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IAS Exam Preparation Through Indian Economy Infographics (10)

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IAS Exam Preparation of Indian Economy Section via Infographics

You will be tested by UPSC on Questions relating to Indian Economy. Planning in India is a broad topic and is important from examination point of view.

Indian Economy for IAS Exam Preparation 2016

Topic – Planning in India

IAS Exam Preparation

The Indian economy has been premised on the concept of planning. This has been carried through Five-Year Plans, developed, executed, and monitored by the Planning Commission. With the Prime Minister as the ex-offico Chairman, the commission has a nominated Deputy Chairman, who holds the rank of a Cabinet Minister. Montek Singh Ahluwalia was the last Deputy Chairman of the Commission.

A Brief History of Planning in India

1938:‘National Planning Committee’ was established under the chairmanship of Jawahar Lal Nehru by the Indian National Congress. Its recommendations however, could not be implemented because of the beginning of the Second World War and changes in the Indian political situation.
1944: ‘Bombay Plan’ was presented by 8 leading industrialists of Bombay.
1944: ‘Gandhian Plan’ was given by Shriman Narayan Agarwal.
1945: ‘People’s Plan’ was given by M N Roy.
1950: ‘Sarvodaya Plan’ was given by J P Narayan. A few points of this plan were accepted by the Government.
1952: National Development council (NDC) made by Cabinet resolution.
2014: Planning Commission Shut Down
2015: Government notified the formation of Niti Aayog- National Institution for Transforming India.

Planning Commission of India

The Planning Commission was set – up on March 15, 1950 under the chairmanship of JL Nehru, by a resolution of Union Cabinet.
It is an extra – constitutional, non – statutory body. (i.e., No provision in Constitution for its formulation.)
It consists of Prime Minister as the ex – officio Chairman, one Deputy – Chairman appointed by the PM and some full time members.
The tenure of its members and deputy chairman is not fixed. There is no definite definition of its members also. They are appointed by the Government on its own discretion. The number of members can also change according to the wishes of the Government.

National Development Council of India

All the plans made by the Planning Commission have to be approved by National Development Council first. It was constituted to build co – operation between the States and the Planning Commission for economic planning.
It is an extra – constitutional and extra – legal body.
It was set – up on August 6, 1952, by a proposal of the Government. The PM is the ex – officio chairman of NDC. Other members are Union Cabinet Ministers, Chief Ministers and Finance Ministers of all States, Lt. Governors of Union Territories and Governors of Centrally – ruled States.

National Institute for Transforming India

The centre-to-state one-way flow of policy, that was the hallmark of the Planning Commission era, is now sought to be replaced by a genuine and continuing partnership of states.
The NITI Aayog will develop mechanisms to formulate credible plans to the village level and aggregate these progressively at higher levels of government.
The NITI Aayog will create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts.
The National institution for Transforming India will act as a catalyst for the development by a holistic approach.
NITI Aaayog is based on the 7 pillars of effective governance – (1) Pro-People (2) Pro-Activity (3) Participation (4) Empowering (5) Inclusion of all (6) Equality (7) Transparency.
In NITI Aayog, the state governments has an equal role in nation’s development process and NITI Aayog promises the principle of co-operative federalism.

Functional Comparison of Planning Commission and Niti Aayog

Planning commission	NITI Aayog
Design FYP-Five year plans	Design national agenda, and cooperative federalism.
Decide two “money” matters: How much money to give to each state for centrally sponsored schemes. How much money to give for each state’s own state-five-year-plans.	Mostly work as a “policy-formulation-hub”. The Press release is ‘silent’ on money/funding. so, most probably it’ll be left to finance ministry. Some experts believe Inter-state council will decide money allocation to states, then finance ministry will release the fund.
States/UT were represented in National Development Council. PC framed FYP=>went to Cabinet=>NDC approved FYP=>Tabled in parliament.	States/UT represented in Governing council. But no specific mention about whether they can approve/reject/amend Niti Aayog’s proposals?
One size fits all, top-down socialist planning by Armchair Nehruvian economists and IES cadre officers (Indian Economic Service).	Press release talks about participatory planning but how exactly will they do that? No specific details laid out. IES officers are rarely invited in Modi’s meetings. But given the entry of Free market economists and Technocrats, most probably it’ll be an ‘indicative planning + core planning’ i.e. after inputs of state governments, a broad outline with selected targets, limited subsidies and monitoring through ICT.