Table of Contents
(Chapter – 4)
Economic Planning
Contents of Chapter
- Introduction
- Definition
- Origin and Expansion of Planning
- Types of Planning
What is Planning
- “the making of major economic decisions—what and how much is to be produced and to whom it is to be allocated by the conscious decision of a determinate authority, on the basis of a comprehensive survey of the economic system as a whole.” HD Dickinson
- “Planning, under a democratic system, may be defined as the technical coordination, by disinterested experts of consumption, production, investment, trade, and income distribution, in accordance with social objectives set by bodies representative of the nation. Such planning is not only to be considered from the point of view of economics, and raising of the standard of living, but must include cultural and spiritual values, and the human side of life.”
Introduction
- Comprehensive plans covers all major aspects of the economy by target setting,
- Partial plan sets targets for a part of the economy ex.. agriculture, PSU, service sector
- It is a process, which incorporates well defined goals, for the optimum utilisation of resources
- Used majorly in countries like India, along with China, USSR, France whereas USA, Canada, Mexico never went for planning
Origin of Planning
- Regional Planning – 1916 started in Tennessee Valley (USA)
- National Planning- Soviet (under gosplan) {The State Planning Committee}
Types of Planning
Imperative Planning – Targeted Planning
- State Control
- Command Economies
- No role for Markets
- It suitable for Planned Economies
Types of Planning
Indicative Planning
- Mixed Economies
- Monnet Plan (French 6 years Plan)
- Nationalization of core industries
- Japan also followed
- UK tried for a year
Santiago/New Consensus (1998)
- Indicative planning
- Marginal role of state in economy
- State will provide nutrition, healthcare, drinking water, education, social security, etc
Normative Approach of Planning
- Generally Planning is largely value-neutral
- Focus is on the economic aspects of development.
- Socio-cultural variables are taken care of.
- Only quantitative data matters
- Normative approach of planning is value-based.
- Planning remains according to the value system of the target population
Normative Approach of Planning
- The Economic Survey 2010–11 highlighted this need
- Programme/scheme run by the governments if not able to connect with the customs, traditions and ethos of the population, their will not be accepted by population
- Niti Aayog was established for this approach only to plan according to culture, ethos and sustenance
Examples
- Giving up subsidy culture
- Removing Social prejudices,
- Swach Bharat Mission
- Public Cleanliness
Chapter – 5
Planning in India
What is Planning
- For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth 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” PC, 2013
Contents of Chapter
- Introduction
- Background
- Major Objectives of Planning
- Planning Commission
- National Development Council
- Central Planning
The Visvesvaraya Plan
- Popular civil engineer and the ex-Dewan of the Mysore state, M. Visvesvaraya gave first blueprint of plan
- The planned Economy of India, published in 1934, outlined the broad contours of his plan proposal.
- Promoted democratic capitalism (similar to the USA) with emphasis on industrialisation
- Doubling National Income in a decade
The FICCI Proposal
- Federation of Indian Chambers of Commerce and Industry (FICCI), for a comprehensive plan for economic development covering the holistic economic activities
- Proposed a National Planning Commission’ to coordinate the whole process of planning
- Capitalist like Ranade, Naroji all got influenced by Keynesian Model
- Role of state in development
The Congress Plan
- An initiative of the INC president Subhash C. Bose
- that the National Planning Committee (NPC) was set up in October 1938 (chairmanship of Nehru)
- to work out for Holistic Development of Economy
- final report of the NPC could only be published in 1949
Area of Focus
- NPC planned
- (i) Post War Reconstruction Committee: Early in June 1941
- (ii) Consultative Committee of Economists:
- (iii) Planning and Development Department:
- (iv) Advisory Planning Board: In October 1946,
- The Board strongly recommended the creation of “a single, compact authoritative organisation … responsible directly to the Cabinet
- States opposed due highly centralized viewpoints
The Bombay Plan
- Prepared by India’s leading capitalists. Like plan Thakurdas, J.R.D. Tata, G.D. Birla, Lala Sri Ram, Kasturbhai Lalbhai, A.D. Shroff, Avdeshir Dalal and John Mathai.
- The Plan was published in 1944–45.
- Agri restructuring
- Basic Industries
- Role of State along in development and removing inequalities
The Gandhian Plan
- Sriman Narayan Agarwal
- Idea of Cottage Industries
- ‘decentralised economic structure’ for India with ‘self-contained villages’.
- As machinery, commercialisation and centralised state power were the curses of modern civilisation
The People’s Plan.
- Based on Marxist socialism
- Need of providing the people with the ‘basic necessities of life’.
- Agricultural and industrial sectors were equally highlighted by the plan.
- Later in mid 90’s 2000’s many govt adopted this plan
The Sarvodaya Plan
- Jayaprakash Narayan’s—the Sarvodaya Plan
- Inspired from Gandhi and Bhave.
- Narayan criticized state heavy centralised planning model
Some Area-wise Reports
- Planned development of India popular by the decade of the 1940s.
- We saw several reports by then
- Gadgil Report on Rural Credit
- Kheragat Report on Agricultural Development
- Krishnamachari Report on Agricultural Prices
- Saraiya Report on Cooperatives
- A series of reports on Irrigation (ground water, canal, etc.)
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