Planning Commission of India (For UPSC exams)

The Planning Commission was established in March 1950 by the Government of India by a Cabinet resolution, with Prime Minister Jawaharlal Nehru as the chairman. It was set up for the plan formation, resource aspects, implementation, and review on a technical basis.

Facts to Know Our Planning Commission

Important facts about the Commission are given below:

  • The Planning Commission was an extra-constitutional i.e. non-constitutional and non-statutory body.
  • It was an advisory body to the government of India for economic development.
  • Planning Commission was a “think tank” on economic development and its ex-officio chairman was Prime Minister, with a provision of a Deputy Chairman. The Deputy Chairman was authorized to coordinate the work of the Commission.
  • Planning Commission had an open provision for the number of its members, other than six Union Cabinet Ministers as its ex-officio members and a member secretary.
  • It was an autonomous body entitled to form its own views on important issues and place them before the governments.
  • The planning commission was constantly consulted on changes proposed in social and economic policies.
  • It was linked with the Union Cabinet at the secretariat level. The Commission was part of the Cabinet organization and the ‘demand for grants’ for it was included in the budget demand for the Cabinet Secretariat.
  • The Planning Commission was a technical body consisted experts and professionals coming from specific areas as per the needs of the Commission.
  • The Planning Commission had executive powers.
Members of the Planning Commission:

The planning commission had a provision for the number of its members other than six ex-officio members.

  • Chairman – The Prime Minister (ex-officio chairman)
  • Deputy Chairman – de facto executive head (full-time functional head, the main function was to coordinate the work of the Commission)
  • Ex-officio members – Finance Minister and Planning Minister

(There was a provision of only three Cabinet Misters as its ex-officio members namely the Finance, Human Resources Development, and Defence up to July 2004, after that the United Progressive Alliance increased it to include other three Cabinet Ministers viz., the Railways, Agriculture, and Information Technology. It has been only once in the history of the Commission that it had six ex-officio members i.e., in the final years of the Rajeev Gandhi regime).

Functions of the Planning Commission:

The functions of the Planning Commission were extended to include time-to-time changes in the planning needs. Though its outlined functions were announced by the government in 1950 during the time of resolution setting up.

The outlined functions of the Planning Commission were:

  1. To make an assessment of the material, capital, and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of those resources as are found to be deficient in relation to the nation’s requirements;
  2. To formulate a plan for the most effective and balanced utilization of the country’s resources.
  3. To define the stages on the basis of priorities, in which the plan should be carried out and propose the allocation of resources for the due completion of each stage;
  4. To indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation, should be established for the successful execution of the plan.
  5. To determine the nature of the machinery required for securing the successful implementation of each stage of the plan in all its aspects.
  6. To appraise from time to time progress achieved in the execution of each stage of the plan and also recommend the adjustment of policy and measures that such appraisal may show to be necessary;
  7. To make necessary recommendations as appear to be appropriate either for facilitating the discharge of the duties assigned to it. Such recommendations can be related to the prevailing economic conditions, current policies, measures, or development programs; or an examination of such specific problem as may be referred to it for advice by Central or State Governments.
Other functions:

The government handed over two new functions to the Commission with the commencement of the 10th plan (2002-07), these are:

  1. To monitor the plan implementation with special reference to the process of ‘economic reforms with the help of the steering committees.
  2. To monitor the progress of various Central Ministers, it should be noted here that for the first time, the Planning Commission went to set the ‘monitorable targets’ for ten areas including development.
Dissolution of Planning Commission:

Prime Minister Narendra Modi announced the dissolution of the Planning Commission in his Independence Day speech of 2014. It was replaced by NITI Aayog.

The Government formally abolished the Planning Commission on January 1, 2015, by replacing it with a new body NITI Aayog. The Independent Evaluation Office (IEO) submitted a report to PMO in June 2014.

According to the IEO report the Planning Commission was created in response to the unique challenges faced by a nascent democracy and a fledgling economy, it conceived a ‘top-down approach to planning that envisaged a dynamic Central government building up the economic and social order of weak states.

  • The report of the Independent Evaluation Office called the Planning Commission in its current form and function a hindrance and not a help to the development of India.
  • The report further added that it is not easy to reform such a large ossified body and it would be better to replace it with a new body that is needed to assist states in ideas, to provide long-term thinking, and to help cross-cutting reforms.



Ramesh Singh India Economy

You can also read: 💡

National Income

Santiago Consensus

Beijing Consensus

Agricultural systems in the world: A brief introduction of agricultural systems

Economics: A Brief Introduction of Economic Systems and Sectors in Economy

Washington Consensus

Thank you 🙂

Spread Your Love

1 Comment

NITI Aayog (National Institution for Transforming India) Economics · November 14, 2022 at 1:00 am

[…] Government abolished Planning Commission and replaced it with a new body “NITI Aayog” it was established on 1 January 2015 by NDA […]

  • Leave a Reply