolishing the PC is discussed in detail in the final section titled "NITI Aayog" in this chapter.
  • The Independent Evaluation Office (IEO) submitted a report to the Prime Minister's Office in June 2014, considering the PC as a hindrance rather than a help to India's development in its current form and function.
  • The IEO recommended scrapping the PC and replacing it with the Reform and Solutions Commission (RSC), an expert-staffed body free from ministerial-administrative structures.
  • The RSC would have full-time representation from major trade and industry organizations, civil society representatives, and academics, capturing concerns and benefiting from expertise in formulating a long-term strategy.
  • The proposed functions of the RSC include serving as a solutions exchange, providing ideas for integrated systems reform, and identifying new challenges with preemptive solutions.
  • The IEO suggested transferring the current functions of the PC to other bodies better designed for those tasks.
  • State governments, having better information about local requirements and resources, should be allowed to identify priorities and implement reforms independently of central institutions' mandatory directives.
  • The task of long-term economic thinking and coordination could be performed by a new government-established body acting solely as a think tank.
  • The Finance Commission should become a permanent body responsible for allocating centrally collected revenue to states, while the Finance Ministry handles fund division among central ministries.
  • The recommendations of the IEO on the PC were surprising and, to some, shocking. The effectiveness of the new body, NITI Aayog, in achieving its desired aims remains to be evaluated and analyzed in the future.

[Question: 960657]


National Development Council

  • Established on August 6, 1952, by a Cabinet Secretariat Resolution.
  • Formed in response to unique challenges faced by a nascent democracy and a fledgling economy.
  • Recommended by the First Plan for a forum like NDC.
  • NDC served as a platform for the Prime Minister, Chief Ministers, and PC members to review and cooperate on the plan's implementation.
  • Central Plans required state participation.
  • Decentralizing the planning process was a significant challenge.
  • Needed a unified outlook for the planning process in the federal system.
  • Initially comprised the Prime Minister, Chief Ministers, and PC members.
  • Later reconstituted with broader representation.
  • The Secretary of the PC acted as the Secretary to the NDC.
  • Consideration of plan proposals at important stages.
  • Periodic review of plan implementation.
  • Addressing key social and economic policy questions.
  • Recommending measures for achieving national plan aims and targets.
  • NDC played a crucial role in early planning.
  • Diminished significance after Nehru's era.
  • Degradation in principles of cooperative federalism.
  • Revival in the mid-1990s due to economic reforms, constitutional amendments, and coalition politics.
  • Increased autonomy for states in economic matters.
  • Constitutional compulsion for local-level planning.
  • Coalition politics influenced favorability towards states.
  • The last three five-year plans (Tenth, Eleventh, and Twelfth) were adopted with consensual support.
  • Enhanced federal maturity in development planning.
  • NDC had its last meeting in December 2012.
  • Future prospects are uncertain, the possibility of abolition or merging with NITI Aayog.
  • NITI Aayog was created as a successor to the NDC in 2015.
  • Continues the role of a policy think tank for development planning.
  • Debates on whether to revive NDC or abolish it.
  • Independent Evaluation Office (IEO) recommendations favored scrapping and replacing with a new body.
  • IEO highlighted hindrances rather than help in NDC's function.
  • Recommended a new body, the Reform and Solutions Commission (RSC), with expert representation and domain knowledge.
  • Evaluations are needed on the effectiveness of NITI Aayog compared to the former NDC.
  • Consideration of IEO recommendations for future planning bodies.

[Question: 960657]


NDC vs GC

  • NDC and Governing Council (GC) of the NITI Aayog differ in composition.
  • Members of the NITI are not its members, unlike the PC members who used to be part of the NDC.
  • Both aim to foster federal cooperation.
  • The GC reaches decisions without NITI members, making its functioning seem more effective.
  • GC's opinion is crucial for the NITI's desired functioning.
  • The government views NITI as the "State’s best friend at the Centre" (the 3rd function of the NITI).

Central Planning

At the national level, the organized initiatives are referred to as Central Plans. Over time, the central authority has introduced three distinct plans, and successive governments have consistently adhered to their execution. These three central plans include:

  1. Five-Year Plans,
  2. Twenty-Point Programme, and
  3. Member of Parliament Local Area Development Scheme.

The Five-Year Plans

  • Foremost among the central plans, this holds paramount significance.
  • Continuously implemented without interruption since the initiation of planning in India.
  • Recognized as a pivotal and enduring aspect of the country's political landscape.
  • The implementation of five-year plans in India has encountered various unstable and critical moments over time.
  • The history of these plans reflects the dynamic nature of the political process in the country.
  • Noteworthy developments related to planning have emerged during different periods.

