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11-DEC-2010 15:52

The Planning Commission was set up in 1950, as an advisory body, the Prime Minister being its ex-officio Chairman. The Planning Commission is concerned broadly with economic planning and organizing the planning, but not implementing it.


The chief objective of Planning was defined as initiating “a process of development which will raise living standards and open out to the people new opportunities for a richer and more varied life”. Another objectives of the commission was to stabilise the growth of population over a reasonable period, to ensure that the economy, becomes self reliant in years to come. Planning in India derives its objectives from Directive Principles of State Policy.


FUNCTIONS OF PLANNING COMMISSION:(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 utilisation 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.


Advantages of Economic Planning: (i) It is only through economic planning that a nation can hope to improve the living standards of its people and to use its resources to optimum capacity;

 (ii) Economic planning prevents lop-sided growth to national economy by selecting the most productive combination of projects and by judicious allocation of available resources;

(iii) it helps to correct and eliminate regional imbalances by focusing attention on the needs of backward areas;

(iv) it promotes co-ordination between the different sectors of the economy;

(v) it is the only reliable way in which the State can try to remove economic disparities and establish an egalitarian society free of social and political tensions;

(vi) it provides the people with the best criterion by which to judge the performance of their governments which, in a planned economy, have to work for achieving pre-determined targets and rates of growth.


Imperative and Indicative Planning: In case of imperative planning economic activities belong to public sector, while in the other type they belong to the private sector. It is believed that the Five-year Plans provide a long-term perspective to the economy in market-friendly fashion.


National Development Council: NDC helps in the implementation of the Plan and helps in the resources of the country being pooled together for uniform development of all regions. The National Development Council has as Members the Chief Ministers of all States as also Members of the Planning Commission. It is presided over by the Prime Minister of India as Chairman. It helps in working out common policies in the important spheres of the country’s economy and thus ensures balanced economic development of the country as a whole. The Five-year Plans are finally approved by the National Development Council.




(per cent per annum)

Sl.No. Plan Target Actual

1. First Plan (1951-56) 2.1 3.60

2. Second Plan (1956-61) 4.5 4.21

3. Third Plan (1961-66) 5.6 2.72

4. Fourth Plan (1969-74) 5.7 2.05

5. Fifth Plan (1974-79) 4.4 4.83

6. Sixth Plan (1980-85) 5.2 5.54

7. Seventh Plan (1985-90) 5.0 6.02

8. Eighth Plan (1992-97) 5.6 6.68

9. Ninth Plan (1997-2002) 6.5 5.5


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1 Comment

Rahul B,

Dear Sir/ Madam, Please tell, who finally approves the draft of the five year plan?? In the cabinet secretariat exam this was asked and in the answer key provided by SSC it is PRESIDENT while the last line of the planning commission article of on this blog clearly says its NATIONAL DEVELOPMENT COUNCIL. Plz help.... Regards RAHUL B

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