Role of Planning Commission with reference to the First Five Year Plan

After India acquired autonomy in 1947, it essentially needed to modify its economy without any preparation. The heads of those times needed to pick the kind of economy India would be and furthermore frame the financial preparation also. This is where the long-term plan was conceived and this is how planning commission of India came into existence. In this article, we will go over the role of the planning commission in detail with reference to the first five-year plan.

In the post-autonomy time, the heads of the nation had a few problematic choices to take. One of them was, which sort of financial model could India follow? In those times there were two models followed by most nations on the planet – entrepreneur economy and communist economy.

Our most memorable Prime Minister Jawaharlal Nehru favored the communist model. However, in a vote-based system like India, an unadulterated communist economy can not prosper. Free enterprise was likewise not fit since the public authority needed to develop an economy and take care of the average person and his requirements. So as an answer our economy consolidated parts of both communism and free enterprise. It was concluded India would foster areas of strength for the general public, where the public area would deal with its residents. However, the public authority would likewise advance and support major areas of strength for an area for what’s to come. There would be no forbiddance on private property or abundance remembering our majority rules system.

Planning Commission of India

Five Year Plan

A monetary arrangement designates the assets of a country to satisfy the general and explicit objectives as arranged by the public authority for a predetermined period. In India, these plans are made for a very long time and henceforth are known as long-term plans. These long-term plans are at last a transient arrangement for a viewpoint plan. A point-of-view plan frames the drawn-out objectives of a country, spreading over twenty years.

In India, after the freedom, the public authority set up a Planning Commission in 1950. This commission would be answerable for outlining and carrying out the long-term plans of the country. They started their endeavors with the initial long-term plan in 1950.

First Five-Year Plan of India (1951-56)

In 1951, the First Five-Year Plan was implemented against the backdrop of Partition, with the country grappling with an inflow of refugees, acute food shortages, and rising inflation. It was largely concerned with the growth of agriculture and irrigation in the primary sector. It was drafted by economist K.N. Raj. First, a high level of savings, as larger savings allowed for more investment, and second, a low capital-output ratio, which allowed for more efficient investment and a faster growth rate. India needed to recuperate from the parcel and the disequilibrium in the economy because of the Second World War. The First Plan, thusly, had the targets of restoring outcasts, agrarian turn of events, and independence in food alongside controlling expansion. 

The plan called for a 2.1 percent growth rate in GDP for the fiscal year, but it actually grew at a rate of 3.6 percent. The initial long-term plan was introduced in the parliament by Prime Minister Jawaharlal Nehru in December 1951. This plan advanced the possibility of an independent shut economy and was created by Prof. P. C. Mahalanobis. The arrangement had vigorously acquired thoughts from USSR’s long-term plans created by Domar. Because of this, the initial long-term plan is additionally called Domar-Mahalanobis Model. It was an adjusted variant of the Harrod-Domar model with not many changes.

In this arrangement, the most elevated needs were given to the Agriculture, Irrigation, and Power Projects. All out plan financial plan of Rs. 2069 Crore was distributed to seven expansive regions: water system and energy (27.2 percent), agribusiness and local area advancement (17.4 percent), transport and interchanges (24%), industry (8.4 percent), social administrations (16.64 percent), land recovery (4.1 percent), and other (2.5 percent). The arrangement was accomplished because of a positive rainstorm and somewhat higher harvest yields.

In this arrangement, the most noteworthy need was given to the Agriculture, Irrigation, and Power Projects. A complete arrangement spending plan of Rs. 2069 Crore was assigned to seven wide regions: water system and energy (27.2 percent), horticulture and local area improvement (17.4 percent), transport and interchanges (24%), industry (8.4 percent), social administrations (16.64 percent), land restoration (4.1 percent), and other (2.5 percent). The arrangement was effective because of positive storms and generally higher harvest yields.

A Few Key Striking Marks of the First Five-Year Plan

1. Many water system projects including Bhakra Dam and Hirakud Dam were begun in the initial five-year plan.
2. At the finish of the arrangement time frame in 1956, five Indian Institutes of Technology (IITs) were begun as significant specialized institutions.
3. University Grant Commission was set up to deal with subsidizing and go to lengths to fortify advanced education in the country.

Objectives

• Boosting food production.
• To completely use available raw materials; (iii) To redress the economic imbalances caused by the Second World War (1939-45) and India’s division.
• To keep inflation under control.
• To construct economic overheads such as roads, trains, irrigation, electricity, and other such infrastructure.
• To minimize income and wealth disparities.

Basic Assessment of the First Five-Year Plan

India’s First Five-Year Plan was a courageous endeavor. In several disciplines, the success was outstanding, and in many cases, the plan’s objectives were exceeded.

1. Despite the fact that the objective for national income growth was only 11 percent, the actual rise was 18 percent, from Rs. 8850 crores to Rs. 10,480 crores by the conclusion of the first plan. Per capita, income increased by 11%.
2. Food output increased from 52.2 million tonnes in 1951-52 to 65.8 million tonnes in 1955-56, despite the fact that the plan’s goal was only 61.6 million tonnes. Cotton, jute, sugarcane, and oilseeds all came close to meeting their goals.
3. During the plan period, industrial production grew. Mill-made cloth and locomotive production exceeded expectations. During the plan, several new businesses were formed, including oil refining, shipbuilding, airplanes, and railways.
4. The number of children attending elementary schools increased by approximately 33% over the plan period. A total of Rs. 101 crores was spent on health services, with several hospitals and dispensaries being established.
5. The railway system was strengthened at this time. There were 380 miles of new lines added. 430 miles of lines that were demolished during WWII have been rebuilt. Highways were extended by 636 miles with 30 significant bridges while existing roads were improved by 4000 km.
6. There was no considerable inflationary pressure on the economy throughout the first plan period. Increased production, notably in the agriculture sector, was to blame. The pricing level at the end of the plan was 13% lower than it had been when it began.

Related Links

1. Planning For Development 
2. Major Failures of the National Planning Commission
3. Tricks to Remember the Five Years Plan In India
4. When was the Planning Commission set up?
5. Finance Commission Of India

FAQs on the Role of the Planning Commission

Q 1. What is the role of the Planning Commission in India?

Answer-

• Soon after independence, India faced the challenge of economic development and lifting a large population out of poverty.
• As a result, planning commision was required.
• The Planning Commission was tasked with developing and implementing appropriate policies for economic development.
• The Government of India established the Planning Commission in 1950.
• One of the primary goals was to establish a modern industrial and technological base for the country.
• To create more jobs and increase output, both the private sector and the government would play complementary and important roles, resulting in widespread support for a mixed economy.
• The Planning Commission was tasked with determining how to strike a balance between different states and regions, as well as which industries should be initiated by the market and which by the states.

Q 2. What was the role of the Planning Commission in India after independence?

Answer-

After independence, Nehru established the Planning Commission in 1950 to develop economic policies and create a welfare state.

Q 3. What is the practical objective of the initial five-year plan for India?

Answer-

The primary focal point of the initial five-year plan was the rural advancement of the country. Farming is as yet the foundation of the Indian economy regarding the business age.

Q 4. The absolute initial five-year plan of India depended on the model of?

Answer-

 The initial long-term plan depended on the Harrod-Domar model which is based on the consistent state growth rate.

 Q 5. When was the initial five-year plan for India began?

Answer-

The length of the initial five-year plan was from 1951 to 1956. This plan was fruitful and accomplished development pace of 3.6% which was more than its objective.