PLANNING COMMISSION

OF INDIA

BY

MANISH BANSAL

RAJJAK KATHAT

WHAT IS PLANNING COMMISSION ?

o The Planning Commission is an institution in the

Government of India, which formulates India's Five-Year Plans,

among other functions.

o The Planning Commission was set up by 

a Resolution of the Government of India in March 1950 in

pursuance of declared objectives of the Government to promote a

rapid rise in the standard of living of the people by efficient

exploitation of the resources of the country, increasing production

and offering opportunities to all for employment in the service of

the community.

FUNCTIONS OF PLANNING COMMISSION

The Planning Commission's functions as outlined by the

Government's 1950 resolution are following:

To formulate a plan for the most effective and balanced

utilization of country's resources.

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.

To indicate the factors that tend to retard economic development.

FUNCTIONS OF PLANNING COMMISSION

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.

To determine the nature of the machinery required for securing the successful

implementation of each stage of the plan in all its aspects.

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 for successful implementation of the plan.

FUNCTIONS OF PLANNING COMMISSION

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 programs. They can even be given

out in response to some specific problems referred to the commission by the

central or the state governments.

Agricultural

Communication Information and Information Technology Division

Educational

Employment

Environment & Forests

Health

Industry

Minerals

Infrastructure

SECTORS OF PLANNING COMMISSION

SECTORS OF PLANNING COMMISSION

Power and Energy

Rural Development

Science & Technology

Social Justice

Urban Affairs

Women Empowerment

Water Resources

AGRICULTURAL Agricultural Research and Education

Agricultural Extension and Administration

To formulate plans for the development of sub-sectors of Agriculture

Dairying and Milk Supply

Fisheries

Agricultural Marketing, Storage and Warehousing

Telecommunication

Postal sector : Department of post

Information Technology

Information Broadcasting

COMUNICATION & INFORMATION TECHNOLOGY

Educational Program

Girls Education

Art & Culture

Youth Affairs & sports

EDUCATION DIVISION

Analytical and Estimation Work

Employment Strategy, Labour and Manpower Policy

Plan schemes for Labour and Labour Welfare and Special

Employment

Labour Policy

Institute of Applied Manpower Research (IAMR)

EMPLOYMENT

ENVIRONMENT & FOREST DIVISION

Environment

Forest

Wildlife

Climate change

Disaster management

Industrial Policy

Analyze Industrial statistics

Public Sector

Private Sector

Taxes & Subsidies

INDUSTRIAL

TransportRailways

Road Transport

Shipping

Ports

Inland Water Transport

Construction

INFRASTRUCTURE

Department of Atomic Energy (DAE)- R and D Sector

Department of Space (DOS)

Department of Science and Technology (DST)

Department of Biotechnology (DBT)

Department of Scientific and Industrial Research (DSIR) including

the Council of Scientific and Industrial Research (CSIR)

Ministry of Earth Sciences (MoES)

SCIENCE & TECHNOLOGY

Major and Medium Irrigation

Minor Irrigation

Flood Control

Command Area Development and Water Management (CADWM)

  Water Supply and Sanitation

WATER RESOURCES

Social Welfare

Women & Child Development

SOCIAL EMPOWERMENT

The Rural Development Division looks after the following

programmes being implemented by the Ministry of Rural

Development (MoRD):

National Rural Employment Guarantee Act (NREGA)

Swarnjayanti Gram Swarozgar Yojana (SGSY)

Indira Awaas Yojana (IAY)

National Social Assistance Programme (NSAP)

Integrated Watershed Management Programme (IWMP)

RURAL DEVELOPMENT

1ST FIVE YEAR PLAN(1951-56) Total budget: 206.8 billion (INR) or USD$23.6 billion.

Target growth: 2.1% (yearly) growth in gross domestic product.

Areas covered: India's five year plans, the 1st plan dealt with seven categories.

They included:

Agriculture as well as community development

Energy as well as Irrigation

Communications and transport

Land rehabilitation Social services

Miscellaneous Industrial sector

FIVE YEAR PLAN OF INDIA

2nd Five year plan(1956-61)Dealt with hydroelectric projects, steel mills, production of coal, addition of railway tracks and other aspects. The 2nd five year plan abided by Mahalanobis model.

3rd five year plan(1961-66)Many primary schools were started in rural areas. In an effort to bring democracy to the grass-root level, Panchayat elections were started and the states were given more development responsibilities.