A. First Plan

  • It was implemented during the period 1951-56.
  • Addressed economic challenges such as the need for large-scale foodgrains import (1951) and inflationary pressures.
  • Prioritized agriculture, emphasizing irrigation and power projects.
  • Approximately 44.6% of the plan outlay was allocated to public sector undertakings (PSUs).
  • Launched with ambitious goals for socio-economic development.
  • Unfortunately, the outcomes in the subsequent years were frustrating and fell short of expectations.

[Question: 960657]


B. Second Plan

  • Growth strategy emphasized rapid industrialization with a focus on heavy industries and capital goods.
  • Developed by Professor Mahalanobis.
  • Challenges arose due to the assumption of a closed economy, leading to shortages of food and capital.

C. Third Plan 

  • Incorporated the development of agriculture as a key objective in Indian planning.
  • Introduced, for the first time, the goal of balanced, regional development.
  • Faced a series of misfortunes, including two wars (with China in 1961-62 and with Pakistan in (1965-66) and a severe drought-led famine in the same period (1965-66).
  • Experienced heavy drain and diversion of funds.

D. Three Annual Plans 

  • Implemented consecutively from 1966 to 1969.
  • The Fourth Plan, ready for implementation in 1966, was deferred due to weak financial conditions and low morale after the defeat by China.
  • Government opted for Annual Plans for 1966-67 and the subsequent years due to financial constraints.
  • Broader objectives aligned with the design of the Fourth Plan, originally intended for 1966-71.
  • Some viewed this period as a discontinuity in the planning process, labeling it a "Plan Holiday."

[Question: 960657]


E. Fourth Plan

  • Based on the Gadgil strategy with a special focus on growth with stability and progress towards self-reliance.
  • Droughts and the Indo-Pak War of 1971-72 led to capital diversions, creating a financial crunch for the plan.
  • Marked the beginning of the politicization of planning and adopted a serious "populist" design in subsequent plans.
  • Witnessed frequent double-digit inflations, unrestrained increase in fiscal deficits, subsidy-induced higher non-plan expenditures, and the initial steps towards "nationalization" and greater control and regulation of the economy.
  • These features continued unchanged until the early 1990s, with planning becoming a tool of real politics and greater centralization plan after plan.


    F. Fifth Plan

    • Focused on poverty alleviation and self-reliance.
    • Launched the Twenty-point Programme (1975) with marginal importance given to the objective of "growth with stability" (a major objective of the Fourth Plan).
    • Planning process became more politicized.
    • Havocs of hyper-inflation prompted the government to assign a new function to the Reserve Bank of India (RBI) to stabilize inflation, a function continued to this day.
    • Initiated a judicious price-wage policy to curb inflation's impact on wage earners.
    • Despite various measures, witnessed an increase in socio-economic and regional disparities.
    • Continued the nationalization policy, and an overall decay in the quality of governance was observed.
    • Emergence of a "criminal-politician-bureaucrat" nexus for the first time to manipulate the political system.
    • Plan period disturbed by the draconian emergency and a change in the government at the center.

    [Question: 960657]


    G. Sixth Plan

    • Launched with the slogan of "Garibi Hatao" (alleviate poverty).
    • Emphasized socio-economic infrastructure in rural areas, eliminating rural poverty and regional disparities.
    • Introduced the Integrated Rural Development Programme (IRDP).
    • Commenced the "target group" approach and launched numerous national-level programs and schemes addressing specific concerns and areas of development.

    H. Seventh Plan 

    • Emphasized on rapid foodgrain production, increased employment creation, and general productivity.
    • Core planning principles of growth, modernization, self-reliance, and social justice remained guiding principles.
    • Launched the Jawahar Rojgar Yojana (JRY) in 1989 to create wage employment for the rural poor.
    • Existing programs like the IRDP, CADP, DPAP, and DDP were reoriented.
    • Government evaluated developmental programs, with a focus on democratic decentralization, leading to constitutional amendments 73rd and 74th by the early 1990s.
    • Despite better growth rates, fiscal imbalances led to an unfavorable balance of payments situation.
    • Heavy foreign loans during the plan created an unsustainable balance of payments and fiscal deficits.
    • The plan lacked a strong financial strategy, resulting in a crisis in the economy.

