Introduction

It was the Soviet Union which explored and adopted national planning for the first time in the world. After a prolonged period of debate and discussion, the First Soviet Plan commenced in 1928 for a period of five years. But the world outside was not fully known to the modus operandi
of development planning till the 1930s. It was the exodus 1 of the east European economists to Britain and the United States in the 1920s and 1930s that made the world aware as to what economic/ national planning was all about. The whole lot of
colonial world and the democracies of the time were fascinated by the idea of planning as an instrument of economic progress. The nationalist leaders with socialistic inclination of the erstwhile British colonies were more influenced by the idea of economic planning. The whole decade of the 1930s is the period in the Indian history when we see nationalists, capitalists, socialists, democrats and academicians advocating for the need of economic planning in India at one point or another. 2
Independent India was thus destined to be a planned economy. The economic history of India is nothing but the history of planning. 3 Even if the so-called economic reforms started in 1991-92, all the humble suggestions regarding the contours of reforms were very much outlined by the Planning Commission by then.4 Once the reforms commenced, the think tank started outlining the major future direction for further plans. 5 Going through the history of planning in India is a highly educational trip in itself-for though the Planning Commission has been a political body, it never hesitated in pointing out good economics time and again. Let us therefore look into the unfolding of the planning process in India

The Visvesvaraya Plan

M. Visvesvaraya, popular civil engineer & ex-Dewan of Mysore (his birthday 15th September is celebrated Engineers day in India) proposed first blue print of Planning in India in his book “The Planned Economy of India” published in 1934(The first systematic attempt of economic planning in India was made in the year asked in APSC, GS prelims 2013). Ideas:Democratic capitalism(USA model) with emphasis on industrialization – shift of labour from agrarian to industries thereby doubling national income in a decade. No followup by British led to urge of national planning amongst educated mass

The FICCI Proposal

1934 National planning proposed by FICCI. Its president N.R. Sarkar call for a high powered: National Planning Commission

The Congress Plan

Under the initiative of the INC president Netaji SC Bose -> “National Planning Committee” was set up in October 1938 under the chairmanship of J.L. Nehru to work out concrete programmes for development encompassing all major areas of the economy. NPC was set up in a conference of Minister of Industries of the Congress ruled states(other stats also invited) , M. Visvesvaraya, J. R. D Tata, G. D. Birla and Lala Sri Ram etc were present which ultimately produced 29 volumes of recommendations. 1940-45 2nd World war, Quit India Movement: many members including chairman were arrested. Final report of NPC published in 1949

Post War Reconstruction committee: Early in June 1941, the GoI formed PWRC to consider various plans for reconstruction of economy

Consultative Committee of Economist: under the chairmanship of Ramaswamy Muralidhar setup in 1941

Planning and Development Department: set up in 1944 under a separate member of the Viceroy’s Executive Council for organising and co-ordinating it. Ardeshir Dalal was appointed as one of its acting member.Dept abolished in 1946.

Advisory Planning Board: October 1946 GoI appointed the committee to review the planning that had already been done by the British Government

The Bombay Plan

Bombay Plan was the popular title of ” A Plan of Economic Development for India” . 8 capitalists were : Tata, Birla, Lala Sri Ram, Purshotm Thakur Das, Kasturbhai Lal Bhai, AD Shroff, Avdeshir Dalal & John mathai. Plan published in 1944-45. NPC and Bombay Plan had some common agreement due to common members of this two. Agrarian Restructuring(Abolition of Zamindari), Rapid Industrialisation,development of essential and consumer goods, medium small and Cottage industries, Active role of state, Social welfare, inequalities

The Gandhian Plan

formulated by Sriman Narayan Agarwal, 1944. More emphasis to agriculture, promoting industries like cottage and village instead of heavy industries as proposed by NPC and Bombay Plan

The People's Plan

In 1945 by radical humanist leader M.N. Roy, Chairman of Post War Reconstruction committee of Indian Trade Union. Plan based on Marxist socialism–providing people with basic necessities of life. Agri and Industry equally highlighted. Followed by Common Minimum Program of United Front and that of the Mid 90’s and that of UPA 2004 inspired~~ “Economic Reform with the human face”

