Planning Commission of India

Planning Commission of India
Name	Planning Commission
Native name	योजना आयोग
Formed	15 March 1950
Dissolved	15 August 2014
Superseding	NITI Aayog
Jurisdiction	Government of India
Headquarters	Yojana Bhavan, New Delhi
Chief1 name	Prime Minister of India (ex officio)
Chief1 position	Chairperson
Chief2 name	Deputy Chairman of the Planning Commission
Chief2 position	Deputy Chairperson
Chief3 name	Cabinet Secretary
Chief3 position	Member Secretary

Planning Commission of India was a non-constitutional and non-statutory body that served as the central planning institution for the Government of India. Established in 1950, it was charged with formulating the country's Five-Year Plans to promote a rapid rise in the standard of living through efficient exploitation of resources, increased production, and offering opportunities for all. The commission played a pivotal role in steering India's mixed economic model, heavily influencing public sector investment and the allocation of central resources to various states and union territories. Its functions were ultimately assumed by NITI Aayog in 2015 following its abolition.

History

The commission was established on 15 March 1950 by a Cabinet resolution, with then-Prime Minister Jawaharlal Nehru as its first chairperson. Its creation was inspired by the Gosplan of the Soviet Union and reflected the post-independence consensus for a planned economy to achieve self-reliance and rapid industrialization. Key early figures included statistician P. C. Mahalanobis, who shaped the Second Five-Year Plan, emphasizing heavy industries. Over the decades, its role evolved from a central command body during the License Raj to a more advisory one following the 1991 economic reforms under Prime Minister P. V. Narasimha Rao and Finance Minister Mammohan Singh.

Functions and responsibilities

The commission's primary function was to assess all resources of the country, augment deficient resources, and formulate plans for their most effective and balanced utilization. It was responsible for defining the stages of plan implementation and proposing the allocation of resources for the completion of each stage. It appraised the progress of each Five-Year Plan and recommended adjustments, acting as an advisory body to the Union Council of Ministers. It also played a crucial role in coordinating with the Ministry of Finance and various state governments through the National Development Council to ensure plan consistency.

Organizational structure

The commission was chaired by the Prime Minister of India, with a Deputy Chairman of the Planning Commission holding the rank of a Cabinet Minister and performing executive functions. Other members included full-time experts and part-time members, often central ministers. The Cabinet Secretary served as the ex-officio Member Secretary. It operated through numerous subject-specific divisions, such as those for agriculture, education, and infrastructure, each headed by a senior officer. The commission's secretariat, located at Yojana Bhavan in New Delhi, provided administrative and technical support.

Five-Year Plans

The commission formulated and oversaw twelve Five-Year Plans, directing national economic policy from 1951 to 2017. The First Five-Year Plan (1951-56) focused on agriculture, while the Second Plan (1956-61), modeled on the Mahalanobis model, prioritized industrialization. Subsequent plans addressed goals like poverty alleviation, employment generation, and self-sufficiency. The Eighth Plan (1992-97) marked a shift post-liberalization, emphasizing the private sector. The final plan, the Twelfth Five-Year Plan (2012-17), aimed for "faster, sustainable, and more inclusive growth."

Criticism and controversies

The commission faced sustained criticism for being a top-down, bureaucratic institution with excessive centralization of power in New Delhi. Critics argued it fostered a patronage-based relationship with states, leading to a "one-size-fits-all" approach that ignored regional disparities. Its poverty line definitions, notably during the tenure of Montek Singh Ahluwalia, were controversial for being unrealistically low. The body was also seen as a relic of the License Raj, out of sync with a market-oriented economy, and was accused of creating parallel authority structures that undermined the Union ministries and the Finance Commission.

Abolition and replacement

Prime Minister Narendra Modi, in his first Independence Day speech from the Red Fort on 15 August 2014, announced the commission's abolition, stating the need for a new institution to better address contemporary economic challenges. It was formally replaced by the NITI Aayog (National Institution for Transforming India) on 1 January 2015. Unlike its predecessor, NITI Aayog is designed as a think tank with a governance structure involving all state chief ministers, promoting cooperative federalism and a bottom-up approach to planning without the power to allocate financial resources.

Category:Government agencies established in 1950 Category:Government agencies disestablished in 2014 Category:Economic planning in India