New Delhi: Set up by India’s first Prime Minister Jawaharlal Nehru, the Planning Commission brought 12 five-year plans and six annual plans involving fund outlays of over Rs 200 lakh crore in its nearly 65-year-history.
Bringing down curtains on it, the government on Thursday replaced the fabled Planning Commission (Yoyana Aayog) with a new body named NITI Aayog, or the National Institution for Transforming India.
The Plan Panel, as it was commonly known, was set up by a simple government resolution on March 15, 1950 and has withstood many political and economic upheavals.
Incidentally, the new body has also been set up through a Cabinet Resolution, which has invoked words of leaders like Mahatma Gandhi, B R Ambedkar, Swami Vivekanand and Deen Dayal Upadhyaya.
It was a decisive mandate for a change of government during a politically and economically supercharged 2014 that finally led to the epitaph being written for Plan Panel.
Prime Minister Narendra Modi announced in his first Independence Day speech on August 15, 2014 that the Commission would get a replacement.
The new institution, which would remain at its predecessor’s address, a few blocks away from the Parliament, would also have a CEO, while Prime Minister would be the Chairperson.
While it went through numerous operational makeovers over the years of its existence, ranging from being a simple planning body to a powerful ‘control-commission’ to a fiscal decentralisation instrument to an official think-tank, the voices had begun to grow louder for an overhaul even before the new government took charge in May 2014.
The defeat of the last UPA government, however, led to immediate resignation of the Commission’s Deputy Chairman, Montek Singh Ahluwalia, who was at the helm of affairs for a decade, and other members in the last week of May.
Subsequently, a consultation process was launched for suggestions on the structure and role of the new body.
It was suggested that instead of a “Control Commission”, the new body should play the role of a catalyst and provide a platform to the Centre, states and experts to discuss issues and come out with the best solutions.
Incidentally, Nehru himself is said to have faced resistance to the idea of setting up of the Planning Commission, but it went on to become a major platform for successive governments to formulate and push forward economic policies and other development plans.
The Commission was set up as part of the government’s declared objectives to promote a rapid rise in the standard of living of the people by efficient exploitation of resources, increasing production and offering employment opportunities.
It was charged with the responsibility of assessing all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.
The first Five Year Plan was launched in 1951 with total outlay of little over Rs 2,000 crore and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan Conflict.
Two successive years of drought, devaluation of currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year plan was started in 1969.
The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992.
During the first eight Plans, the emphasis was on a growing public sector with massive investments in basic and heavy industries.
However, since the launch of the 9th Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.