The Sarvodaya Plan

Socialist leader Jaiprakash Narayan published in 1950. Majority form Gandhian techniques of constructive work as well as Sarvodaya concept of Acharya Vinoba Bave. Decentralised partcipatory form of planning , agriculture, small &cottage industries, self reliance(all Gandhi wala concept)

Some Area-wise Reports

The idea for the need of a planned development of India became more and more popular by the decade of the 1940s. It was under this popular pressure that the Government of India started taking some planned actions in this direction. In the 1940s, we see several area-specific reports being published:
(i) Gadgil Report on Rural Credit
(ii) Kheragat Report on Agricultural Development
(iii) Krishnamachari Report on Agricultural Prices
(iv) Saraiya Report on Cooperatives
(v) A series of reports on Irrigation (ground water, canal, etc.)

There is no doubt in drawing the conclusion that prior to Independence, there was thus a significant measure of agreement in India between the Government of India under the Secretary of State, the Indian National Congress, prominent industrialists and the others on the following principles

(i) There should be central planning, in which the state should play an active part, for social and economic development to bring about a rapid rise in the standards of living;
(ii) There should be controls and licencing in order, among other things, to direct investments into the desired channels and ensure equitable distribution;
(iii) While there should be balanced development in all sectors ofthe economy, the establishment of basic industries was specially important. In this, state-owned and state-managed enterprises have an important role. There were, however, differences of approach with regard to the specific fields to be allocated to the public and private sectors.

6 Major Objectives of Planning in India

(a) Economic Growth,
(b) Attaining Economic Equality and Social Justice,
(c) Achieving Full Employment,
(d) Attaining Economic Self-Reliance,
(e) Modernisation of Various Sectors, and
(f) Redressing Imbalances in the Economy.

(a) Economic Growth

Attainment of higher rate of economic growth received topmost priority in almost all the Five Year Plans of the country. As the economy of the country was suffering from acute poverty thus by attaining a higher rate of economic growth eradication of poverty is possible and the standard of living of our people can be improved.

The First Plan envisaged a target of 11 per cent increase in national income against which 18 per cent growth in national income was achieved. The Second, Third and Fourth Plan envisaged targets for annual growth rate of 5 per cent. 5.6 per cent and 5.7 per cent respectively against which the achievements were 4 per cent, 2.6 per cent and 3.4 per cent respectively.

Again the Fifth and Sixth Plan also proposed the annual growth rate of 4.37 per cent and 5.2 per cent against which the achievements were 5.0 per cent and 5.2 per cent respectively. The Seventh Plan also set the target of 5 per cent in respect of annual growth rate of national income.

The Eighth Plan and the Ninth Plan set the target of 5.6 per cent and 7.0 per cent annual growth rate of national income against which the achievements were 6.5 per cent and 5.4 per cent respectively. The Tenth and Eleventh Plan set the target of 8.0 per cent and 9.0 per cent in its annual average growth rate of GDP. Thus attaining higher rate of economic growth is found as a common objective for all the Five Year Plans of our country.

(b) Attaining Economic Equality and Social Justice

Reduction of economic inequalities and eradication of poverty are the second group of objective of almost all the Five Year Plans of our country particularly since the Fourth Plan. Due to the faulty approach followed in the initial part of our planning, economic inequality widened and poverty became acute.

Under such a situation, the Fifth Plan adopted the slogan of ‘Garibi Hatao’ for the first time. The Seventh Plan document shows that nearly 37.4 per cent of the total population of our country was lying below the poverty line and the plan aimed to reduce this percentage of 29.2 per cent by 1990.

Thus to achieve the target, various poverty alleviation programmes like the National Rural Employment Programme (NREP), Composite Rural Training and Technology Centre (CRTTC), Crash Scheme for Rural Employment Programme (CSREP), Rural Landless Employment Guarantee Programme (RLEGP) etc. were introduced. But the performance of these programmes is not up to the satisfaction.

