The Role of the Planning Commission of India
The Role of the Planning Commission of India

The Role of the Planning Commission of India

The Planning Commission of India played a vital role in shaping the country's economic policies and development strategies. Established in 1950, it functioned as an advisory body, formulating five-year plans to steer India's economic growth. Though replaced by the NITI Aayog in 2015, understanding its role is crucial for comprehending India's developmental history.

Introduction to the Planning Commission

The Planning Commission was set up by a resolution of the Government of India in March 1950. It aimed to promote a rapid increase in the living standards of Indians through efficient resource utilization. Jawaharlal Nehru, India's first Prime Minister, was its first chairman. The Commission's creation was part of India's effort to transition from a colonial economy to a self-reliant and modern economy.

Objectives of the Planning Commission

The primary objective was to assess and allocate resources for the nation's developmental needs. It aimed to improve the economic and social welfare of the people. The Commission focused on ensuring an equitable distribution of wealth and bridging the gap between different regions.

Functions of the Planning Commission

The Planning Commission had several key functions:

  1. Formulating Five-Year Plans: These plans were blueprints for economic development over five years. Each plan set specific targets for sectors like agriculture, industry, and services.
  2. Resource Allocation: The Commission allocated financial resources among various states and sectors. It ensured funds were used efficiently and effectively.
  3. Policy Advisory: It advised the government on strategic policy matters. This included policies on resource management, employment generation, and poverty alleviation.
  4. Monitoring and Evaluation: The Commission monitored the implementation of plans and evaluated their outcomes. This helped in making necessary adjustments to policies and strategies.

Planning Commission's Impact on Indian Economy

The Planning Commission's work significantly impacted India's economic landscape. The First Five-Year Plan (1951-1956) focused on agriculture and aimed to increase food production. The Green Revolution, which began in the 1960s, was a direct result of such agricultural focus, leading to self-sufficiency in food grains.

The Second Five-Year Plan (1956-1961) emphasized industrialization, particularly heavy industries. This plan laid the foundation for India's industrial sector, establishing major steel plants and infrastructure.

In subsequent plans, the Commission addressed various aspects of the economy. The focus included poverty reduction, employment generation, and sustainable development. The Eighth Five-Year Plan (1992-1997) marked a significant shift towards liberalization and economic reforms. This period saw increased private sector participation and globalization of the economy.

Transition to NITI Aayog

In 2015, the Planning Commission was replaced by the National Institution for Transforming India (NITI Aayog). This transition reflected a change in approach from centralized planning to a more flexible and inclusive model. NITI Aayog aims to foster cooperative federalism and enhance state participation in the development process.

Criticisms of the Planning Commission

Despite its contributions, the Planning Commission faced several criticisms:

  1. Centralized Approach: Critics argued that its top-down approach ignored local needs and priorities. The one-size-fits-all model often failed to address regional disparities.
  2. Bureaucratic Inefficiencies: The Commission was criticized for its slow decision-making processes. The bureaucratic hurdles often delayed project implementations.
  3. Inflexibility: The rigid five-year planning cycles were sometimes incompatible with the dynamic nature of the economy. The inability to quickly adapt to changing economic conditions was a significant drawback.


The Planning Commission of India played a crucial role in guiding the nation's economic policies and development strategies. Its efforts in formulating and implementing five-year plans contributed significantly to India's growth trajectory. However, the transition to NITI Aayog marked an evolution towards a more adaptive and inclusive planning process. Understanding the legacy of the Planning Commission is essential for appreciating the complexities of India's developmental journey.

Live Examples

  1. Green Revolution: Initiated during the Third Five-Year Plan, it transformed India's agriculture. It led to self-sufficiency in food grains and reduced dependency on imports.
  2. Industrialization in the Second Plan: Establishing steel plants in Bhilai, Durgapur, and Rourkela boosted industrial growth. These plants laid the foundation for India's heavy industries.
  3. Economic Reforms in the Eighth Plan: The liberalization policies introduced during this plan opened up the economy. It attracted foreign investments and increased private sector participation.

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By focusing on these aspects, the article comprehensively covers the role of the Planning Commission, highlighting its significance and evolution in India's economic landscape.

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