    [Question: 960657]


    I. Two Annual Plans 

    • The Eighth Plan (1990-95) faced delays due to fast-changing political situations and sweeping economic reforms in the late 1980s.
    • The new government in June 1991 decided to treat 1990-91 and 1991-92 as two separate Annual Plans.
    • Formulated within the framework of the Eighth Plan (1990-95) with a basic thrust on maximization of employment and social transformation.

    J. Eighth Plan 

    • Launched in a new economic environment amid ongoing economic reforms initiated in July 1991.
    • Structural adjustment and macro-stabilization policies were initiated to address worsening balance of payments, higher fiscal deficit, and unsustainable inflation.
    • The first plan to introspect macroeconomic policies pursued for decades.
    • Major concerns and suggestions included:
      1. Immediate re-definition of the state's role in the economy.
      2. Advocacy for market-based development, promoting a greater role for the private sector.
      3. Increased investment in infrastructure, especially in laggard states.
      4. Need to check rising non-plan expenditure and fiscal deficits.
      5. Restructuring and refocusing of subsidies.
      6. Immediate decentralization of planning.
      7. Greater emphasis on small and medium enterprises (SMEs).

    [Question: 960657]


    K. Ninth Plan 

    • Launched amid an all-round economic slowdown caused by the Southeast Asian Financial Crisis (1996-97).
    • Despite ongoing criticism of the liberalization process, the economy had moved past the fiscal challenges of the early 1990s.
    • Adopted a general nature of "indicative planning" with a focus on achieving an ambitious high growth rate (7 percent) and time-bound social objectives.
    • Emphasis on the seven identified Basic Minimum Services (BMS) with Additional Central Assistance (ACA), including:
      1. Safe drinking water.
      2. Primary health services.
      3. Universalization of primary education.
      4. Public housing assistance for the shelter-less poor families.
      5. Nutritional support to children.
      6. Connectivity of all villages and habitations.
      7. Streamlining of the Public Distribution System (PDS).
    • Fiscal consolidation became a top priority, focusing on:
      1. Sharp reduction in the revenue deficit through improved revenue collections and control of inessential expenditures.
      2. Cutting down subsidies and implementing user charges on economic services.
      3. Decentralization of planning and implementation through greater reliance on states and Panchayati Raj Institutions (PRIs).

    [Question: 960657]


    L. Tenth Plan 

    • Commenced with the objectives of greater participation of the National Development Council (NDC) in formulation.
    • Noteworthy steps indicating a change in the government's planning policy mindset:
      1. Doubling per capita income in 10 years.
      2. Acknowledging that higher growth rates are not the only objective; it should translate into improving the quality of life.
      3. Setting "monitorable targets" for eleven select indicators of development for the Centre and states.
      4. Recognizing "governance" as a factor of development.
      5. Increasing states' role in planning with greater involvement of Panchayati Raj Institutions (PRIs).
      6. Implementing policy and institutional reforms in various sectors, including PSUs, legal, administrative, and labor reforms.
      7. Declaring the agriculture sector as the Prime Mover of the economy.
      8. Placing increased emphasis on the social sector (education, health, etc.).
      9. Emphasizing the relevance between the processes of economic reforms and planning.

    M. Eleventh Plan:

    • Targets a growth rate of 10 percent and emphasizes "inclusive growth."
    • Concerns regarding realizing the growth targets due to the Fiscal Responsibility and Budget Management (FRBM) Act.
    • Recent economic aberrations increase concerns:
      1. Higher inflation (above 6 percent) leading to a tightening credit policy and lower investment.
      2. A stronger rupee causing a rapid shrinkage in export earnings.
      3. Costlier foodgrains and other primary articles impacting the poor.
      4. Costlier oil prices becoming a burden for the national exchequer.
    • Doubts expressed by the Confederation of Indian Industry (CII) and the World Bank regarding the realization of the ambitious 10 percent growth in the Eleventh Plan.

