FIVE YEAR PLAN MODELS - AN ASSESSMENT- PLANNING

COMMISSION AND NITI AAYOG

The effects of British rule in Indian Economy

1. Decline of rural economy

2. End of handicrafts
3. Introduction of new land system completely disorganized and disintegrated the
agricultural economy of India.
 Indian economy needed a direction, which was crippled by foreign subjugation.
 India was still a geographic expression and a nation in making
 So the then politicians and think tanks opted for a planned economy and a
centralized planning body to formulate a plan for socio-economic development.
 Thus planning commission came into existence in March 1950 through a cabinet
resolution which became a permanent body of experts.
 After freedom Jawaharlal Nehru the first Prime Minister of independent India
wants to give importance rural economy and agriculture
 He introduced the concept of "Mixed economy with both public and private
partnership •
 Hence he decided to set up plans every five years for the development of Indian
economy.
 Jawaharlal Nehru is the 1st person to bring five years plan in the year 1950 - 1961
 This five years plan adopted from Russia. But Russia has seven years plan
 Therefore Planning Commission" formed in India in 1950.
 Chairman of planning commission is the Prime Ministers of India
 However Vice-Chairman deals with all activities in the commission
 Prime minister was the ex officio chairman of the planning commission assisted by
a deputy chairman
 It included 6 union cabinet ministers as its ex officio members
 There was also a member secretary

PLANNING COMMISSION OBJECTIVES

 Promote a rapid rise in the standard of living of the people by efficient exploitation
of the resources of the country
 Increase production
 Offer opportunities to all for employment in the service of the community

Functions and Responsibilities of the Planning Commission

 Make assessment of all resources of the country

 Augment deficient resources
 Formulate plans [Five Year Plans (FYP) for the most effective and balanced
utilization of resources and determining priorities
 Determine the stages of plan implementation
 Determine the nature of machinery required
 Indicate the factors which tend to retard economic developments
 Monitor and evaluate.

National Development Council

 National Development Council (NDC) is an executive body established by the

Government of India in August 1952, which is neither a constitutional nor a
statutory body
 It is the apex body to take decisions on matters related to approval of five year
plans of the country
 To ensure the co-operation of states in implementation of five years plans National
Development Council was formed
 Prime minister is the ex-officio chairman of the NDC
 National Development Council is composed of
o Prime Minister of India (Chairman of NDC)
 o Chief Ministers of all statea
o Administrators of all Union Territories
o All cabinet ministers
o Members of the Planning Commission
 The secretary of the Planning Commission is also the secretary of the NDC
 The administrative assistance is also provided by the Planning Commission

OBJECTIVES OF NDC

 NDC is an advisory body to the Planning Commission

o To strengthen and mobilize the effort and resources of the nation in support
of the Plan
o To promote common economic policies in allvital spheres.
o To ensure the balanced and rapid development of all parts of the country
 In addition to this. NDC provides a platform to all the states to discuss their
problems and issues related to development
 Till now 12 five years plan implemented in India, 2012 - 2017 was the last five
years plan in the history of India.
 Then NITI AYOG was introduced in 2015
 12th five year plan is the last in Indian history.
 The decades-old Five-Year Plans will make way for a three-year action plan, which
will be part of a seven-year strategy paper and a 15-year vision document
 The Niti Aayog, which has replaced the Planning Commission, is launching a three
year action plan from April 1, 2017

PLANNING COMMISSION:ACHIEVEMENTS

 PC laid emphasis on infrastructure developments and capacity building. As a

result, huge investments were made in education, energy industry, railways and
irrigation
 India became self sufficient in agriculture and made great progress in capital sector
goods and consumer sector goods.
 PC introduced many remarkable concepts like nationalisation, green revolution etc
and transformed itself to align with new concepts like liberalisation, privatisation
and inclusion
 Planning commission made great emphasis on social justice, governance,
employment generation, poverty alleviation, health and skill development
 The transformation of India from a poor to an emerging economic power is
credited to the orderly and phased manner in which planning was implemented

PLANNING COMMISSION: PROBLEMS

 No structural mechanism for regular engagement with states

 Ineffective forum for the resolution of centre-state and inter-ministerial issues
 Inadequate capacity expertise and domain knowledge: weak networks with think
tanks and lack of access to expertise outside government
 Failed to implement land reforms
 It was a toothless body was not able to make union/states/UTs answerable for not
achieving the targets
 Designed plans with one size fit for all approach. Hence, many plans failed to show
tangible results.
 Weak implementation, monitoring and evaluation

WHY PLANNING COMMISSION CHANGED?

