The genesis of economic planning in India can be traced back to 1931 – Essay


The genesis of economic planning in India can be traced back to 1931 when the Indian National Congress adopted in Karachi session of that year a resolution in “Nationalization of Key and Basic Industries”.

In 1937 the Congress appointed a National Planning Committee with Pt. Jawahar Lai Nehru as its chairman.

The Committee, laying down the objectives of planning in India, stated, “Planning under a democratic system may be defined as the technical co-ordination by disinterested experts of consumption, production, investment, trade and income distribution in accordance with special objectives set by bodies representative of the nation.


Such planning is not only to be considered from the point of view of economics and of raising the standard of living; but must include cultural and spiritual values and human side of life.” The Committee produced a number of reports, which were discussed in the Congress Sessions and in the national press.

The launching of the First Five Year Plan in 1951 was preceded by the trauma of grave instability and human destruction caused by India’s tragic partition. Inevitably, the First Plan had to concentrate on consolidation and stability of India’s economy while aiming at raising the living standards of the people.

The break from the colonial past had to be capitalised to bring about all-round process of development and put into motion the forces of change, which had been retarded by British imperialism.

Whereas the genesis of Planning in India goes much earlier than 1947, the tyranny of British imperialism did shape up the concept of political independence could be supplemented with economic independence.


Thus, the objective of planning process was to lead the country to a higher growth, modernisation, self-reliance, and social justice.

The first effort at introducing social planning in India was made by late Dr.M. Visveshwarayya. He underlined the desirability and feasibility of planning for industrialization of the country.

In 1944 the government established a planning and development board and published three plans-the Bombay Plan, the Gandhian Plan and the People’s Plan. Following the recommendations of the Advisory Planning Board of 1946, the Planning Commission was established by a cabinet resolution of March 15, 1950. The National Development Council was constituted in 1952.

India opted for socialism and planning for its growth process and naturally planning was given a prominent role in the development of the country.


But as can be seen from the experience of the planning process, it has not fulfilled the expectations of the people and the government was forced to opt for Indicative Planning at the turn of century for its revival.

Nevertheless, planning continues to play an important role in the development of the country, though there is a change in the direction.

The political framework

The planning process in India is to be broadly understood within the overall political framework. Article 1 of the Constitution clearly states that India is a Union of States. We have a unique system of federation with a manifest unitary character.


There is a clear demarcation of functions between these two levels. Through the 73rd and 74th Amendments to the Constitution, power has been devolved on the Panchayats and the local tiers of government, which reflects the political objective of giving “power to people”.

In the beginning, the activities of our national party produced no effect upon the foreign government of India. But the economic pressure during the War and the famous Atlantic Charter stirred the review of her pre-war policies, estimate the progress made during the last few decades, and in the light of such review, adopt broad lines of policy aimed at concerted development in all the spheres of economic and social activity.”

A Planning Department was set up at the Centre and a few Development Officers were also appointed. This Department produced some “Panel Reports” but nothing substantial came out of it. Meanwhile, the leading industrialists of India produced a plan, called the Bombay Plan. Lot of Planning talk was going on in the world press.

The Marshall Plan, the Master Plan and so many other ‘Plans’ were raising up to rebuild the shattered economy of the world. India also had become plan-minded.


With the advent of independence, planning became a live subject. The Fathers of our Constitution enjoined through the Directive Principles of State Policy upon all future governments to establish an economic and social order based on equality of opportunity, social justice, and the right to work and to adequate wages and the right to social security.

The Government of India established on March 15, 1950 a National Planning Commission in compliance with these provisions of the Constitution. The Commission was asked to:

(1) 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 requirements;

(2) Formulate a Plan for the most effective and balanced utilization of the country’s resources;

(3) 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;

(4) 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;

(5) Determine the nature of machinery, which will be necessary for securing the successful implementation of each stage of the Plan in all its aspects;

(6) Appraise from time to time the progress achieved in the execution of each stage of Plan and recommend the adjustments of policy and measures that such appraisal may show to be necessary; and

(7) 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 the pre­vailing economic conditions, current political measures and development programmes; or, on examination of such specific problems as may be referred to it for advice by Central or State Governments.

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