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Economy 16: Planning Commission & NITI Aayog

The Planning Commission
Established 15th March 1950

The Planning Commission was an institution in the government of India which formulated India's Five-year plans. After India achieved independence, a formal model of planning was adopted, reporting directly to the PM of India. It was established on 15th March 1950, with PM Pandit Jawaharlal Nehru as the Chairman. The idea was taken from the Soviet Union (USSR).

Timeline: Evolution of Planning

1934: Visvesvaraya Plan

M. Visvesvaraya outlined planning in his book "The Planned Economy of India".

1938: Congress Plan

Proposed by Nehru; however, it was not implemented due to World War II.

1944: Bombay Plan

Drafted by industrialists like JRD Tata, GD Birla, Kasturbhai Lalbhai et al.

1945: People's Plan

Proposed by MN Roy.

1950: Sarvodaya Plan

By Jayaprakash Narayan, based on Vinoba Bhave's philosophy.

1950: Cabinet Resolution

Formal resolution to form the Planning Commission.

1952: National Development Council (NDC)

Established by a cabinet resolution to approve the plans.

2014: Shuts Down
2015: NITI Aayog
Summary of Five Year Plans (FYP)

1st FYP (1951-56): Harrod Domar Model

Focus: Agriculture, Irrigation & Power.

2nd FYP (1956-61): P.C. Mahalanobis Model

Objective: Rapid industrialization.

3rd FYP (1961-66): Gadgil Yojna

Focus: Production of wheat. Failed due to droughts & wars with Pakistan and China.

Plan Holidays (1966-69): Period of the Green Revolution.

4th FYP (1969-74)

Key event: 1969 - Nationalisation of 14 major banks.

5th FYP (1974-79): D.D. Dhar Model

Focus: Poverty Alleviation. Slogan: "Garibi Hatao". Rejected by the newly elected Morarji Desai government in 1978.

6th FYP (1980-85)

Focus: Economic liberalisation by Eradicating poverty & achieving technological self reliance.

7th FYP (1985-90)

Focus: Private sector got priority for the first time.

8th FYP (1992-97)

Focus: Implementation of LPG Reforms (Liberalisation, Privatisation, Globalisation). New Economic Policy.

9th FYP (1997-2002)

Launched in the 50th year of India's independence.

10th FYP (2002-07)

Growth target: 8%. Achieved: 7.6%.

11th FYP (2007-12)

Theme: Rapid & more inclusive growth.

12th FYP (2012-17)

Theme: Faster, more inclusive & sustainable growth. (Last Plan).

NITI Aayog (2015 - Present)
National Institution for Transforming India

Established on 1st January 2015 to replace the Planning Commission. It serves as the think tank of India.

CHAIRMAN

Prime Minister of India

VICE CHAIRMAN

S. Suman Berry

CEO

BVR Subrahmanyam

HEADQUARTERS

New Delhi

• It is an Extra-Constitutional body.

• Nodal agency for Sustainable Development Goals (SDGs): 17 goals and 169 sub-goals.

Practice Quiz

When was the Planning Commission of India established?

15th August 1947
26th January 1950
15th March 1950
1st April 1951

The 1st Five Year Plan (1951-56) was based on which model?

Mahalanobis Model
Harrod-Domar Model
D.D. Dhar Model
Gadgil Yojna

Which Five Year Plan focused on 'Garibi Hatao' (Poverty Alleviation) and was later rejected by the Morarji Desai government?

4th FYP
5th FYP
6th FYP
7th FYP

The 8th Five Year Plan (1992-97) is significant for implementing which reforms?

Green Revolution
Nationalisation of Banks
LPG Reforms
Purna Swaraj

Under which Five Year Plan did the private sector get priority for the first time?

6th FYP
7th FYP
8th FYP
9th FYP

NITI Aayog is also known as the:

Regulatory Hub
Think Tank of India
Economic Council
Planning Board