    [Question: 960657]

    N. Twelfth Plan (2012-17):

    • Draft Approach Paper prepared by the Planning Commission (PC) after extensive consultation involving over 950 civil society organizations and business associations.
    • Utilized modern electronic and social media, including Google Hangout, for citizen engagement and suggestions.
    • The Approach Paper emphasizes:
      1. Targeting a growth rate of 9 percent for the plan.
      2. Intensifying efforts for a 4 percent average growth in the agriculture sector during the plan period.
      3. Focusing on flagship programs to promote inclusiveness from the Eleventh Plan and improving their effectiveness through better implementation and governance.
      4. Addressing the challenge of meeting energy needs for rapid growth amid constrained domestic energy prices and rising world energy prices.
      5. Emphasizing the need for a holistic water management policy for efficient conservation and use in agriculture.
      6. Advocating for new legislation on land acquisition that balances fair compensation with the imperative for infrastructure development.
      7. Maintaining a focus on health, education, and skill development, with a call for adequate resources and efficient outcomes.
      8. Recognizing the necessity for large investments in infrastructure sector development and encouraging public investment and Public-Private Partnerships (PPPs).
      9. Highlighting the importance of the fiscal correction process, acknowledging resource limitations, and emphasizing careful prioritization.
      10. Emphasizing the efficient use of available resources in light of constraints.
      11. The NITI Aayog's appraisal document estimates a maximum growth rate of 7.75 percent for the Twelfth Plan.
      12. The document emphasizes the need for clear tax policies and a focus on the manufacturing sector.

    Twenty-Point Programme

    • The Twenty Point Programme (TPP), initiated in July 1975, is the second Central Plan designed for coordinated and intensive monitoring of various schemes by the Central and State governments.
    • The primary objective is to enhance the quality of life, particularly for those below the poverty line, through schemes related to poverty alleviation, rural employment generation, housing, education, family welfare, health, and environmental protection.
    • Restructured in 1982 and 1986, the program, known as 'TPP-86,' comprises 119 items grouped into 20 points, addressing rural life improvement. Evaluation includes 54 items based on evaluatory criteria, 65 against pre-set physical targets, and 20 crucial items monitored monthly.
    • Targets are set by Ministries at the Centre, in consultation with states and Union Territories, and allocations are made under various Five-Year Plans.
    • Renamed 'TPP-2006' to align with 21st-century challenges and economic reforms, reflecting the National Common Minimum Programme (NCMP) of the UPA Government.
    • The program takes a direct approach to combat rural poverty, influencing subsequent plans like the Sixth Plan (1980-85) launched with the slogan ‘Garibi Hatao.’
    • Implemented consistently by all political parties in power at the Centre, it faced recommendations for restructuring in mid-2015 due to perceived obsolescence.
    • The Ministry of Statistics and Programme Implementation (MOSPI), responsible for monitoring, suggested wrapping up the program due to its perceived lack of utility.
    • The Prime Minister’s Office (PMO) decided to 'restructure' based on the recommendations of the Inter-Ministerial Group actively working on the initiative.
    • Notably, the Government has also restructured 50 existing Centrally Sponsored Schemes (CSSs) into 30, facilitated by the active participation of the NITI Aayog’s Governing Council.

    [Question: 960657]


    MPLADS

    • Member of Parliament Local Area Development Scheme (MPLADS) is the latest among Central Plans, launched on 23 December 1993.
    • Initially, MPs were allotted ₹15 lakhs, increased to ₹1 crore in 1994-95, and later to ₹2 crores since 1998-99. In April 2011, the corpus was further enhanced to ₹5 crores with revised guidelines.
    • The scheme emerged in response to MPs' demands in the early 1990s, aiming to directly channel development benefits to the masses through their representatives.
    • MPs recommend works, focusing on creating fixed community assets based on locally identified developmental needs, to the District Magistrate under MPLADS.
    • The scheme is governed by comprehensive guidelines, revised in November 2005, with improved performance due to proactive policy initiatives, focused monitoring, and reviews.
    • Criticisms have arisen, including concerns about fund misappropriation or non-use, especially in backward states. Some advocate scrapping the scheme in favor of direct funds to local bodies for similar works.
    • Revised guidelines issued in May 2014 by MOSPI aim for simplicity, clarity, and understanding for all stakeholders.
    • Guidelines include a list of prohibited and permissible items under the scheme.
    • The ceiling for building assets by trusts and societies in tribal areas is increased from ₹50 lakh to ₹75 lakh to encourage their involvement in tribal welfare.
    • Cooperative Societies are made eligible under the MPLAD Scheme to support cooperative movement and rural development.
    • States can complete abandoned or suspended MPLAD work.
    • Funds can be allocated for natural and man-made calamities.
    • MPs can allocate funds outside their Constituency/State/UTs.
    • Convergence with other approved Central and State Government schemes, including MGNAREGA, is allowed.
    • Funds from local bodies can be pooled with MPLADS works.
    • Public and community contribution is permissible.
    • The "One MP-One Idea" annual competition encourages innovative solutions to local problems.
    • A proper mechanism for implementation and auditing has been established.
    • The list of indicative and illustrative projects under MPLADS has been expanded, covering infrastructure development, drinking water, education, roads, health, sanitation, and natural calamities for greater flexibility and dynamism.

