4.2 ndian onom
and income distribution, in accordance with
IntroductIon social objectives set by bodies representative of the
In order not to limit the discussion on economic nation. Such planning is not only to be considered
planning to just an academic exercise, we need to from the point of view of economics, and raising
discuss it taking real life examples from different of the standard of living, but must include cultural
economies. Without a historical background to and spiritual values, and the human side of life.”1
planning, we would not be able to understand the By the late 1930s, there was an almost
meaning and role of planning in India. This small political consensus that independent India will
chapter intends to introduce the reader to all the be a planned economy. As India commenced
whats, hows and whys of the concept of economic economic planning by the early 1950s, the
planning with due recourse to the experiments by planning commission of India also went on to
different countries from time to time, including define planning. According to the Planning
India. It could also be considered a theoretical Commission, “Planning involves the acceptance
backgrounder for the next chapter, Planning in of a clearly defined system of objectives in terms
India. of which to frame overall policies. It also involves
the formation of a strategy for promoting the
defInItIon realisation of ends defined. Planning is essentially
an attempt at working out a rational solution of
A number of definitions have been forwarded by problems, an attempt to coordinate means and
different economists from time to time since the ends; it is thus different from the traditional
term ‘planning’ entered the domain of economics. hit-and-miss methods by which reforms and
To make us develop a clear understanding of reconstruction are often undertaken”.2
planning, we need to see only a few of them which In the post-War period, a large number of
will enable us to draw out a working definition the newly independent countries were attracted
that fits contemporary time. towards planning. Many new forces of change
A large number of economists and experts kept refining the very idea of planning due to the
have agreed that perhaps the best definition is compulsive necessities of industrialisation or the
given by H. D. Dickinson, according to whom, issue of sustainability of the development process.
economic planning is, “the making of major But to carry forward our discussion, we need a
economic decisions—what and how much is to working as well as a contemporary definition
be produced and to whom it is to be allocated by of planning. We may define it as a process of
the conscious decision of a determinate authority, realising well-defined goals by optimum utilisation
on the basis of a comprehensive survey of the of the available resources.3 While doing economic
economic system as a whole.” planning the government sets developmental
It was the National Planning Committee, objectives and attempts to deliberately coordinate
set up in 1938 by the Indian National Congress
1. S. R. Maheshwari, A Dictionary of Public
which, for the first time, tried to define planning Administration, orient longman, New Delhi, 2002,
(in 1940, though, its final report was published in p. 371.
1949) in India. It could be considered the broadest 2. Planning Commission, First Five Year Plan (1951–56),
possible definition of planning: “Planning, under Government of India, New Delhi, 1991, p. 7.
a democratic system, may be defined as the 3. After the emergence of the concept of Sustainable
Development (1987) experts across the world started
technical coordination, by disinterested experts using the term ‘optimum’ in place of the hitherto used
of consumption, production, investment, trade, term ‘maximum’.