broader goals are stated and the outlines of future development and forecast. It is a continuous planning process asthe plan is revised every year in the light of new information.Rolling plan was introduced in India by the Janta Government in 1978 as the sixth Five Year Plan (1978-1983). But thecongress government abandoned it in 1980 and relaunched the sixth five year plan (1980-85) as a fixed plan.
A fixed plan lays down definite aims and objectives which are required to be achieved during the plan period, say 4, 5,6 or 7 years. Physical targets and financial outlays are seldom changed except under emergencies.
The nature and scope of planning is largely determined by the nature of the economic systemin which it is practiced. Economies can be classified into the following categories:1
. Socialist Economy
: It is characterized by the existence of public enterprise or state ownership of capital in all theimportant spheres of the economic activity. All important economic decisions are undertaken by the planning authority.Such economies generally pursue planning by direction or imperative planning. .2.
: It is characterised by the existence of private enterprise and ownership of all importantmeans of production. Resources are allocated by the operation of the
by which' buyers and sellersdetermine what goods and services will be bought and sold in the market, in what quantities and at what prices. Sucheconomies generally pursue indicative planning, as the role of planning authority and government is minimal.3.
: It is characterized-by the presence of the features of socialism as well as that of capitalism i.e.public sector co-exist with the private sector. Resources are allocated on the basis of the
modified price mechanism,
that is on the basis of demand and supply with selective government intervention. Such economies generally pursueplanning by inducement i.e. government regulates the activities of the private sector through persuasive measures liketax holidays, subsidies etc.4.
: It is an extreme form of a socialist economy in which all means of production are ownedand operated by the state and private property is not allowed. It is modeled on the notion of the Karl Marx i.e. "fromeach according to his ability, to each according to his needs." Socialism is said to be the preparatory stage to theattainment of a communist society but it has not yet established in any of the socialist country.
Features of Indian Planning
The important characteristics of the economic planning in India are as follows :(1)
: Indian planning has assumed indicative character since the Eighth Five Year Plan (1992-97)(2)
Decentralised and Democratic Planning
: People are involved at various stages of preparation andimplementation of the plans.(3)
: Planning process encompasses each and every sector of the Indian economy..(4
) Physical and Financial Planning
Resources are assessed and allocated in both realand money terms.
: The five year plans sets objectives and targets beyond the plan period eg. the 10
plan setscertain targets to be accomplished by 2012.
: The concept of core plan enables the planning authority in formulating effective plans through realisticassessment of the resources. Under a core plan, the Planning Commission asks the states to submit their projectedrevenue estimates. On the basis of these estimates, Planning Commission determines the expenditure, heads for stateAnnual Plans.
Ideas on Planning before Independence
Dr. M. Visvesvaraya made a landmark in the history of economic planning by writing a book entitled, PlannedEconomy for India, in 1934.
The National Planning Committee was set up in 1938 under the chairmanship of late Pandit Jawahar LaiNehru. It prepared a draft outline of the economic progress of the country
Bombay Plan was prepared by eight prominent businessmen of the country in 1944.
People's Plan was prepared by Shri M.N Roy in the year 1944.
Inspired by economic views of Mahatma Gandhi, Shri Shriman Narayan constructed a
thesame year (i.e. 1944)
However, none of these plans could materialize because of the indifferent attitude of the foreign rulers.
Planning in India