    [Question: 960657]


    Niti Aayog

    • Mid-2014: India witnesses a stable government with a renewed mandate.
    • The new government demonstrates vigor and zeal in various areas, including attempts to redefine the federal polity for promoting growth and development.
    • There's a clear policy shift towards empowering states, providing them with more financial space and responsibilities.
    • As part of this shift, the Planning Commission (PC) is abolished, making way for a new body called the NITI Aayog (National Institution for Transforming India).
    • The government aims for the emergence of "Team India" within the NITI Aayog, emphasizing collaboration and collective efforts.
    • The transition from 'Planning to NITI' is a significant move, and its outcomes can only be conclusively judged over time.
    • India remains a planned economy in the interim.
    • The discussion is based on documents and releases from the Government of India before and after the NITI Aayog's establishment on January 1, 2015.
    • These documents outline the reasons behind the establishment of the NITI Aayog and articulate a non-traditional role/function for the new body.
    • The government's perspective is closely followed to capture the spirit of their thinking.

    Transforming India

    • Government aims at transforming the development agenda.
    • Slogan: 'From Planning to NITI.'
    • Paradigm shift over six decades in politics, economy, society, technology, demography.
    • NITI Aayog's role as a catalyst for development, nurturing enabling environment.
    • Foundations:
      1. Equal Partners: States as equal partners in national development.
      2. Knowledge Hub: Internal and external resource repository, think tank for good governance.
      3. Collaborative Platform: Facilitating implementation, monitoring, joint pursuit of goals.

    Changing Contours of India

    1. Acknowledgment of PC's Service:

      • Recognition of Planning Commission's contribution.
    2. Transformational Forces in Six Areas:

      • Demographic Shift:
        • Population growth to 121 crores.
        • Urban population addition of over 30 crores.
        • Increase of 55 crores in youth (below 35).
      • Economic Shift:
        • Economic expansion over a hundred times.
        • GDP growth from 10,000 crores to 100 lakh crores.
      • Shift in Private Sector:
        • Private sector operates globally.
        • Government's role evolves from command-and-control to directing, supporting, regulating.
      • Forces of Globalization:
        • World connected as a 'global village.'
        • Modern transport, communications, media, global economic integration.
      • Role of the States:
        • States evolved from appendages to drivers of national development.
        • One-size-fits-all approach in centralized planning no longer practical.
      • Technology Paradigm:
        • Technology advancements integrate regions, enhance transparency, efficiency.
        • Technology central to policy and governance systems.

    [Question: 960657]


    Change Must Come

    • Experts recognize the need for changes in economic institutions with evolving economic contours.

    • Institutions guiding the economy should adapt to changing trends.

    • Eighth Plan (1992-97) document emphasized the restructuring of the Planning Commission (PC) in line with the government's evolving role.

    • PC needed reform to align with economic reforms, shedding old practices irrelevant in the new context.

    • 15th Lok Sabha's Standing Committee on Finance urged the PC to reinvent itself and align the planning process with economic reforms.

    • Emphasis on making PC more relevant and effective, particularly for addressing the consequences of reforms for the poor.

    • Dr. Manmohan Singh, in his farewell address to the PC (April 2014), questioned the role and capacities the PC needed in the new world of economic changes.

    • Urged reflection on tools and approaches designed for a different era, considering additional roles for relevance to the growth process.

    • Government quotes Mahatma Gandhi, emphasizing the law of constant development and the need to evolve with changing dynamics.

    • Mention of avoiding false positions by maintaining outdated dogmas.

    • Institutions of governance and policy must evolve with the changing dynamics of the new India.

    • Emphasis on remaining rooted in the founding principles of the Constitution of India and Bharativata.

    • NITI Aayog seen as the institution to give life to the aspirations of evolving institutions.

    • Formation based on extensive consultation across stakeholders, including state governments, institutions, domain experts, and the public.

