Indian Economy Quiz: Planning in India and NITI Aayog

The Planning Commission was constituted on 15 March 1950 by a resolution of the Union Cabinet, with the Prime Minister as its chairman, and it drafted every Five Year Plan until it was replaced in 2015.

On that date a cabinet resolution created the National Institution for Transforming India in place of the Planning Commission, keeping the Prime Minister as the head of the new body but changing its work from allocating funds to advising governments.

The statistician who founded the Indian Statistical Institute gave the Second Plan its framework, in which investment was directed towards heavy and basic industries such as steel, machinery and power on the argument that they would build the capacity to produce everything else.

The plan of 1961 to 1966 was overwhelmed by the war with China in 1962, the war with Pakistan in 1965 and a severe drought, so instead of a new five year plan the government ran three annual plans from 1966 to 1969, a stretch called the plan holiday.

Running from 1974 to 1979, it took the removal of poverty and the attainment of self-reliance as its twin objectives, and it is remembered by the slogan Garibi Hatao.

The office of Prime Minister carries the chairmanship of NITI Aayog, exactly as it carried the chairmanship of the Planning Commission before 2015 and as it carries the chairmanship of the Governing Council and of the National Development Council.

The Governing Council brings together the Prime Minister, the chief ministers of all the states, the chief ministers of union territories that have legislatures and the lieutenant governors of the remaining union territories, so that the Union and the states can settle priorities in one room.

The engineer and statesman set out a ten year programme to move labour from agriculture into industry, and his book of 1934 is treated as the first systematic proposal for planning in India.

The National Development Council was set up on 6 August 1952 by an executive resolution so that the states could take part in national planning; chaired by the Prime Minister, it included the chief ministers and the members of the Planning Commission, and it gave a plan its final approval…

It ran from 2012 to 2017 with the aim of faster, more inclusive and sustainable growth, and when it ended no thirteenth plan followed, because NITI Aayog had replaced the Planning Commission and put a long-term vision with a shorter action agenda in place of five year plans.

The mission promotes a culture of innovation and enterprise, chiefly through tinkering laboratories in schools and incubation centres in colleges and institutions, and it is run under NITI Aayog as part of its role as the government think tank.

NITI Aayog advises the Union and the state governments, prepares strategy, monitors programmes and acts as a forum for the states, but no money passes through it; that is the sharpest difference from the Planning Commission it replaced.