4th five year plan(1969-74)Commencement of panchayat elections. The target growth rate was 5.6%, but the actual growth rate was 3.3% The Indira Gandhi government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture.

5th five year plan(1974-79)The Fifth Five-Year Plan laid stress on employment, poverty alleviation (Garibi Hatao), and justice. The plan also focused on self-reliance in agricultural production and defence.

6th five year plan(1980-85):The Sixth Five-Year Plan marked the beginning of economic liberalisation. Price controls were eliminated and ration shops were closed. This led to an increase in food prices and an increase in the cost of living. Family planning was also expanded in order to prevent overpopulation.

FIVE YEAR PLAN OF INDIA

7th five year plan(1985-90)The main objectives of the Seventh Five-Year Plan were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment. The major areas of the Seventh Five-Year Plan were: social justice, removal of oppression of the weak, using modern technology, agricultural development, anti-poverty programmes, full supply of food, clothing, and shelter, increasing productivity of small- and large-scale farmers, and making India an independent economy. The target growth rate was 5.0% and the actual growth rate was 6.01%

8th five year plan(1992-97)Modernization of industries was a major highlight of the Eighth Plan. Under this plan, the gradual opening of the Indian economy was undertaken to correct  deficit and foreign debt. The major objectives included, controlling population growth, poverty reduction, employment generation, strengthening the infrastructure, institutional building, tourism management, human resource development, involvement of Panchayati rajs, Nagar Palikas, NGOs, decentralisation and people's participation. An average annual growth rate of 6.78% against the target 5.6%was achieved.

9th five year plan(1997-2002)The Ninth Five-Year Plan had a total public sector plan outlay of ₨ 8,59,200 crores. The Ninth Five-Year Plan also saw a hike of 48% in terms of plan expenditure and 33% in terms of the plan outlay in comparison to that of the Eighth Five-Year Plan. In the total outlay, the share of the centre was approximately 57% while it was 43% for the states and the union territories. The target growth was 7.1% and the actual growth was 6.8%.

FIVE YEAR PLAN OF INDIA

Attain 8% GDP growth per year.

Reduction of poverty rate by 5% by 2007.

Providing gainful and high-quality employment at least to the addition to the labour force.

Reduction in gender gaps in literacy and wage rates by at least 50% by 2007.

20-point program was introduced.

Target growth: 8.1% - growth achieved: 7.7%

Expenditure of ₨ 43,825 crores for tenth five years

10th Five Year Plan(2002-2007)

Rapid and inclusive growth.(Poverty reduction)

Emphasis on social sector and delivery of service therein.

Empowerment through education and skill development.

Reduction of gender inequality.

Environmental sustainability.

To increase the growth rate in agriculture, industry and services to 4%,10% and 9% respectively.

Reduce Total Fertility Rate to 2.1

Provide clean drinking water for all by 2009.

8% growth rate compared to targeted 9%.

11th Five Year Plan(2007-2012)

12th Five Year Plan(2012-2017)

Average GDP Growth of 8 percent

Agriculture Growth of 4 percent

Reducing head-count poverty by 10 percentage point

Generating 50 million work opportunities

Eliminating gender and social gap in education

Reducing IMR to 25, MMR to 100 and TFR to 2.1

Enhance infrastructure investment to 9% of GDP

Achieve universal road connectivity and access to power for all villages

Access to banking services for 90 percent households

Major welfare benefits and subsidies via Aadhaar

Strategy for Achieving Inclusiveness

There are two routes to inclusiveness

through higher growth which expands income and employment opportunities

through government pro-poor programmes which target poorer groups

Both are important. Twelfth Plan combines the pro-poor programme approach with efforts to

get a growth pattern which is faster and inherently more inclusive

Two routes are mutually reinforcing

High growth generates more revenues, to finance inclusiveness programmes

Many inclusiveness programmes (health and education) contribute to growth

12th Five Year Plan

Macro-Economic Challenges in Achieving High Growth• Must increase the rate of investment, especially in infrastructure• Domestic savings must increase even more to reduce the investment saving gap

which is necessary to keep the Current Account Deficit under control• Government dis-savings must be eliminated. This means fiscal deficit must be

reduced • Growth of subsidies has to be contained• 75% of the investment in the economy is private investment (household plus

corporate)• Both the Centre and the States have to create an eco-system that encourages private

investment • Infrastructure, especially quality of power, and availability of skills is critical

12th Five Year Plan

Effectiveness of Plan Programmes• Twelfth Plan sets ambitious targets for Flagship Programmes in areas of Health,

Education, Rural infrastructure, Livelihood Development etc.

