Planning Commission of India

The Planning Commission PSC notes

The Planning Commission was a government agency that paved way for the economic and social development of India, especially through Five Year Plans.

It was a non-constitutional and non-statutory advisory council established on March 15, 1950, under the leadership of Jawaharlal Nehru in line with Article 39 of the constitution, which is a part of the directive principles of state policy.

However, it was scrapped in 2014 after 64 years of functioning by Prime Minister Narendra Modi and was renamed as NITI Aayog.

The Planning Commission was an important topic for Kerala PSC and over the years, the PSC has asked several questions on this topic.

Basic Facts

  • Established on – March 15, 1950.
  • Headquarters – Yojana Bhawan, New Delhi.
  • First Chairman of Planning Commission – Jawaharlal Nehru.
  • First Deputy Chairman of Planning Commission – Gulsarilal Nanda.
  • Last Deputy Chairman of Planning Commission – Montek Singh Ahluwalia.
  • Last Chairman of Planning Commission – Narendra Modi.
  • Father of Indian Economic Planning – M. Vishweswaraiah.
  • Father of Indian Statistics –  Prof. Prasanta Chandra Mahalanobis.


When the British left us and India became independent, the overall state of our country's social, economic, and political situation was very dire. The community was segregated based on caste, class, and religion and was in a highly impoverished condition.

The economy of the nation was in shambles as a result of the British's wealth drain and deindustrialization policies.

It was believed that the British were able to earn around 12 million pounds annually from India. As a result, India, the "brightest jewel in the British Crown," became the poorest country in the world, an impoverished "Third World" country.

We'll now take a look at some of the significant milestones on the path to forming the Planning Commission of India, which are listed below:

  • The first attempt to build a national plan for India began much earlier, in 1938, when Congress president Subhash Chandra Bose established the National Planning Committee, which was chaired by Jawaharlal Nehru. However, it did not result in any key solutions due to Second World War and other issues.
  • The Bombay Plan of 1944 under the leadership of Ardeshir Dalal was the second attempt. J.R.D. Tata, G.D. Birla, Purshottamdas Thakurdas, Lala Shriram, Kasturbhai Lalbhai, AD Shroff, Ardeshir Dalal, and John Mathai were among the eight prominent industrialists who suggested it.
  • In their "A Brief Memorandum Outlining a Plan of Economic Development for India," they recommended doubling per capita income and tripling national income in 15 years.
  • It envisioned a significant public sector with governmental interventions and restrictions to preserve indigenous businesses. However, politicians, including Nehru, deemed it unworkable, and the plan was abandoned.
  • M. N. Roy then created the People's Plan (1945), which was based on Marxist socialism. It was a ten-year plan that highlighted the need of supplying people with the "basic essentials of life" and placed a strong emphasis on agriculture.
  • Sriman Narayan Agarwal devised the Gandhian Plan in 1944. Influenced by Gandhian economic thought, it stressed economic decentralization with a focus on rural development through the growth of cottage industry.
  • The Sarvodaya Plan of 1950, developed by Jaiprakash Narayan, was inspired by Vinoba Bhave's Sarvodaya notion and the Gandhian Plan. Its focus was on agriculture as well as small and cottage enterprises.
  • In 1944, the British government established a 'Planning and Development Department' led by Ardeshir Dalal. It was, however, scrapped in 1946.
  • The Interim Government established a planning advisory board led by K. C. Neogy in October 1946 to assess plans and future projects and provide recommendations.

Planning Commission

The All India Congress Committee constituted the Economic Programme Committee (EPC) immediately after independence in 1947, with Jawaharlal Nehru as its chairman.

This committee was tasked with developing a strategy to balance corporate and governmental partnerships, as well as urban and rural economies. This committee advocated the formation of a planning commission in 1948 and the issue of planning was reviewed in 1949.

In his 1950 budget speech, then finance minister John Mathai announced the setting up of the Planning Commission. 

The Planning Commission was established by a resolution of the Government of India on March 15, 1950, in order to promote a rapid rise in the standard of living of the people through efficient exploitation of the country's resources, increased production, and offering opportunities to all for employment in the service of the community.

National Development Council (NDC)

National Development Council Logo

The National Development Council, also known as the Rashtriya Vikas Parishad, was  established on August 6, 1952, as the apex body to reinforce and organize the nation's effort and resources in support of the Planning Commission's Five Year Plans.

After Parliament, the National Development Council is the apex body for making judgments on matters pertaining to the approval of the country's five-year plans.

The Prime Minister chairs the Council, the Secretary to the Planning Commission serves as its secretary, and the Commission provides administrative and other support to the Council.

There was a proposal to disband NDC, but it has yet to be implemented.


  • Chairman – Prime Minister; presided over the meetings of the Commission
  • Deputy Chairman – de facto executive head (full-time functional head);
    • Appointed by – the Central cabinet for a fixed tenure and enjoyed the rank of a cabinet minister.
    • responsible for the formulation and submission of the draft Five-Year Plan to the Central cabinet.
    • Could attend cabinet meetings without the right to vote.
  • Members – 
    • Part-time members – Central ministers.
    • Ex-officio members – Finance Minister & Planning Minister.
In India, the Planning Commission was in charge of determining the poverty level. It was responsible for submitting the drafts of the Five Year Plan to the Union Cabinet.