(c) Achieving Full Employment

Five Year Plans of India gave importance on the subject to employment generation since the Third Plan. The generation of more employment opportunities was considered as an objective of both the Third and Fourth Plan of our country. But up to the Fourth Plan employment generation never received its due priority.

The Fifth Plan in its employment policy laid special emphasis in absorbing increments in labour force during this Fifth Plan Period. The Sixth Plan accorded much importance on the reduction of incidence on unemployment. It has been estimated that the employment will grow at the rate of 4.17 per cent per annum as against the annual growth of labour force at 2.54 per cent.

To achieve this target the major programmes which were introduced during this Plan were Integrated Rural Development Programme (IRDP), the National Rural Employment Programme (NREP), the Operation Flood II Dairy Development Project, schemes in the villages and small industries sector the national Scheme of Training Rural Youth for Self Employment (TRYSEM) and various other components of the Minimum Needs Programme.

One of the major objectives of the Seventh Plan was a faster growth of employment opportunities. Thus the plan aimed that the employment potential would grow at 4 per cent as against the 2.6 per cent growth in the labour force. Again, the Eighth Plan envisages an annual employment growth of 2.6 to 2.8 per cent over the next ten years 1992-2002.

(d) Attaining Economic Self-Reliance

One of the very important objectives of Indian Planning is to attain economic self-reliance. But this objective attained its importance only since the Fourth Plan, when the plan aimed at elimination of the import of food-grains under PL480. The Fifth Plan also laid much importance on the attainment of self-reliance.

Thus this plan aimed at achieving self-sufficiency in the production of food-grains, raw materials and other essential consumption goods. The Fifth Plan also emphasized the need for import substitution and export promotion for attaining economic self- reliance.

The Sixth Plan also put importance on strengthening the impulses of modernisation for the achievement of economic and technological self-reliance. The Seventh Plan and Eighth Plan also followed the path for achieving self-reliance.

Although India achieved self-sufficiency in respect of food-grains but it has not yet achieved self- sufficiency in respect of edible oil. In the mean time we have developed number of import substitute industries particularly basic and capital goods industries but huge import of petroleum oil along with some other items are creating a serious drain on our foreign exchange reserves leading to a depletion of foreign exchange reserves to such an extent in 1991-92 that the country has reached at the near- bankruptcy level with a huge external debt obligation, Thus the objective of self-reliance still remains unfulfilled.

(e) Modernisation of Various Sectors

Another very important objective of Five Year Plans of our country was the modernisation of various sectors and more specifically the modernisation of agricultural and industrial sectors. The Fourth Plan laid much emphasis on the modernisation of agricultural sector and undertook a vigorous scheme for modernisation of agriculture in the name of Green Revolution. The successive plans also continued their efforts in the same direction but at a reduced rate.

The Sixth Plan categorically mentioned this objective of modernisation for the first time. Here the objective of modernisation means those structural and institutional changes in economic activities which can transform a feudal and colonial economy into a progressive and modern economy. Thus through modernisation economy may be diversified.

It requires setting up of various types of industries and advancement of technology. In the mean time some sort of modernisation always gone against employment generation thus the country is facing a conflict between the objective of modernisation and the objective of removal of unemployment and poverty

(f) Redressing Imbalances in the Economy

Regional disparities and imbalances in the economy have become so acute in India that it needed special attention in our Five Year Plans. Thus by regional development we mean economic development of all the regions by exploiting various natural and human resources and by increasing their per capita income and living standards.

Since the Second Plan onwards, the Government realized the need for balanced development. Thus the Second, Third, Fourth and Fifth Plans laid emphasis on the redressal of economic imbalances for attaining a balanced regional development.

The Sixth Plan again aimed at progressive reduction in regional inequalities in the pace of development and in the diffusion of technological benefits. The Seventh Plan and Eighth Plan also carried this objective of balanced development in systematic manner. Besides then long term objectives, our plans also laid importance on short term objectives like control of inflation, industrialization, rehabilitation of refugees, building up infrastructural facilities etc.