7 PM |Thinking national, acting local| 2nd April 2020

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Context: Flaws in National Planning in India.

The attack by the SARS-CoV-2 virus has highlighted the bad shape of the Indian economy and the precariousness in the lives of millions of people. National planning has failed to produce all-round development of India’s economy so far. An all-round plan for recovery from the pandemic is required.

This brings us to the questions of National Planning in India. In this article, we will explain them below:

  • What is evolution of national planning in India?
  • What is importance of Planning?
  • What are the pre-conditions of planning in a democratic country?
  • What are the challenges to any Planning Institute?
  • Conclusion

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What is the evolution of national planning in India?

  • The idea of planned economy was crystallized in 1930s when our national leaders came under the influence of socialist philosophy. India’s Five year plans were very much impressed by the rapid strides achieved by the USSR through five years plans.
  • In 1934, Sir M. Visvesvaraya had published a book titled “Planned Economy in India”, in which he presented a constructive draft of the development of India in next ten years. His core idea was to lay out a plan to shift labor from agriculture to industries and double up National income in ten years.
  • The first attempt to develop a national plan for India came up in 1938. In that year, Congress President Subhash Chandra Bose had set up a National Planning Committee with Jawaharlal Nehru as its president.
  • The Bombay Plan (1944): In the early 1944, several eminent industrialists and economists of Bombay Sir Purshottamdas Thakurdas, Mr. J.R.D. Tata and six others made another attempt and published a development plan, which was called Bombay plan. Its main purpose was to stimulate the thinking of the people and to lay down the principles on the basis of which a national plan could be formulated and executed.
  • Gandhian Plan (1944): Gandhian Plan which based upon Gandhian philosophy was put forward by Shri S.N. Agarwal of Wardha. The outlay of the plan was estimated Rs. 3500 crores only and it sought to set up a decentralized economy with self sufficient villages and Industrial production. It laid emphasis on small scale industries and agriculture.
  • People’s Plan (1945): Another plan was prepared by the late M.N. Roy (a ten year plan) called the ‘People Plan.’ It was different from the Bombay plan in methodology and priorities. Its chief emphasis was on agricultural and consumer goods industries through collectivization and setting up of sate owned industrialization.
  • Planning Advisory Board In October 1946, a planning advisory board was set up by Interim Government to review the plans and future projects and make recommendations upon them.
  • Planning Commission (1950): India has adopted a path of development, which is known as Socialist Path and Mixed Economy, On the one hand, India has encouraged private business and industry and on the other it has almost full control, at least in principle, over all the major entrepreneurial and business activities. The Planning Commission was set up by a Resolution of the Government of India in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community.
  • Planning Commission was replaced by a new institution, NITI Aayog on January 1, 2015 with emphasis on ‘Bottom – Up’ approach to envisage the vision of Maximum Governance, Minimum Government, echoing the spirit of ‘Cooperative Federalism’.

What is importance of Planning?

  • Planning is the most important tool in the battle against poverty and unemployment. Poverty and unemployment were the central problems of our National Five-Year Plans.
  • The answer to poverty and unemployment lies in planned development in the sectors of agriculture, power, irrigation, transportation, social life and environment. Planning therefore, is the centre of our lives and should contain the charter for our economic betterment.

What are the pre-conditions of planning in a democratic country?

There are certain general preconditions for democratic planning, namely:

  1. there must be a correct comprehension of the laws of development of the society where planning is to take place,
  2. there must be means at hand for guiding the development of the society at all levels and
  3. All this must be implemented through authentic participation. i.e. for democratic planning it is not enough to have participation, one must also be able to plan.

What are the challenges to any Planning Institute?

Any planning institution in a federal and democratic system faces two basic challenges when it comes to performing a long-term role — a constitutional challenge, and the challenge of competence.

  • Constitutional Challenge:
    • Shorter span of government: The term of governments in a democracy changes in shorter span which generally pause the ongoing plans. There must be provisions of continuing the policies and plans even if the government is changed.
    • Since the planning body in India does not have constitutional status, it will be forced to bend to the will of the government. Planning in China does not face this disruption.
    • Short- term of plans: Short-termism in policymaking is a weakness of electoral democracies everywhere. China’s long term planning can be studied for a stronger planning.
    • Financial Autonomy: Economists say that planning is weak when planners do not have the powers to allocate money for national priorities, which NITI Aayog does not have.
    • Centre-state relations: India’s national planning process must address the constitutional relationship between the Centre and the States.  Finance commission, a constitutional body was established to determine the sharing of centrally raised resources with the States. States which are becoming self-sufficient in their resources, questions the efficacy of planning commission. It was argued that the commission was out of touch with their ground realities and had little experience of how to get things done to produce outcomes.
  • Competence Challenge:
    • A national planning institution must guide all-round progress. It must assist in achieving not just faster GDP growth, but also more socially inclusive, and more environmentally sustainable growth. Thus, it needs a good model in which societal and environmental forces are within the model.
    • The globalisation agenda has been driven by an economic agenda, with policies promoting global trade and finance to maximise global economic output. It has paid too little attention to the impact of the ‘GDP agenda’ on the well-being of communities where employment declines when production moves to lower cost sources elsewhere or to the total environmental impact of global supply chains.


Just like all the organs in human body are important for the overall body functioning, a healthy global system will only work when it helps the weaker members to become stronger. In democratic governance, the national government must devolve functions to the state governments and even to the third- tier of district or city governance to have local solutions.

Source: https://www.thehindu.com/opinion/op-ed/thinking-national-acting-local/article31230613.ece


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