The Planning Commission and the Five Year Plans

The Planning Commission of India was set up in March 1950 by a resolution of the Union Cabinet -- it was not a constitutional body created by the Constitution, nor a statutory body created by an Act of Parliament, but an extra-constitutional advisory body. The Prime Minister served as its ex-officio Chairman, and it was assisted by a Deputy Chairman, full-time and part-time members, and a secretariat of economists and specialists. Its principal task was to assess the country's material, capital and human resources, and to formulate a plan for their most effective and balanced utilisation, fixing priorities and allocating resources among the Centre and the states through the Five Year Plan (FYP) mechanism.

India's Five Year Plans ran, with only a brief interruption around the mid-1960s (the 'Plan Holiday' years of annual plans between the Third and Fourth Plans), from the First Plan (1951-56) all the way to the Twelfth Plan (2012-17) -- twelve plans in all, each setting sectoral targets and allocations built on an assessment of the shortfalls and achievements of the plan before it.

A few landmark thrusts are worth noting without attaching precise figures that are easy to misremember: the First Plan (1951-56) gave priority to agriculture and irrigation, and to the resettlement of refugees after Partition. The Second Plan (1956-61) is remembered for adopting the Mahalanobis strategy, associated with the statistician P. C. Mahalanobis, which emphasised rapid industrialisation with priority to heavy and basic industries -- steel, machine-building, power -- on the reasoning that building up domestic capacity to produce capital goods would lay the foundation for long-run, self-sustained growth. From the Third Plan onward, and especially from the late 1960s, planning gave increasing weight to achieving self-sufficiency in food grains, which culminated in the Green Revolution -- the spread of high-yielding seed varieties, chemical fertilisers and expanded irrigation that transformed India's food-grain output. Plans through the 1980s and 1990s increasingly incorporated poverty-alleviation and employment-generation programmes alongside the traditional focus on infrastructure and industry. After the balance-of-payments crisis of 1991, India undertook sweeping liberalisation, privatisation and globalisation (LPG) reforms, and from that point on the Plans became progressively more indicative rather than directive, opening greater space for private investment, foreign capital and market-determined prices. The later plans -- the Tenth, Eleventh and Twelfth -- placed grow …