    [Question: 960657]


    Functions of the NITI Aayog

    • Cooperative and Competitive Federalism:

      1. Primary platform for operationalizing cooperative federalism.
      2. Enables active state participation in national policy formulation.
      3. Aims for time-bound quantitative and qualitative target achievement.
      4. Replaces one-way policy flow with a genuine Centre-State partnership.
      5. Enhances vibrancy through Competitive Federalism.
    • Shared National Agenda:

      1. Evolves a shared vision of national development priorities.
      2. Involves active participation of states in shaping the national agenda.
    • State’s Best Friend at the Centre:

      1. Supports states in addressing challenges and building on strengths.
      2. Coordinates with ministries, champions state ideas, and provides consultancy support.
    • Decentralized Planning:

      1. Restructures planning into a bottom-up model.
      2. Empowers states and guides them to empower local governments.
      3. Aims for credible village-level plans progressively aggregated to higher levels.
    • Vision and Scenario Planning:

      1. Designs medium- and long-term strategic frameworks.
      2. Develops a big-picture vision for India’s future, considering various scenarios.
      3. Constantly monitors progress, efficacy, and evolving trends.
    • Domain Strategies:

      1. Builds a repository of specialized domain expertise.
      2. Assists ministries in development planning and problem-solving.
      3. Incorporates good governance best practices nationally and internationally.
    • Sounding Board:

      1. Acts as an in-house sounding board for refining government positions.
      2. Provides objective criticisms and comprehensive counterviews.
    • Network of Expertise:

      1. Mainstreams ideas and expertise into government policies.
      2. Collaborates with national and international experts, academia, and the private sector.
      3. Links to the outside world for policy-making involvement.
    • Knowledge and Innovation Hub:

      1. Accumulates and disseminates research and best practices on good governance.
      2. Establishes a state-of-the-art Resource Centre for analysis, sharing, and replication.
    • Implementation Facilitation:

      1. Goes beyond planning and strategizing to facilitate implementation.
      2. Acts as a catalyst, filling gaps, enhancing capabilities, and addressing bottlenecks.
      3. Focuses on tangible outcomes, realistic targets, and strict timelines.
    • Harmonization:

      1. Facilitates harmonization of actions across different government layers.
      2. Promotes integrated and holistic approaches to development.
    • Conflict Resolution:

      1. Provides a platform for mutual resolution of intersectoral, inter-departmental, and inter-state issues.
      2. Aims for consensus beneficial to all, bringing clarity and speed in execution.
    • Coordinating Interface with the World:

      1. Acts as the nodal point for harnessing global expertise and resources.
      2. Engages with nations, multilateral institutions, and international organizations.
    • Internal Consultancy:

      1. Offers internal consultancy to Central and State governments.
      2. Provides policy and program design frameworks adhering to key principles.
    • Capacity Building:

      1. Enables capacity building and technology upgradation across governments.
      2. Benchmarks with global trends and provides managerial and technical know-how.
    • Monitoring and Evaluation:

      1. Monitors policy and program implementation.
      2. Evaluates impact through rigorous tracking and comprehensive evaluations.
      3. Enables data-driven policy making for greater efficiency and effectiveness.

    [Question: 960657]


    Guiding Principle

    • Inclusive Development:

      1. Guided by an overall vision of development that is inclusive, equitable, and sustainable.
      2. Strategy based on empowerment with a focus on human dignity and national self-respect.
      3. Aims for a holistic, all-round, and all-inclusive development model.
      4. Prioritizes service and upliftment of the poor, marginalized, and downtrodden.
    • Antyodaya (Service to the Last):

      1. Prioritizes service and upliftment of the poor, quoting Pandit Deendayal Upadhyay's idea of 'Antyodaya.'
      2. Emphasizes that development is incomplete if it does not reach the farthest individual.
      3. Quotes Tiruvalluvar: 'Nothing is more dreadfully painful than poverty.'
    • Inclusion:

      1. Aims to empower vulnerable and marginalized sections, addressing identity-based inequalities.
      2. Quotes Sankar Dev: 'To see every being as equivalent to one’s own soul is the supreme means.'
      3. Focus on enabling all sections to be masters of their own fate and have equal influence over national choices.
    • Village Integration:

      1. Aims to integrate villages into the development process.
      2. Draws on the vitality and energy of the cultural and sustenance bedrock of India.
    • Demographic Dividend:

      1. Aims to harness India's greatest asset, the people, through education, skilling, and productive livelihood opportunities.
    • People’s Participation:

      1. Aims to transform the developmental process into a people-driven one.
      2. Seeks an awakened and participative citizenry as the driver of good governance.
      3. Includes the participation of the non-resident Indian community spread across the world.
    • Governance:

      1. Aims to nurture an open, transparent, accountable, pro-active, and purposeful style of governance.
      2. Shifts focus from Input to Output to Outcome.
    • Sustainability:

      1. Maintains sustainability at the core of planning and development.
      2. Builds on the ancient tradition of respect for the environment.

