Introduction

The Meaning of Planning

You already use the word "planning" in everyday life — when you plan for an exam or a trip, you think ahead, draw up a scheme, and then act on it. In this chapter, the term is used in the context of economic development. Planning here is a deliberate, systematic process of thinking, formulating programmes, and implementing actions to achieve specific economic goals. It is the opposite of the old "hit-and-miss" methods where outcomes were left to chance.

Two Approaches to Planning

Generally, planning takes two broad approaches:

• Sectoral Planning – This means formulating and implementing schemes aimed at developing specific sectors of the economy. Examples include agriculture, irrigation, manufacturing, power, construction, transport, communication, social infrastructure, and services. Each sector gets its own set of programmes.

• Regional Planning – No country experiences uniform economic development across all its regions. Some areas are more developed, others lag behind. This uneven pattern forces planners to adopt a spatial perspective — they draw plans specifically to reduce regional imbalances. That is regional planning.

Evolution of Planning in India

After Independence, India adopted centralised planning. Over time, this graduated into decentralised multi-level planning. Initially, the Planning Commission at the Centre was responsible for plan formulation at the national, state, and district levels.

However, on 1 January 2015, the Planning Commission was replaced by the NITI Aayog. The new body was set up with the objective of involving states in economic policy making. NITI Aayog provides strategic and technical advice to both the Central and state governments.