Economic Planning in

India
 Emergence of Planning in India

• The need for planned, coordinated economic development under government

guidance was recognized all along the freedom movement.
• In December 1938, Subhash Chandra Bose, as the Congress president appointed
a National Planning Committee with Jawaharlal Nehru as its Chairman.
• The Planning Commission of India was setup in March 1950. Its task was to
make an assessment of the material, capital and the most effective utilization of
these resources on a priority basis.
 Introduction
• Economic Planning is to make decision with respect to the use of
resources.
• Economic Planning is a term used to describe the long term plans of
government to co-ordinate and develop the economy.
• Economic planning in India was stared in 1950 is necessary for economic
development and economic growth.
 Objectives of Planning in India 
• Economic planning plays a very important role in economic development.
• The fundamental objective of the economic planning in India is "growth with social justice".
• Some of the major objectives are:-
 Attainment of higher rate of economic growth.
 Reduction of economic inequalities
 Achieving full employment
 Modernization of various sectors
 Redressing imbalances in the economy
 Attaining economic self-reliance
 1 Higher rate of economic growth
• Increase in national income as well as per capita income, is the first and
foremost aim of Indian planning.
• A higher rate of economic growth would
 Help eradicate poverty
 Improve the standard of living of the people
• Attainment of higher rate of economic growth has received topmost
priority in almost all the Five-year plans of the country.
 2. Raising Investment Income Ratio 
• Achieving a planned rate of investment within a given period to bring the
actual investment as proportion of national income to a higher level has
been regarded significant due to two reasons:
 Firstly, such an increase in output capacity is deemed to be needed to
increase the output.
 Secondly it is needed to bring the capital stock of the economy to ensure
the growth of future output capacity.
 3. Social Justice
• Another major objective of Indian Five Year Plans is to provide social
justice to the common folks and weaker sections of the society.
• This social justice implies:
 reducing the income inequalities, and
 removal of poverty
• These two aspects have been well dealt in various drafts of five year plans
in our country.
 4. Removal of Poverty
• Up to the end of the Fourth Five Year Plan, it was felt that the benefits of development
have received a raw deal to tackle the problem of poverty.
• In the Fifth Plan, there was a visible shift in the approach which resulted in the Minimum
Needs Programme. Earlier to it, there was 20 Point Economic Programme to uplift village
community.
• The Sixth Plan (1980-85) document mentioned that the incidence of poverty in the
country is still very high and necessary measures need to be adopted to combat poverty.
• • Similarly, seventh, Eighth and Ninth Plan Stressed for the removal of poverty in the
country.
 5.Full Employment
• Unemployment problem is a chronic problem in undeveloped countries.
Though, India has emerged as a new developing country, yet it is in the grip
of acute problem of disguised unemployment.
Thus, the crucial objective of Indian Planning is
 the creation of conditions for attaining full employment, and
 the elimination of unemployment, under-employment and disguised
unemployment.
 6. Alleviating Three Main Bottlenecks
• Another objective of planning is the adoption of various measures to alleviate the
three 'bottlenecks' :
 agricultural production,
 the manufacturing capacity for producer goods, and
 the balance of payments.
The various plans have in one way or other been concerned with the removal of
these three principal barriers for achieving stability-both internal and external-in
the economy.
 7.Attainment of Self-Reliance 
• Another objective of Indian Plans is self-reliance. The earlier two plans could not give
emphasis to it because they were formulated for rehabilitating and establishing basic
key industries in the country.
• Thus in the Third Five Year Plan, for the first time, the idea of self-reliance was
clearly mentioned, " dependence on foreign aid, will be greatly reduced in the course
of the Fourth Plan.
• • It was planned to do away with confessional imports of food grains under PL-480.
• Foreign aid, net of debt charges and interest-payments will be reduced to about half
by the end of the Fourth Plan compared to the current level".
 8. Modernization of Various sectors
• For the First time, the idea of modernization was floated in the Sixth Five
Year Plan. In a common sense, it implies up-to dating the technology.
• Modernization here meant a change in the structural and institutional set
up of an economic activity, which could transform a feudal and colonial
economy into a progressive and forward looking economy.
• It specifically focusses on industrial sector and agricultural sector.
 9.Redressing imbalances in the economy
• From the 2nd plan onwards, the government realized the need for balanced
development.
• • Thus the 2nd 3rd 4th & 5th laid emphasis on redressal of economic imbalances for
attaining balanced regional development.
• • Regional development means economic development of all the regions by:
• v/ exploiting various natural and human resource
• v/ increasing their per capita income, and
• v/ increasing living standards.
 10.Attaining economic equality
• Reduction of economic inequalities have been the objective of almost all
the Five-year plans of our country.
• With its objective of growth scenario, expansion of employment
opportunity and poverty alleviation ,the 8th plan focussed entirely on
socio-economic condition.
• The 9th Five-year plan endeavoured to be sensitive to the needs of the
poor and focussed on growth to realize the objective of removal of
poverty.