    [Question: 960657]


    Structure of the NITI

    • Chairman: Prime Minister of India (de facto).

    • Governing Council: Comprises PM, Vice Chairman, CMs of states and UTs (with legislature), Lt Governors of other UTs, Ex Officio Members, Full-Time Members, and Special Invitees.

    • Regional Councils:

      1. Formed to address specific issues impacting more than one state or region.
      2. Anchors strategy and planning from state-level.
      3. Linked with domain experts, academic institutions, and includes dedicated support in Aayog's secretariat.
    • Special Invitees: Includes experts, specialists, and practitioners with relevant domain knowledge nominated by the Prime Minister.

    • Full-Time Organisational Framework:

      1. Comprises Vice-Chairperson, Full-Time and Part-Time Members, Ex Officio Members, Chief Executive Officer, and necessary secretariat personnel.
      2. Part-Time Members rotate from leading universities, research organizations, and relevant institutions.

    Specialised Wings in NITI Aayog

    • Research Wing: Develops in-house sectoral expertise with domain experts, specialists, and scholars.

    • Consultancy Wing:

      1. Provides a marketplace of expertise and funding for Central and state governments.
      2. Acts as a matchmaker, focusing NITI Aayog's resources on priority matters.
    • Team India Wing:

      1. Comprises representatives from every state and ministry.
      2. Serves as a permanent platform for national collaboration.
      3. Ensures continuous voice and stake for every state/ministry in the Aayog.
      4. Establishes a direct communication channel between the state/ministry and the Aayog.
    • National 'Hub-Spoke' Institutional Model:

      1. Develops a model where each state and ministry builds dedicated mirror institutions.
      2. Serves as an interface for interaction, nurturing networks of expertise at the state and ministry level.

    [Question: 960657]


    Vehicle of Good Governance

    • Role in Good Governance

      1. Aims to facilitate and empower good governance, emphasizing people-centric, participative, collaborative, transparent, and policy-driven governance.
      2. Provides critical directional and strategic input to the development process.
      3. Focuses on deliverables and outcomes while incubating and disseminating fresh thought and ideas.
    • Governance Principles

      1. Quotes Chanakya: 'Good governance is at the root of a nation’s wealth, comfort, and happiness.'
      2. Acknowledges improvements in Central government governance but highlights challenges at the state level.
      3. Recognizes the need for effective cooperation among governments.
    • NITI Aayog's Approach to Governance

      1. Embeds the aspect of good governance in the idea of NITI Aayog.
      2. Reflects the word 'governance' and clear mentions at several foundational, guiding, structural, and functional levels.
      3. Functions like cooperative and competitive federalism, best friend of states, decentralized planning, harmonization, conflict resolution, internal consultancy, capacity building, and M&E contribute to improving governance.
    • Vision of NITI Aayog

      1. The idea is sensitive to the need for good governance in the country.
      2. Government visualizes NITI Aayog as the 'vehicle of good governance.'

    [Question: 960657]


    Concluding Remarks

    • Innovative and Contemporary Approach:

      1. NITI Aayog's approach is innovative and contemporary, forging into the emerging idea of including 'happiness' in the policy-making framework.
      2. Calls for the inclusion of India's ethos and cultural elements in the development model.
    • Integration of Growth and Cultural Dimensions:

      1. Connects growth and development to the behavioral dimensions of the people of India.
      2. Aligns with the World Bank's proposal in the World Development Report 2015.
    • Shining Stars in NITI Aayog: Recognizes several shining stars in NITI Aayog, subject to analysis and discussion by analysts, experts, and scholars.

    • Transition from PC to NITI Aayog:

      1. Acknowledges the transition from the Planning Commission to NITI Aayog.
      2. Positions NITI Aayog as an entity that can combine and integrate the energy and potential of all citizens, open to the world.

