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Planning Commission

Last updated date: 23rd May 2024
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What is the Planning Commission?

The Planning Commission was established by a Resolution of the Government of India in March 1950. It was established to promote a rapid rise in the standard of living of people by efficiently exploiting the resources of the country, increasing production, and offering employment opportunities to all in the service of the community. The Planning Commission retains responsibility for making an evaluation of the entire resource of the country, increasing deficiency resources, formulating plans for the most effective and proportional utilization of resources, and examining priorities. Pandit Jawaharlal Nehru was the first chairman of the Indian Planning Commission.

What is the Planning Commission and Its Function?

The Planning Commission, as the name implies, is to plan. It is a citizen advisory commission that regulates within local government, acting as an advisory group to the municipal governing body on the issues and policies related to planning, regulations to use land, and community development. The Planning Commission acts as city planners and works to develop plans and implement policies that affect how their community manages changes in Growth and Development. The Planning Commission is established to perform the following functions:

  • To draw up a plan for the most effective and balanced utilization of country resources.

  • To represent the factors that aim to retard economic growth.

  • To define the stages on a priority basis, in which the plan should be executed, and put forward the allocation of resources for due completion of each stage.

  • To determine the nature of machinery required for procuring the successful implementation of each stage of the plan in all its aspects.

  • To make necessary recommendations timely regarding those things which are considered necessary for facilitating the execution of these functions. Such suggestions are related to prevailing economic conditions, current policies, measures, or development programs.

  • To assess the material, capital, and human resources of the country, including technical employees, and investigate the likelihood of intensifying those resources which are found to be deficient concerning the nation’s requirement.

When was the Planning Commission Established and Its History?

In March 1950, the Planning Commission was introduced by a Resolution of the Indian Government in favour of declared objectives of Government to speed up the gradual rise in the higher living standard of the people by efficiently exploiting the resources of the country, increasing production and offering opportunities to all for employment in the service of the community.

The first Five-year Plan was introduced in 1951 and two following five-year plans were drafted till 1965, when there was a smash due to the Indo-Pakistan Conflict. Two consecutive years of drought, currency devaluation, a general rise in prices, and soil erosion imbalanced the planning process, and the fourth Five-year plan was started in 1969 after three Annual Plans between 1966 and 1969.


The Eighth Plan could not be withdrawn in 1990 due to the rapidly changing political situation at the Centre and the years 1990-91 and 1991-92 were considered as Annual Plans. Finally, the Eighth Plan was initiated in 1992 after the initiation of structural adjustment policies.

The first eight plans emphasize the flourishing public sector with immense investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the focus on the public sector has become insignificant and the present thinking on planning in the country is that it should increasingly be of an expressive nature.

When was the Planning Commission Set Up and Its Composition?

The planning commission came into effect on March 15, 1950. The composition of the Planning Commission includes Chairman, Deputy Chairman, and six members. The Prime Minister is the chairman of the Planning Commission and the Deputy chairman is the full-time functional head of the Commission. All cases including Policy are considered by the Commission as a whole.

There is a close relationship between the Cabinet and Commission. The Chairman is the President of India itself. Other members of the Commission are also appointed when required to attend the meeting of the Cabinet and its Committee. Important issues arising in the Minister are generally discussed in the Commission before they are considered in the Cabinet. Hence, there is a continuous flow of ideas and recommendations passing through the Commission to the Union Government and vice versa.

When was the Planning Commission Established and How do It Represent?

The planning commission was established on March 15, 1950. The commission was appointed by the municipal governing body and represents the municipality at large. The Planning commissioners do not represent any specific person, business, or group within their municipality. The Planning Commission should make an effort to provide input and guidance that will positively affect the whole community and defend themselves from any actions where a conflict of interest could be assessed.

How do the Planning Commission Play a Significant Role in the Planning Process?

Planning Commission plays a significant role in the planning process in three important ways:

  1. The Planning Commission acts as an advisory board to the main governing body on all planning and development issues.

  2. The commission assures that the general plan is implemented by examining the development applications individually. 

  3. The Planning Commission functions as the decision-making body for making proposals.

What do Twelve Five Year Plan Aims For?

The Planning Commission formulated a twelve five-year plan from 1950 to 2014. The first and second plan aims at enhancing public resources for investment in the public sector. The third plan focused on increasing exports, and the fourth plan drafted at a crucial period of balance of payment crisis focused on the development of agriculture. The fifth plan aims to enhance allocations for social sector spending. The sixth and seventh were infrastructural plans focused on raising planning resources for infrastructure spending. The eight plans formulated in the middle of economic reforms achieved 6.7% growth. The ninth plan observed a sharp decline in economic growth to 2.4 percent. The tenth and eleventh plans implemented in the period between 2004-2014 observed an economic growth approach of above 9 percent.

Niti Aayog

Niti Aayog is known as the successor of the Planning Commission. It replaced the planning commission in 2015. It acts as the apex think tank of the Government of India in matters of public policy making. It promotes cooperative federalism and focuses on economic development. Where the Planning Commission used to follow a top down approach, it focuses on the bottom up approach. The full form of this body is "National Institution for Transforming India" and it is known as an extra constitutional body.

Did You Know?

  • The Planning Commission is an advisory body based on Article 39 of the constitution.

  • The Planning Commission was set up in 1950 as a non-constitutionally and advisory body.

  • The headquarters of the Indian Planning Commission is at Yojana Bhawan.

  • The format of the first five-year plan was assembled in 1951.

  • Sir M. Vishweshwaraiah is honored as the father of Indian Economic Planning.

  • The headquarters of the Indian Planning Commission is at Yojana Bhawan.


Therefore, the Planning Commission was an extra constitutional body established by the Government of India by passing a resolution. It used to follow the top down approach and laid down various five year plans and was replaced by the Niti Aayog in 2015 as an apex think tank. It means that the planning commission is no longer a body in the government administration.

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FAQs on Planning Commission

1. What did the Planning Commission perform?

The planning commission, an agency of the Government of India, was established in 1951 to look after the country’s economic and social development primarily through the formulation of five-year plans. The Planning commission is headed by the Prime Minister of India and includes a deputy chairman and several full-time members.

2. When was the Planning Commission established?

The Planning Commission came into effect in March 1950 by the resolution of the Indian Government with the Prime Minister as its chairman. The initial aim was to establish heavy industries through public investment as a means of attaining rapid industrialization. The function of the Planning Commission was to assess and allocate planned resources, formulate plans and programs for area development, determine implementation methodology, identify the limitation of resources and appraise & modify implementation.

3. Why did the Government of India replace the Planning Commission?

The Government of India established Niti Ayog to replace the Planning Commission, which was established in March 1950.  This step begins to better address the needs and aspirations of people. A significant gradual change, Niti Ayog acts as a standard platform of the Government of India to bring the States to act together in the national interest, hence enhancing cooperative federalism.

4. What is the primary objective of the Planning Commission?

The primary objective of the Planning Commission was to enhance the standard of living of the ordinary citizens of India by optimizing the use of available resources, production, and creating employment opportunities. Presently, Niti Ayog is responsible for periodic assessment of resources. 

5. What is the objective of planning in India?

  • To enhance employment opportunities.

  • To minimize inequalities of income and wealth.

  • To attain balanced regional development.

  • To streamline the country.

  • To enhance agriculture production.

  • To increase National income and Per Capita income.