Planning Commission (India)

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Planning Commission
Agency overview
Headquarters Yojana Bhawan, Sansad Marg, New Delhi - 110001
Agency executives Narendra Modi, ex officio chairman
Vacant after resignation of Montek Singh Ahluwalia, Deputy chairman
Planning commission has been scheduled to be dissolved and shutdown by new institution.[1]

The Planning Commission is an institution in the Government of India, which formulates India's Five-Year Plans, among other functions. It is located at Yojana Bhawan, Sansad Marg, New Delhi. It was established in accordance with article 39 of the constitution which is a part of directive principles of state policy.

In his first Independence Day speech in 2014, Prime Minister Narendra Modi announced scrapping of Planning Commission. [2]


Rudimentary economic planning, deriving the sovereign authority of the state, first initiated in India in 1938 by Netaji Subhash Chandra Bose when he was the Congress president and drafted by Meghnad Saha. The British Raj also formally established a planning board that functioned from 1944 to 1946. Industrialists and economists independently formulated at least three development plans in 1944.Some scholars have argued that the introduction of planning as an instrument was to transcend the ideological divisions between Gandhi and Nehru[3] Some other scholars have argued that Planning Commission as a central agency in the context of plural democracy in India needs to carry out more functions than rudimentary economic planning.[4]

After India gained independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India was established on 15th March 1950, with prime minister Jawaharlal Nehru as the chairman. The Planning Commission does not derive its creation from either the Constitution or statute, but is an arm of the Central/Union Government.

The first Five-year Plan was launched in 1951 which mainly focused in development of agricultural sector and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan Conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year plan was started in 1969.

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre and the years 1990–91 and 1991–92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.

For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.

In 2014, the Central Government led by Prime Minister Narendra Modi has decided to wind down the Planning Commission and replace it with a more dynamic organisation that is more connected to the times and populistic. There have been various perspectives discussed across the spectrum of the erudite Indian intelligentsia about this move and what should replace the Planning Commission.The decision is mainly viewed of extreme hatredness of Modi against Nehru.Currently, Prime Minister Modi has launched a discussion board on Twitter to get opinions from the people of the country on what should replace the Planning Commission.


The composition of the Commission has undergone a lot of change since its inception. With the prime minister as the ex officio Chairman, the committee has a nominated Deputy chairman, who is given the rank of a full Cabinet Minister. Presently the post of Deputy Chairman of the Commission is vacant, after the new Government in the Center.

Cabinet Ministers with certain important portfolios act as ex officio members of the Commission, while the full-time members are experts of various fields like Economics, Industry, Science and General Administration.

Present ex officio members of the Commission, are Finance Minister, Agriculture Minister, Home Minister, Health Minister, Chemicals and Fertilisers Minister, Information Technology Minister, Law Minister, HRD Minister and Minister of State for Planning.[5]

The Commission works through its various divisions, of which there are two kind:

  • General Planning Divisions
  • Programme Administration Divisions

The majority of experts in the Commission are economists, making the Commission the biggest employer of the Indian Economic Services.


The Planning Commission's functions as outlined by the Government's 1950 resolution are following:

  1. To make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting those are related resources which are found to be deficient in relation to the nation's requirement.
  2. To formulate a plan for the most effective and balanced utilisation of country's resources.
  3. To define the stages, on the basis of priority, in which the plan should be carried out and propose the allocation of resources for the due completion of each stage.
  4. To indicate the factors that tend to retard economic development.
  5. To determine the conditions which need to be established for the successful execution of the plan within the incumbent socio-political situation of the country.
  6. To determine the nature of the machinery required for securing the successful implementation of each stage of the plan in all its aspects.
  7. To appraise from time to time the progress achieved in the execution of each stage of the plan and also recommend the adjustments of policy and measures which are deemed important vis-a-vis a successful implementation of the plan.
  8. To make necessary recommendations from time to time regarding those things which are deemed necessary for facilitating the execution of these functions. Such recommendations can be related to the prevailing economic conditions, current policies, measures or development programmes. They can even be given out in response to some specific problems referred to the commission by the central or the state governments.

From a highly centralised planning system, the Indian economy is gradually moving towards indicative planning where the Planning Commission concerns itself with the building of a long-term strategic vision of the future and decide on priorities of nation. It works out sectoral targets and provides promotional stimulus to the economy to grow in the desired direction. It also plays an integrative role in the development of a holistic approach to the policy formulation in critical areas of human and economic development. In the social sector, schemes that require co-ordination and synthesis like rural health, drinking water, rural energy needs, literacy and environment protection have yet to be subjected to coordinated policy formulation. It has led to multiplicity of agencies. The commission has now been trying to formulate an integrated approach to deal with this issue. The Planning Commission has asked the States to hike the power tariff to save the ailing power sector. It also called upon the States to utilise the power subsidy for improvement to essential services like drinking water supply, education and health for promoting inclusive growth.[6]

Social media[edit]

In March 2013, Planning Commission launched a massive social media campaign for spreading Awareness about 12th Five Year Plan. It was followed by series of Google+ Hangouts and a Plan Hackathon. By September 2013, it had made a considerable presence on Social Media with over 1 lakh Twitter followers and a considerable size on Facebook, YouTube and SlideShare.[7]


The Planning Commission has faced criticism for spending INR35 lakh (US$57,000) to renovate two blocks of toilets,[8][9] while declaring a very low, and arguably unrealistic, threshold of poverty of a monthly consumption of INR859.6 (US$14) in urban and INR672.8 (US$11) in rural areas.[10][11]

See also[edit]


  1. ^ Planning Commission shut down
  2. ^ "PM Narendra Modi announces scrapping of Planning Commission". Business Standard. ANI. August 15, 2014. Retrieved August 15, 2014. 
  3. ^ Partha Chatterjee, 2001 "Development planning and the Indian state" in State and Politics in India (ed. Partha Chatterjee) New Delhi: Oxford University Press
  4. ^ Sony Pellissery, 2010 Central agency in plural democracy. The India Economy Review, 7 (3), 12–16
  5. ^ "Indian Express". 
  6. ^ "Plan panel asks states to hike power tariffs". The Times of India. 18 July 2012. Retrieved 29 December 2012. 
  7. ^ "Planning Commission of India gets over 1 Lakh followers on Twitter". Retrieved 22 September 2013. 
  8. ^ "Rs. 35 lakh spending: 50-yr-old toilets needed repair, says Montek Singh Ahluwalia". NDTV. 2012. Retrieved 7 June 2012. 
  9. ^ "Rs 35 lakh toilet renovation routine maintenance: Plan Panel". Indiatimes. 2012. Retrieved 7 June 2012. 
  10. ^ "Planning Commission further lowers poverty line to Rs. 28 per day". NDTV. 2012. Retrieved 19 March 2012. 
  11. ^ "India's poverty line now lowered to Rs 28 per day". CNN-IBN. 2012. Retrieved 19 March 2012. 

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