Indian Economy Quiz: Planning in India and NITI Aayog

The correct answer is B, 1950. 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.

Option A, 1947, is the year of Independence and of the partition, not of the commission. Option C, 1952, is the year the National Development Council was set up to associate the states with planning, and it is the commonest distractor in this question. Option D, 1956, is the year of the Industrial Policy Resolution and of the start of the Second Five Year Plan. Note also that the commission was created by an executive resolution and not by the Constitution or by an Act, which is itself asked as a separate statement.

The correct answer is A, 1 January 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.

Option B, 15 March, is the date on which the Planning Commission was set up, though in 1950, so the day is right for the wrong body. Option C, 1 April 2016, is a financial year date with no connection to the creation of the institution. Option D, 26 January 2015, is Republic Day and is offered only to confuse. The pair of years worth fixing is 1950 for the Planning Commission and 2015 for NITI Aayog, with 1952 for the National Development Council between them.

The correct answer is A, P. C. Mahalanobis. 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.

Option B, Harrod and Domar, gave the model behind the First Plan, which connects the rate of growth to saving and the capital output ratio. Option C, M. Visvesvaraya, wrote Planned Economy for India in 1934 and is the pioneer of the idea, but no plan is based on a model of his. Option D, V. K. R. V. Rao, is remembered for the first scientific estimate of national income in independent India. The First and Second Plan models are the single most repeated pair from this chapter.

The correct answer is B, the Third Plan. 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.

Option A, the Second Plan, ran its course from 1956 to 1961 and laid the base of heavy industry, despite a foreign exchange crisis. Option C, the Fourth Plan, is the one that began in 1969 after the holiday ended, so it is the result rather than the cause. Option D, the Fifth Plan, was ended a year early in 1978 by a new government and was followed by a rolling plan, which is a different break and a frequent source of confusion.

The correct answer is C, the Fifth Plan. 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. It was terminated a year ahead of schedule in 1978 and a rolling plan was introduced in its place.

Option A, the Third Plan, aimed at a self-reliant and self-generating economy and ended in the plan holiday. Option B, the Fourth Plan, is remembered for the phrase growth with stability and for the nationalisation of major banks in 1969. Option D, the Sixth Plan, continued the attack on poverty and began the move away from rigid controls, which is why it is offered here. Learning one phrase for each plan is the quickest way to clear this family of questions.

The correct answer is B, the Prime Minister of India. 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.

Option A, the President, is the constitutional head of the Union but has no role in this executive body. Option C, the Union Finance Minister, may serve as an ex officio member drawn from the Council of Ministers, but does not chair the institution. Option D, the Governor of the Reserve Bank, heads the central bank and its monetary work and is unconnected with NITI Aayog. Remember that the working head of the body is the vice-chairperson, while the administrative head is a chief executive officer of the rank of secretary.

The correct answer is A. 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.

Option B, the governors of states, is wrong because the council rests on elected heads of government, not on the constitutional heads of states. Option C, judges of the Supreme Court, belong to the judiciary and cannot sit on an executive policy body. Option D, the Finance Commission, is a separate constitutional body under Article 280 that recommends the sharing of taxes between the Union and the states. The composition of the Governing Council is the clearest proof of the cooperative federalism the institution claims to practise.

The correct answer is B, M. Visvesvaraya. 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.

Option A, M. N. Roy, drafted the People Plan of 1945 on socialist lines, with agriculture and consumer goods at its centre. Option C, Jayaprakash Narayan, gave the Sarvodaya Plan of 1950, which drew on Gandhian and Bhoodan ideas. Option D, S. N. Agarwal, gave the Gandhian Plan of 1944, based on villages and cottage industry. Along with the Bombay Plan of 1944, prepared by eight industrialists, these make a list of five proposals and four authors that examiners shuffle freely, so learn them together.

The correct answer is C, 1952. 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 before implementation.

Option A, 1950, is the year the Planning Commission itself was created. Option B, 1951, is the year the First Five Year Plan began. Option D, 1954, has no place in this sequence and is filler. Keep the three dates in order: the commission in 1950, the first plan in 1951 and the council in 1952. Note also that like the commission the council was never given constitutional or statutory status.

The correct answer is C, the Twelfth Plan. 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.

Option A, the Tenth Plan, ran from 2002 to 2007 and set the target of doubling per capita income within a decade. Option B, the Eleventh Plan, ran from 2007 to 2012 under the theme of faster and more inclusive growth, a phrase easily confused with the twelfth. Option D, a thirteenth plan, was never made. The similar wording of the last two plan themes is the trap here, so attach the word sustainable to the Twelfth Plan alone.

The correct answer is A, NITI Aayog. 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.

Option B, the Reserve Bank of India, is the central bank and deals with monetary policy, currency and the regulation of banks. Option C, the Finance Commission, is a constitutional body appointed every five years to recommend the distribution of taxes between the Union and the states. Option D, the Securities and Exchange Board of India, regulates the stock market and protects investors. NITI Aayog also publishes indices on health, school education, water management and the Sustainable Development Goals, and runs the Aspirational Districts Programme.

The correct answer is C. 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.

Option A describes the old Planning Commission, which approved state plans and released plan assistance, a power that gave it great leverage over the states. Option B is wrong because the institution was created by a cabinet resolution on 1 January 2015, so it is neither constitutional nor statutory. Option D is wrong because the Finance Commission is a constitutional body under Article 280 and continues to recommend the sharing of central taxes with the states; NITI Aayog replaced the Planning Commission alone. Statement questions from this chapter almost always turn on these two distinctions.