After getting Independence on 15th August 1947, the Prime Objective of Union Government was Welfare of the Masses. For this an efficient Economic Planning was a must. Union Government established Planning Commission on 15th March, 1950 as an Executive Body to formulate the necessary economic plan for India along with other functions. It was established in accordance with Article 39 of the Constitution under Directive Principles of State Policy (DPSP under Part-IV of the Constitution). Article 39 states equal pay for equal work, distribution of Country’s resources for common good, avoid concentration of wealth in few hands etc. The first initiative of Economic Planning was made by Netaji Subhash Chandra Bose in 1938 when he was President of Congress which was drafted by Sh. Meghnad Saha. British Government established a Planning Board which functioned from 1944 to 1946.
Planning Commission recommended 5 years Economic plans as per the model of Erstwhile USSR (Union of Soviet Socialist Republics). Union Government accepted the recommendations of Planning Commission and started 5 years plans in India w.e.f. 01.04.1951.
|1st Five year plan||1951 - 56||Focus on Agriculture|
|2nd Five year plan||1956 - 61||Focus on Industry|
|3rd Five year plan||1961 - 66||could not be completed/td>|
The Tenure of 3rd Five year plan was till 1966 but it was discontinued in 1965 due to
(a) War with Pakistan
(b) Devaluation of Indian Currency by Union Government
(c) Famine in Eastern India for two years.
(d) Rising prices etc
It was considered that instead of Five years, we should make Annual Plans. We switched from 5 year plans to Annual Plans. During 1966-1969, we had three Annual Plans.
In 1969, our economy stabilised and again we switched to five year plans. The duration of 4th Five year plan was 1969-1974. The system of Five year plans continued but to political instability during V.P. Singh Government again in 1990 we discontinued 5 years plan and switched to Annual Plans. During 1990 to 1992 we had 2 Annual Plans. Our economy stabilised in 1992 during the Government of Prime Minister Narasimha Rao and we again switched to 5 year plan. The last 5 year plan was 12th 5 year plan for the period 2012 to 2017. Narendra Modi Government discontinued five years plans after completion of 12th Five year plan on 31st March, 2017.
Major Objectives of 12th 5 year plan—
1) To achieve growth rate of 8.2% but NDA Government under the leadership of Prime Minister Narendra Modi reduce this target to 8% stating that target of achieving 8.2%. Growth Rate is not possible.
2) Reduce poverty by 10%.
Composition of Planning Commission
Chairperson - Ex-officio (Prime Minister)
Vice-Chairperson (Renowned Economist)
Members- Ex-officio (Union Cabinet Ministers e.g. Finance Minister, Home Minister, Defence, Agriculture, Industry, Law Minister etc.)
Full Time Members - Experts in field of economics, finance, statistics, Industry, Science & Technology, Administration etc
First Vice Chairperson of Planning Commission – Sh. Guljar Lal Nanda.
Last Vice Chairperson of Planning Commission – Sh. Montek Singh Ahluwalia.
Modi Government came into power on 26th May, 2014. The view of the Modi Government was that earlier we were a developing Country but now we have emerged as one of the largest Emerging Economy of the World. Planning Commission has become an obsolete institute. We need a more Dynamic Body to face the new challenges and to make India a developed Country. Ultimately Modi Government scraped Planning Commission on 13th August, 2014 and a new institution (Niti Aoyog) was constituted as an Executive Body on 1st January, 2015 by an order of Union Government. By this way Planning Commission was replaced by a new institution i.e. Niti Aayog.
Opposition parties criticised the action of Modi Government stating it as an undemocratic and antifederal in nature. In their opinion, Planning Commission contributed a lot to the development of India and there was no need to scrap the same.