IAS Preparation Strategy – Economy: Economic Planning in India

The UPSC Examination for Civil Services of India is conducted in three stages. The first stage is the Prelims Exam consisting of two papers with objective type questions. The second stage of the IAS exam is the Mains Exam consisting of nine papers conducted over a period of five days. The final stage is the UPSC Interview. The UPSC Syllabus for this exam is vast and comprehensive in its coverage of various subjects.

The largest portion of the IAS syllabus is taken up by General Studies. In this article, we will discuss Economic Planning in India, a very important topic in the General Studies for both Prelims and Mains GS Paper III. This article would cover Objectives and History of Planning in India, topics related to the erstwhile Five Year Plans and the Planning Commission as well as its successor the NITI Aayog. We will also discuss how to prepare for this paper for UPSC 2019.

Objectives of Economic Planning in India

The following were the original objectives of economic planning in India:

  • Economic Development: This is the main objective of planning in India. Economic Development of India is measured by the increase in Gross Domestic Product (GDP) and Per Capita Income
  • Increased Levels of Employment: An important aim of economic planning in India is to better utilise the available human resources of the country by increasing the employment levels.
  • Self Sufficiency: India aims to be self-sufficient in major commodities and also increase exports through economic planning. The Indian economy had reached the take off stage of development during the third five year plan in 1961-66.
  • Economic Stability: Economic planning in India also aims at stable market conditions in addition to economic growth of India. This means keeping inflation low while also making sure that deflation in prices does not happen. If the wholesale price index rises very high or very low, structural defects in the economy are created and economic planning aims to avoid this.
  • Social Welfare and Provision of Efficient Social Services: The objectives of all the five year plans as well as plans suggested by the NITI Aayog aim to increase labour welfare, social welfare for all sections of the society. Development of social services in India, such as education, healthcare and emergency services have been part of planning in India.
  • Regional Development: Economic planning in India aims to reduce regional disparities in development. For example, some states like Punjab, Haryana, Gujarat, Maharashtra and Tamil Nadu are relatively well developed economically while states like Uttar Pradesh, Bihar, Orissa, Assam and Nagaland are economically backward. Others like Karnataka and Andhra Pradesh have uneven development with world class economic centres in cities and a relatively less developed hinterland. Planning in India aims to study these disparities and suggest strategies to reduce them.
  • Comprehensive and Sustainable Development: Development of all economic sectors such as agriculture, industry and services is one of the major objectives of economic planning.
  • Reduction in Economic Inequality: Measures to reduce inequality through progressive taxation, employment generation and reservation of jobs has been a central objective of Indian economic planning since independence.
  • Social Justice: This objective of planning is related to all the other objectives and has been a central focus of planning in India. It aims to reduce the population of people living below the poverty line and provide them access to employment and social services.
  • Increased Standard of Living: Increasing the standard of living by increasing the per capita income and equal distribution of income is one of the main aims of India’s economic planning.

History of Economic Planning In India

Economic planning in India dates back to pre- Independence period when leaders of the freedom movement and prominent industrialists and academics got together to discuss the future of India after Independence which was soon to come. Noted civil engineer and administrator M. Visvesvaraya is regarded as a pioneer of economic planning in India. His book “Planned Economy for India” published in 1934 suggested a ten year plan, with an outlay of Rs. 1000 crore and a planned increase of 600% in industrial output per annum based on economic conditions of the time.

The Industrial Policy Statement published just after independence in 1948 recommended setting up of a Planning Commission and following a mixed economic model. Here are the major milestones related to economic planning in India:

  • Setting up of the Planning Commission: 15 March 1950
  • First Five Year Plan: 1 April 1950
  • Dissolution of the Planning Commission: 13 August 2014
  • Setting up of NITI (National Institution for Transforming India) Aayog: 1 January 2015

Setting up the NITI Aayog was a major step away from the command economy structure adopted by India till 1991. The Planning Commission’s top down model of development had become redundant due to present economic conditions and NITI Aayog approaches economic planning in a consultative manner with input from various state governments and think tanks.

While preparing for the UPSC Exam, Economic Planning should be approached in a systematic manner. The major achievements of economic planning in India remain an important part of the UPSC Syllabus. The strategy of economic planning in India under the Planning Commission as well the NITI Aayog are important as well. As a rule, IAS aspirants should focus on:

  • Objectives of Economic Planning In India
  • Major Achievements of Economic Planning in India
  • The Planning Commission and Five Year Plans
  • NITI Aayog Action Agenda and Annual Reports
  • Sustainable Development Goals
  • Economic Reforms in India and Various Government Programmes
  • Current Affairs related to all of the topics mentioned above

Solving previous year’s UPSC Question Papers is a good way to revise preparation done for this topic as Indian Economy and issues relating to planning is a permanent fixture of Mains General Studies Paper III. UPSC 2019 may also draw on some aspects of planning done by state governments.

To practice Indian Economy for UPSC Prelims, please check out:

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