    [Question: 960657]


    Major Documents of the NITI


    Three-Year Action Agenda 
    • Proposes reducing the fiscal deficit to 3% of GDP and the revenue deficit to 0.9% of GDP by 2019-20.
    • Aims to double farmers' incomes by 2022, emphasizing job creation in industry and services.
    • Recommends generous floor space index (FSI), flexible conversion rules, etc., for urban areas.
    • Encourages development outcomes in specific regions: North Eastern Region, Coastal Areas, Islands, North Himalayan states, Desert, and Drought-prone states, with an emphasis on connectivity.
    • Focuses on energy sector reforms, including consumer-friendly measures, reducing cross-subsidy in the power sector, and reforming the coal sector.
    • Emphasizes science and technology through developing Public-Private Partnerships (PPP), creating a National Science, Technology, and Innovation Foundation, and streamlining the patent regime.
    • Promotes governance with a reduced government role in undesirable areas, tackling tax evasion, expanding the tax base, simplifying the tax system, and strengthening public procurement.
    • Undertakes judicial system reforms using ICT and police reforms at the state level to promote the rule of law.
    • Shifts from input-based to outcome-based education with a ranking system.
    • Focuses on public health through a significant increase in government expenditure.
    • Aims at building an inclusive society.
    • Adopts sustainable practices, tackles city air pollution, and implements policies for protecting trees and ensuring sustainable use of water resources.

    [Question: 960657]


    Seven-Year Strategy Framework 

    1. Aims to make India a $3.0 trillion economy by 2022-23.
    2. Focuses on growth and employment, doubling farmers' incomes, upgrading the science, technology, and innovation ecosystem, and promoting sunrise sectors such as fintech and tourism.
    3. Addresses physical foundations of growth crucial for business competitiveness and ensures citizens' ease of living.
    4. Invests in the capabilities of all citizens with a focus on health, education, and mainstreaming traditionally marginalized sections.
    5. Streamlines governance structures and optimizes processes for better developmental outcomes.

    These documents represent NITI Aayog's comprehensive approach to developmental planning and strategy for the specified periods.
    [Question: 960657]

    Vision Document on Health

    • NITI Aayog released a sectoral 'vision document' in December 2020 titled "Vision 2035: Public Health Surveillance in India."

    • The document outlines four major visions for the next 15 years in the public health sector.

    • The first vision focuses on making the public health system more responsive and predictive to enhance preparedness for action at all levels.

    • The second vision emphasizes the development of a citizen-friendly public health surveillance system. This includes ensuring privacy and incorporating a client feedback mechanism.

    • The third vision aims to improve the data-sharing mechanism between the Centre and states, with health data considered as building blocks and the motto "Information for Action."

    • The fourth vision envisions providing regional and global leadership in managing events that constitute a public health emergency of international concern.

    • The document advocates for the integration of the three-tiered public health system into Ayushman Bharat and emphasizes the need for expanded referral networks and enhanced laboratory capacity.

    • Acknowledging the impact of the COVID-19 pandemic, the document sees it as an opportunity to revisit (re)emerging diseases due to increased interaction between human-animal-environment. Early identification of this interference is crucial to break the chain of transmissions and create a resilient surveillance system.

    • Overall, the Vision 2035 document is positioned as a step towards shaping the future of public health surveillance in India by addressing emerging challenges and ensuring a proactive and resilient system.

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FAQs on Ramesh Singh Summary: Planning in India- 3 - Famous Books for UPSC Exam (Summary & Tests)

1. What is the National Development Council?
Ans. The National Development Council (NDC) is a body established in India to facilitate communication and coordination between the central and state governments in matters of economic and social development. It is chaired by the Prime Minister and includes the Chief Ministers of all the states and Union Territories.
2. What is central planning?
Ans. Central planning refers to the process in which the government, usually at the central level, makes decisions and sets targets for various sectors of the economy. It involves the allocation of resources, setting production targets, and implementing policies to achieve economic and social objectives.
3. What is Niti Aayog?
Ans. Niti Aayog, or the National Institution for Transforming India, is a policy think tank established by the Government of India to replace the Planning Commission. It serves as a platform for formulating and implementing strategies for sustainable development, promoting cooperative federalism, and fostering innovation in various sectors of the economy.
4. What are the major documents of the NITI Aayog?
Ans. The major documents of the NITI Aayog include: - National Development Agenda: It outlines the key priorities and strategies for achieving sustainable development in India. - Three-Year Action Agenda: It provides a roadmap for policy and institutional reforms to achieve inclusive growth and development. - Fifteen-Year Vision Document: It envisions the long-term goals and aspirations for the country and sets targets for various sectors.
5. What is the role of planning in India?
Ans. Planning in India plays a crucial role in guiding and directing the country's economic and social development. It involves the formulation of policies, allocation of resources, setting targets, and monitoring progress towards achieving various development goals. Planning helps in addressing social and economic inequalities, promoting balanced regional development, and ensuring the efficient utilization of resources.
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