Deputy Chairpersons of Planning Commission of India

Gulzari Lal Nanda
(Minister of Planning )
1953-60 &
V.T. Krishnamachari1953-60
C.M. Trivedi1963
Ashok Mehta
(Minister of Planning)
Dr. D.R. Gadgil1967-71
C. Subramaniam
(Minister of Planning)
D.P. Dhar
(Minister of Planning)
P.N. Haksar1975-77
Dr. D.T. Lakdawala1977-80
N.D. Tiwari
(Minister of Planning)
S.B. Chavan
(Minister of Planning)
P.C. Sethi
(Minister of Planning)
P.V. Narasimha Rao
(Minister of Planning)
Dr. Manmohan Singh1985-87
P. Shiv Shanker
(Minister of Planning)
Madhav Singh Solanki
(Minister of Planning)
R.K. Hegde1989-90
Prof. Madhu Dandavate
(Finance Minister)
Mohan Dharia1990-91
Pranab Mukherjee1991-96
Prof. Madhu Dandavate1996-98
Jaswant Singh1998-99
K.C. Pant1999-2004
Montek Singh Ahluwalia2004-09 &

What were the Functions and Responsibilities of the Planning Commission?

  • Make an assessment of the material, capital, and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nation’s requirement;
  • Formulate a Plan for the most effective and balanced utilization of country's resources;
  • On a determination of priorities, define the stages in which the Plan should be carried out and propose the allocation of resources for the due completion of each stage;
  • Indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation, should be established for the successful execution of the Plan;
  • Determine the nature of the machinery which will be necessary for securing the successful implementation of each stage of the Plan in all its aspects;
  • Appraise from time to time the progress achieved in the execution of each stage of the Plan and recommend the adjustments of policy and measures that such appraisal may show to be necessary; and
  • Make such interim or ancillary recommendations as appear to it to be appropriate either for facilitating the discharge of the duties assigned to it or on a consideration of prevailing economic conditions, current policies, measures, and development programmes or on an examination of such specific problems as may be referred to it for advice by Central or State Governments.


The Planning Commission has planned projects worth approx. Rs 200 lakh crore in its 64 years of existence. Twelve five-year plans were planned. As a result, India attained agricultural self-sufficiency and made significant development in capital and consumer goods.

It placed a premium on infrastructure development and support. As a result, huge investments were made in education, energy, industry, railways, and irrigation.

The planning commission was involved in various significant ideals, including nationalization and the green revolution, and adapted to new concepts like liberalization, privatization, and inclusivity.

Social justice, governance, job creation, poverty reduction, health, and skill development were all also prioritized by the Planning Commission.

This methodical and steady execution of planning has been credited with India's transformation from a poor to an emerging economic power.


  • Implementation, monitoring, and evaluation are all deficient.
  • An ineffective platform for settling inter-ministerial and inter-state conflicts.
  • There is no formal system in place for working with states on a regular basis.
  • Insufficient capability competency and topic expertise; insufficient networks with think tanks; and restricted access to specialists outside the government.
  • It was only after the 12th five-year plan were expert opinions solicited.
  • Land reforms were not carried out.
  • It was a toothless organization incapable of holding the union/states/UTs accountable for failing to accomplish the objectives.
  • A 'one size fits all' technique was used to develop the plans. As a result, many tactics failed to yield tangible results.

Its influence began to wane with the 9th Five-Year Plan (1997-2002). The state governments were given the flexibility to create and implement their own ideas without having to obtain authorization from the planning commission for every little thing.

In its later years, the Planning Commission morphed from being the 'cornerstone of India's economic and social policy' to an impediment, so much so that even former Indian prime minister Rajiv Gandhi from the Congress party referred to it as "a bunch of jokers."

When was the Planning Commission of India dissolved?

Prime Minister Narendra Modi stated his desire to disband the Planning Commission in his first Independence Day speech in 2014. On August 17, 2014, the Planning Commission was dissolved, and it was reconstituted by NITI Aayog, which was founded on January 1, 2015.

We'll discuss more in detail about NITI Aayog and Five Year Plans in the upcoming posts.

Kerala & Planning Commission

  • The Planning Commission for the Indian States (including all Kerala) came into existence in – 1967.
  • M. K. A. Hameed
    Chairman of State Planning Commission – Chief Minister.
  • First Chairman of State Planning Commission – E. M. S. Namboodiripad.
  • First Deputy Chairman of State Planning Commission – M.K.A. Hameed. 
  • Current Chairman of State Planning Commission – Pinarayi Vijayan.
  • Current Deputy Chairman of Planning Commission – V. K. Ramachandran.

  • National Statistics Day – June 29.
    • Birth anniversary of P.C. Mahalanobis.
  • Author of Planned Economy of India – M. Vishweswaraiah.
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