Planning Commission of India

Planning Commission of India was established in accordance with article 39 of the constitution which is a part of directive principles of state policy.

Rudimentary economic planning, deriving the sovereign authority of the state, first initiated in India in 1938 by Netaji Subhash Chandra Bose when he was the Congress president and drafted by Meghnad Saha.


After India gained independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India was established on 15 March 1950, with prime minister Jawaharlal Nehru as the chairman. The Planning Commission does not derive its creation from either the Constitution or statute, but is an arm of the Central/Union Government.

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. The Planning Commission was charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities. Jawaharlal Nehru was the first Chairman of the Planning Commission.

The first Five-year Plan was launched in 1951 and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan Conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year plan was started in 1969.

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.

For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.

With the prime minister as the ex officio Chairman, the committee has a nominated Deputy chairman, who is given the rank of a full Cabinet Minister. 

Cabinet Ministers with certain important portfolios act as ex officio members of the Commission, while the full-time members are experts of various fields like Economics, Industry, Science and General Administration.

Present ex officio members of the Commission, are Finance Minister, Agriculture Minister, Home Minister, Health Minister, Chemicals and Fertilisers Minister, Information Technology Minister, Law Minister, HRD Minister and Minister of State for Planning.

The Planning Commission's functions as outlined by the Government's 1950 resolution are following:
  • To make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting those are related resources which are found to be deficient in relation to the nation's requirement.
  • To formulate a plan for the most effective and balanced utilisation of country's resources.
  • To define the stages, on the basis of priority, in which the plan should be carried out and propose the allocation of resources for the due completion of each stage.
  • To indicate the factors that tend to retard economic development.
  • To determine the conditions which need to be established for the successful execution of the plan within the incumbent socio-political situation of the country.
  • To determine the nature of the machinery required for securing the successful implementation of each stage of the plan in all its aspects.
  • To appraise from time to time the progress achieved in the execution of each stage of the plan and also recommend the adjustments of policy and measures which are deemed important vis-a-vis a successful implementation of the plan.
  • To make necessary recommendations from time to time regarding those things which are deemed necessary for facilitating the execution of these functions. Such recommendations can be related to the prevailing economic conditions, current policies, measures or development programmes. They can even be given out in response to some specific problems referred to the commission by the central or the state governments.

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