• Too much focus on the level of expenditure in these programmes. Not enough on effectiveness in terms of end results

• Implementation in the field is the responsibility of State Government agencies. However, programme guidelines are set by the Central Government

• There are demands for greater flexibility from states. We are responding as follows :

Guidelines are being made more flexible to meet the requirements of individual States

10% flexi-fund within each scheme for innovations

12th Five Year Plan

Energy• 8 percent GDP growth requires 6 percent growth in energy supply from all

sources• Our fossil fuel resources are limited, and our import dependence is already

high• Enhanced Energy Efficiency in all sectors • We need to push for renewable Energy: Wind, Solar and Storage Hydro• Difficult Policy Issues:

Coal vs. Forest Cover Petroleum Price Distortions Natural Gas Exploration Framework All Energy Prices: Coal, Petroleum product, Natural Gas and Electric

power are currently under priced. Fuel adjustment is needed

Water• Management of water resource is a major challenge. Estimates of water

availability have been optimistic• Twelfth Plan proposes modified AIBP and expanded Watershed

Management Programme• Water sector needs better Regulatory Framework

New Groundwater Law Water Regulatory Authorities in each state National Water Framework Law

• Agriculture accounts for 80% of water use at present, must shift to more water efficient agriculture practices

• Manage urban and industrial water demand through water recycling and rationalise user charges

Alternative Scenarios• 12th Plan goal of 8% inclusive growth is not a foregone conclusion

• Depends on difficult policy decisions to be taken by Centre and States

• For the first time Plan presents three scenarios

Strong Inclusive Growth 8%

Insufficient Action 6 to 6.5%

Policy logjam 5 to 5.5%

• Anything much less than 8% will not satisfy aspirations of the people

PM Narendra Modi Announced to scrap Planning Commission

Prime Minister Narendra Modi announced that the government would replace the Planning Commission with a new body, bringing the curtains down on the 64-year old institution founded on the former Soviet Union's command-style development model.

“We will replace the Planning Commission with a new institution having a new design and structure, a new body, a new soul, a new thinking, a new direction,” Modi said in his first Independence Day speech as the country’s Prime Minister.

Modi said the new, yet undefined institution, will forge a “new direction to lead the country based on creative thinking, public-private partnership, optimum utilisation of resources, utilisation of youth power of the nation, to promote the aspirations of state governments seeking development, to empower the state governments and to empower the federal structure”.

REASON OF SCRAPING PLANNING COMMISSION

The primary aim of Planning Commission(PC) was to allocate scarce resources of the country to various sectors of the economy. This was done to bring about orderly development. It was a need in the times of Nehru's Soviet styled planned socialism. Free market itself is considered as an efficient resource allocator. PC's importance is thus reduced.

Plan expenditure is money spent by Centre and States on plans. All other expenditures constitute unplanned expenditure(this includes the often derided subsidy bill). During fiscal year 2012-13, non plan was 65% of total expenditure. Thus, a major part of government resources are spent unplanned these days. About 80,000 crores of plan expenditure was not spent in FY 2013.

Plan targets set by PC are often not met on time. Example, eleventh five year plan envisaged to provide clean drinking water to all by 2009. By the end of 2008, 17% of Indians still lacked access to clean drinking water.

PC suggested that anyone spending more than Rs 32 in urban areas and Rs 26 in rural parts in a day is not poor. No justification is required to prove how foolish is this. This shows how much PC is untouched by the reality.

The growth of coalition governments and regional parties in the last 20 years has decentralised the political structure and therefore there is now need for more devolution of planning to state and local levels. States need greater flexibility to address their varied developmental challenges.

Times have changed since inception of PC in 1951. Private sector now plays an important role in development of the country. And given that Modi believes in the concept of "minimum government and maximum governance". It makes more sense to do away with an organisation which is increasingly seen as adding to red tape. Recent battle between NHAI and PC is an example.

When Modi was the CM of Gujarat, he was vocal to raise issue of PC being impartial while granting plan funds to States. He also hated PCs "one size fits all" policy.

REASON OF SCRAPING PLANNING COMMISSION

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