 India's population has almost tripled to 121 Cr and many of the Indian states are as
big as European nations
 Indian economy has expanded from a poor nation to one of the largest economies.
 India ranks 3rd in GDP at purchasing power parity, has surpassed Japan and is now
standing just below the US and China
 The new economy needs institutions which can take India forward in a global
competitive environment.
 Plans have to be formulated by fulfilling the aspirations of states by tailoring the
plans to suit their needs and requirements
 The share of agriculture in GDP has been drastically decreasing while the share of
the service sector to GDP is increasing in India. From 1991. as our economy is
liberalised. private firms have been playing a major role in the economy
 Today we are living in a globalised world connected by modern transport, media,
communications and networked international institutions and markets.
 With the increasing levels of development, the aspirations of people have soared
from survival to safety and surplus
 So governance systems need to be transformed to keep up with the same

NITI Aayog: The new "think-tank

 Government of India has replaced the od planning commission started in 1950 with
a new institution called NITI Aayog on 1 January 2015
 It works under the chairmanship of Prime Minister
 NITI Aayog (National Institution for Transforming India) will seek to provide a
critical directional and strategic input into the development process.
 It focuses on co-operative federalism

WHAT'S NEW WITH NITI AAYOG?

 The centre-to-state one-way flow of policy, that was the hallmark of the Planning
Commission era, is now sought to be replaced by a genuine and continuing
partnership of states
 NITI Aayog = more a think tank than a finance distributing agency
 NITI Aayog will provide Governments at the central and state levels with relevant
strategic and technical advice across the spectrum of key elements of the policy
 With NITI Aayog, there will be multi-directional flow of policy (from Center to
States, from States to Center, between ministries etc.)
 Better inter-ministry coordination
 The NITI Aayog will develop mechanisms to formulate credible plans to the
village level and aggregate these progressively at higher levels of government
 The NITI Aayog will create a knowledge, innovation and entrepreneurial support
system through a collaborative community of national and international experts
 The National institution for Transforming India will act as a catalyst for the
development by a holistic approach
 NITI Aayog is based on the 7 pillars of effective governance - () Pro-People (2)
Pro-Activity (3) Participation (4) Empowering (5) Inclusion of all (6) Equality (7)
Transparency
 In NITI Aayog, the state governments has an equal role in nation's development
process and NITI Aayog promises the principle of co- operative federalism
 NITI Aayog is planned as a think tank institution which stands not only as a hub
for knowledge but also for good governance.
 It's a platform for monitoring and implementation of all governments by bringing
together various ministries at the center and state level
 Priorities include upliftment of the poor. marginalized and downtrodden policies
 Empower vulnerable and marginalized sections. redressing identity-based
inequalities of all kinds - gender. region, religion. caste or class.

STRUCTURE AND COMPOSITION OF NITI AAYOG

 Chairperson: Prime Minister of India

 Governing Council: Comprising the Chief Ministers of all States and Lt. Governors
of Union Territories
 Regional Councils: Will be formed to address specific issues and contingencies
impacting more than one state or region
FULL-TIME ORGANISATIONAL FRAMEWORK:

 Vice-Chairperson: to be appointed by the Prime Minister

 Members full-time: specialists with international exposure
 Part-time Members: maximum of 2, from leading universities research
organizations and other relevant institutions in an ex-officio capacity. Part-time
members will be on a rotational basis.
 Ex-Officio Members: maximum of 4 members of the Union Council of Ministers
to be nominated by the Prime Minister.
 Chief Executive Officer to be appointed by the Prime Minister for a fixed tenure, in
the rank of Secretary to the Government of India.
 Secretariat as deemed necessary