Planned Development
Planning: – Planning is to make future plans for the best use of existing resources. India’s economic development includes
economic growth and social justice. Government has to play an important role in the economic development of India.
Development: –
❖ ‘Development’ has a different meaning for different sections of the people.
❖ People often refer to the ‘West’ as the standard for measuring development.
❖ ‘Development’ was about becoming more ‘modern’ search and about becoming more like the industrialized
countries of the West.
Economic Development: – Economic development is defined as a sustained improvement in material well-being of society.
Objectives of planning: – The objectives of planning are to make economy self-reliant and self-generating through planned
strategies and to activate distributive justice among various sectors of economy.
‘Left wing’ in politics: –
❖ The people who wanted that the system of development should be made keeping in mind the poor and backward
classes in the country are called left wing.
❖ These people were concerned for the poor.
❖ They wanted that such a system should be made so that the welfare of the poor people can be maximized in the
country.
‘Right wing’ in politics: –
❖ These were the people who were in support of capitalism.
❖ They wanted that the policies of trade in the country should be simplified and the rules of business should be
simplified by the government.
❖ Private sector should be encouraged.
J.C. Kumarappa: – J. C. Kumarappa was an Indian economist and a close associate of Mahatma Gandhi. A pioneer of rural
economic development theories, Kumarappa is credited for developing economic theories based on Gandhism – a school
of economic thought. He coined ‘Gandhian economics’. He was the author of ‘Economy of Permanence’ and a member of
planning commission.
Changing Nature of India’s Economic Development: – Economic development Changed in India in 3 phases: –
1. At the Time of Independence
2. After independence till two decades About 1950-1970)
3. From 1991 onwards
1. At the time of Independence (models of development in India)
❖ At the time of independence, criteria for development means to follow western countries.
❖ There were two models of development at the time of Independence:
(i) Capitalist Model: An economic setup in which the upliftment of private sector is focused in comparison to
upliftment of the society as a whole.
(ii) Socialist Model: An economic setup in which the upliftment of society as a whole is focused in comparison to
upliftment of the private sector.
❖ India adopted a Mixed Economy Model which was the combination of both the model i.e. capitalist and socialist
model.
2. After Independence till two decades (About 1950-1970): –
❖ During this phase more importance was given to the Public Sector.
❖ Public sectors are the group of those industrial units which are controlled and owned by the government. For
example – Hindustan Machine tools (HMT), Bharat Heavy Electricals Ltd. (BHEL) and Indian Oil Corporation (IDC).
3. From 1991 onwards: –
❖ Due to the end of bi-polarity, disintegration of Soviet Union and Unipolar world only liberal-capitalist system was
prevalent in the world.
❖ Therefore, era of liberalization, privation and globalization started.
❖ Accordingly, India also changed its economic policies and opened its economy.
Bombay Plan: – A group of industrialists prepared a resolution in 1944 for economic development of India. This is also
known as the Bombay Plan.
Planning Commission (Yojna Aayog): – Planning Commission (Yojna Ayog) was established on 15 March 1950. It was a non-
constitutional body and established by a resolution of government, Prime Minister is the ex – officio chairperson of Yojna
Aayog.
Objectives of Planning Commission: –
❖ To make an assessment in the material, capital and human resources of India.
❖ To formulate a plan for the most effective and balanced utilization of country’s resources.
❖ To appraise the progress of plans.
Note: – Since 1st January 2015 Planning Commission has been replaced by NITI Aayog.
Five Years Plans: – It means to make plans for five years for the economic development of the country.
First Five years Plan (1951-56): – Main focus of this plan was agriculture. Investment was made on Dams and means of
irrigation during this plan. Bhakhra Nangal Dam project is its example.
Second Five Years Plan (1956-61): – Main focus of this plan was Industry. Heavy duties were levied on import to protect
domestic industries. This plan was formulated by P.C. Mahalnobis.
Short note on Second Five Year Plan: – The second Five Year Plan was launched on 1st April, 1956. It was much bigger and
bolder than the first. It was observed by the planning commission that the second five-year plan has to carry forward the
process initiated in the First Plan period. It must provide for a larger increase in production, in investment and in
employment.
The principal task was to ensure an increase in national income by about 25 percent over the five years, to increase
employment opportunities at a rate sufficient to absorb the increase in the labour force, consequent on the increase in
population and to take a major stride forward in the direction of industrialization so as to prepare the ground for more
rapid advance in the plan period to come.
Kerala Model: – For development and planning education, health, land reforms, food distribution and abolition of poverty
were emphasized.
The National Development Council (NDC): – The National Development Council was established on 6 August 1952, by an
executive resolution of the Government of India on the recommendation of the First Five Year plan. It is a non-
constitutional Body / Advisory Body.
NDC and Development: – Its first chairman and India’s first Prime Minister Pandit Jawahar Lal Nehru stated that the NDC is
essentially a forum for “intimate cooperation” between State governments and the Centre for all the tasks of national
development.
Objectives of NDC: –
❖ To secure co-operation of the states in the execution of the plan.
❖ To strengthen and mobilize the effort and resources of the nation in support of the plan.
❖ To promote common economic policies in all vital spheres.
❖ To ensure the balanced and rapid development of all parts of the country.
❖ To improve the living standard of the people.
❖ To increase the per- capita income.
Functions of NDC: –
❖ To prescribe guidelines for the formulation of the National Plan.
❖ To consider the National Plan as formulated by the Yojana Aayog.
❖ To make an assessment of the resources that are required for implementing the Plan and to suggest measures for
augmenting them.
❖ To consider important questions of social and economic policy affecting national development.
❖ To review the working of the Plan from time to time.
❖ To recommend measures for achievement of the aims and targets set out in the national Plan.
NITI Aayog: –
NITI stands for
N – National
I – Institution
T – Transforming
I – India
❖ NITI Aayog, was formed by a resolution of the Union Cabinet on January 1, 2015. It is also a non-constitutional
body / advisory body.
Need for Establishment NITI Aayog: –
❖ After independence a Planning Commission based on socialist model was formed for the planned development of
India.
❖ But in the era of globalization, especially in the 21st century Yojna Aayog was becoming ineffective and irrelevant
to face the pressing challenges of development.
❖ Political, Economical, Social and Technical scenario of the country has changed.
❖ Now India has strived to become a developed Nation.
❖ Hence, during his Independence Day speech on 15 August 2014, our present Prime Minister talked about the
abolition of the Planning Commission and NITI Aayog was constituted in place of planning commission on 1st
January 2015.
Objectives of NITI Aayog: –
❖ To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of
the States.
❖ To foster cooperative federalism through structured support initiatives and mechanisms with the States on a
continuous basis, recognizing that strong States make a strong nation.
❖ To ensure, in areas that are specifically referred to it, that the interests of national security are incorporated in
economic strategy and policy.
Composition of NITI Aayog: –
✓ Chairman: Prime minister (EX – officio member)
✓ Vice – Chairman
✓ CEO
✓ Chief ministers of states Chief ministers / Administrators of UTS
✓ Full time members
✓ Part time members
✓ EX – Officio members
✓ Experts
❖ The Prime Minister of India is the ex-officio chairman of NITI Aayog. He appoints its vice-Chairperson.
❖ The first Vice-Chairperson of the NITI Aayog was Sh. Arvind Panagaria.
Salient Features of NITI Aayog: –
❖ Serves as a Government Think Tank.
❖ Fosters cooperative Federalism.
❖ Empowers the state to make a strong Nation.
❖ Maintain coordination between National Security and Economic policies.
❖ Provides strategic and technical advice on policy matters.