Although it is no longer operational (having been superseded by the NITI Aayog), the Planning Commission was an integral part of India's policymaking and governance.
For the UPSC civil services test, you may learn about the Planning Commission, its aims, composition, and activities in this page.
Planning Commission Dissolution
The Commission has been criticised of being a soviet-styled bureaucratic bureaucracy that impeded economic progress, despite its crucial part in India's transformation from a battered country during the Raj to a sovereign nation with high developmental ambitions. The commission was chastised in 2012 after spending almost Rs.35 lakhs to renovate two toilets and then claiming that those who spent more than Rs.27 per day were not poor.
It was superseded in 2014 by NITI Aayog, a more stable organisation. It's more of a think tank that collaborates with stakeholders to help the country flourish.
Planning Commission of India – UPSC Notes:-Download PDF Here
Planning Commission Background
The Planning Commission of India was a government institution that, among other things, created India's Five-Year Plans. The planning commission was tasked with ensuring that everyone had the opportunity to work in the community's service.
The Planning Commission was directly responsible to India's Prime Minister. It was founded on March 15, 1950, under the chairmanship of Prime Minister Jawaharlal Nehru. The Planning Commission was established by the Central/Union Government and was not established under the Constitution or legislation.
In March 1950, the Government of India passed a resolution establishing the Planning Commission. The government's main goals were to push a quick rise in Indians' living standards via profitable exploitation of the country's resources, increased output, and provided chances for everyone to work in the service of society. The Planning Commission was tasked with evaluating all of the country's resources, improving precious resources, making plans for the most productive and balanced use of resources, and determining priorities. The first Chairman of the Planning Commission was Pandit Nehru.
The first Five-Year Plan was started in 1951, and following Five-Year Plans were developed until 1965, when the conflict with Pakistan caused a hiatus. Drought for two years in a row, rupee depreciation, general price increases, and resource depletion disrupted the planning process, and the 4th Five-year plan began in 1969, after Annual Plans from 1966 to 1969.
Due to changing political circumstances and instability at the Centre, the 8th Plan was not introduced in 1990, and the years 1990-91 and 1991-92 were given Annual Plans. After the government began its economic liberalisation efforts in 1992, the 8th Plan was ultimately launched. The focus of the first eight Plans was on a growing public sector with enormous expenditures in heavy and fundamental industries, but following the publication of the ninth Plan in 1997, the focus turned away from heavy industries and toward the idea that planning should be mostly suggestive in character.
In the linked article on Economic Planning in India, you may find a list of five-year plans.
Planning Commission Functions
The 1950 resolution setting up the Planning Commission outlined its functions as the following:
- Make an assessment of the nation's capital, material, and human resources, including technical staff, and look into ways to improve these resources for the nation's development;
- Prepare a plan for the most efficient and balanced use of the country's resources;
- Define the stages in which the Plan shall be implemented, as well as the resources required to complete each stage;
- Determine the causes that impede economic development and the circumstances that, in light of the current social and political environment, should be established to ensure the Plan's successful execution.
- Determine the type of machinery necessary for each step of the Plan to be completed successfully in all aspects;
- Regularly assess the success made in implementing the Plan at all phases and offer any policy or measure corrections or changes that such an assessment may find essential;
- Make interim or supplementary suggestions to enable it to carry out the responsibilities entrusted to it, or based on a review of current economic circumstances, policies, measures, and development plans, or a study of specific problems that the Central or State Governments may refer to it.
Composition of Planning Commission
The Planning Commission, which used to function under the general leadership of the National Development Council, was chaired by the Prime Minister. As a composite body, the Deputy Chairman and full-time members of the Commission advised and guided the subject Divisions in the development of Five Year Plans, Annual Plans, State Plans, Monitoring Plan Programs, Projects, and Schemes.
Members of the Planning Commission
- Chairman – Prime Minister; presided over the meetings of the Commission
- De facto executive head (full-time functional head): Deputy Chairman
- Was in charge of drafting and submitting the draught Five-Year Plan to the Cabinet of Ministers.
- The Central Cabinet appointed him for a defined term and he had the position of cabinet minister.
- Without the ability to vote, he or she might attend cabinet sessions.
- Some central ministers are part-time members.
- Finance and Planning Ministers are ex-officio members.
Planning Commission vs NITI Aayog
| Parameter | Planning Commission | NITI Aayog |
| Members | Full-time: 8 full-time membersPart-time: No provision as such for part-time members | Full-time: Fewer full-time membersPart-time: Depends on the need |
| Financial Clout | Could allocate funds to ministries and state governments | Is a think tank and advisory body |
| Role of the States | Role limited to the NDC and the annual interaction during the Plan meetings | State governments play a more significant role |
| Secretaries | Secretaries or member secretaries were appointments through the usual process | Secretaries will be called CEO and be appointed by the Prime Minister |
| Policy formation | Policies were formed by the Commission after which states were consulted about fund allocation | Consulting would be done while the policy is being formulated |
| Power to allocate funds | Had the power to allocate funds | No power to allocate funds |
| Policy imposition | Imposed policies on states | No power to impose policies |
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