The Chief objective of planning was defined as initiating “a process of development which will raise living standards and open out for the people new opportunities for a richer and more varied-life.” Economic planning had to be viewed as “an integral part of a wider process aiming not merely, at the development of resources in a narrow technical sense, but at the development of human faculties and the building up of an institutional frame-work adequate to the needs and aspirations of the people.

Functions of Planning Commission: The main functions of the Planning Commission are:

1. Assessment of the material, capital and human resources of the country, including technical personnel, and formulation of proposals for augmenting such of these resources as are found to be deficient.

2. Formulation of Plans for the most effective and balanced utilization of the country’s resources.


3. Definition of stages in which the Plan should be carried out or a determination of priorities and allocation of resources for completion of each stage.

4. Determination of the nature of the machinery necessary for the implementation of the Plan in all its aspects.

5. Appraisal from time to time of the progress achieved in the execution of each stage of the Plan.

6. Public co-operation in national development.


7. Perspective planning.

Five Year Plans:

Economic planning involves coordination an(, conscious direction of economic activity with a view to achieving pre specified socio-economic objectives such as growth, the self-reliance removal of unemployment, social justice and modernisation.

It aims at the optimum utilisation of existing resources. The basic rationale behind planning is that free working of market forces can not guarantee the attainment of desired socio-economic objectives. There are three stages in the process of planning. a


1. Plan formulation

2. Plan implementation

3. Assessment and review of the Plan

Economic planning is of two types: Physical Planning implies allocation of resources in terms of material power and men to accomplish the targets specified in the Plan. Financial Planning implies provision of financial resources.


Indian chose a five-year frame for its plans due to many reasons. First, and foremost, it gave a medium-term perspective to planning. It could also be due to the fact that general elections are held every five years. It, therefore, gives the party that comes to power, adequate time to translate its promises into reality. Also, India’s first PM Jawaharlal Nehru was impressed by the success of the State directed Five-Year Plans of the Soviet Union.

Project undertaken take time to be completed. It may take some time before returns are forthcoming from it. Therefore, it is necessary to assess its performance over a realistic time period. Similarly, implementation of schemes also takes time.

Note: First plan total outlay in the 1952 original plan Provision; The Fifth Plan total outlay excludes Rs 450.00 crores of Hill and Tribal Areas; Outlays are at prices at base year of plan; the State Outlay for Ninth Plan includes the figures for UTs Tenth Five-year Plan (2002-07) was approved by National Development Council on 21 December 2002.

11 th Plan (2007-12):


Planning Commission in its meeting held on November 8, 2007 under the Chairmanship of Prime Minister Dr. Monmohan Singh cleared the draft of the 11th Plan (2007-12) that seeks to step up economic growth rate to 9%. (NDC also gave its approval to 11th plan on December 19, 2007).

The total outlay of the 11th Plan has been placed at Rs 3644718 crore which is more than double of the total outlay of the previous 10th Plan, in this proposed outlay, the contributions of union government and state government will be Rs. 2156571 crore and Rs 1488147 crore respectively (i.e. 59.2% and 40.8% of the total outlay respectively).

Gross Budgetary Support (GBS), which is the centre’s support to the plan has been fixed at Rs 1421711 crore, up from Rs 810400 crore in the previous Plan. 74-67% of GBS will be for priority sectors and the rest 25033% will be for non-priority sector. In 10th Plan this allocation share was 55.20% and 44.80% respectively.

In order to make growth more inclusive, the 11th Plan proposes to increase the agriculture sector growth rate to 4 per cent from 2.13 per cent in the 10th Plan. The growth targets for industry and services sectors have been pegged at 9 to 11 per cent. The industrial growth rate in the 10th Plan was 8.74 per cent, while the services sector grew by 9.28 per cent.


The other salient features of the draft of 11th Plan are-

1. The draft document has envisaged a savings rate of 34.8 per cent, which is substantially higher than 30.8 per cent recorded in the 10th Plan.

2. The investment rate has been proposed to be raised to 36.7 per cent from 30.8 per cent in the previous plan.

3. Important targets include reducing poverty by 10 percentage points, generating 7 crore new employment opportunities reduce unemployment among educated persons to less than 5% and ensuring electricity connection to all villages.

4. The major thrust of the Plan will be on social sector, including agriculture and rural development.

5. More stress on education with the draft proposing to increase the allocation to 19.36 per cent of the GBS from 7.68 per cent in the previous Plan. In absolute terms, the Central Government will be spending Rs 275000 crore on education during the 11th Plan as compared to Rs 62238 crore in the previous Plan.

6. More investment on infrastructure sector including irrigation, drinking water and sewage from 5 per cent of Gross Domestic Product (GDP) in 2005-06 to 9 per cent by 2011-