Indian Economy For UPSC CSE Chapter-5 (Part-2)

Chapter – 5
Planning in India

Objectives of Planning

Economic Growth
Poverty alleviation
Employment Generation
Controlling Economic Inequality
Self Reliance
Modernisation

Planning Commission

Extra-constitutional & Non-statutory
Advisory body
Autonomous body
Technocratic organization

Functions were

Asses Resources
Plan formulation
Plan Review

Independent Evaluation Office Report for PC

Top Down
Centralized
Replace with Reform and Solutions Commission

Reform and Solutions Commission Functions

Exchange of Ideas b/w various stakeholders
Integrate Institutions
Identify New Challenges

National Development Council

The National Development Council (NDC) (1952)
by a Resolution of the Cabinet Secretariat to promote
A Model of Federalism
Co-operative Federalism
Model of Decentralized Planning

Central Planning

Five Year Plan
Twenty Point Program
MPLADS

12^TH FYP

The broad vision and aspirations which the Twelfth Plan seeks to fulfil are reflected in the subtitle: ‘Faster, Sustainable, and More Inclusive Growth’.
Inclusiveness is to be achieved through poverty reduction, promoting group equality and regional balance, reducing inequality, empowering people etc
Sustainability includes ensuring environmental sustainability,
Development of human capital through improved health, education, skill development, nutrition, information technology etc and
Development of institutional capabilities , infrastructure like power telecommunication, roads, transport etc

20 Point Program

Launched in 1975
Improving quality of life especially poor
Education
Housing
Family welfare
Health
TPP 86, TPP2006,

MPLADS

The MPLAD was launched on December 23, 1993.
The Ministry of Rural Development initially controlled the scheme, but it was later shifted to MOSPI.
It is a centrally- sponsored scheme fully funded by the Centre.
In the past, MPs have been allowed to allocate money from MPLADS for the super cyclone in Odisha (1999);
Gujarat earthquake (2001); tsunami (200); floods in Kosi river in Bihar (2008) ;
Cyclone ‘alia’ in West Bengal (2009); cloudbursts, flood and landslide in Uttrakhand (2013);
Flood in Jammu & Kashmir (2014); and cyclone ‘Hudhud’ in Andhra Pradesh (2014).

2014 Revised Guidelines

New permissible list
Focus on Village-Rural Development

MULTI-LEVEL PLANNING

First Strata: Centre-Level Planning
Second Strata: State-Level Planning
Third Strata: District-Level Planning
Fourth Strata: Block-Level Planning
Fifth Strata: Local Level Planning

A CRITICAL EVALUATION

Lack of ‘Perspective’ in Planning
Failure in Promoting a Balanced Growth and Development
Highly Centralised Nature of Planning
Lop-sided Employment Strategy
Excessive Emphasis on PSUs
Agriculture Overshadowed by the Industry
Faulty Industrial Location Policy
Wrong Financial Strategy
Politicisation of the Planning Process

INCLUSIVE GROWTH

Inclusive growth is a growth process which yields broad-based benefits and ensures equality of opportunity for all (UNDP and the 11th Plan)
10^th, 11^th , 12^th Plan were inclusive in nature

Policy Making

Short Term (Several Central Sector and Sponsored Schemes)
Long Term ( Skill Development, Education)

Investment Model

Phase-I (1951—69) : State Led
Phase-II (1970—73) : Joint Sector
Phase-III (1974–90): Foreign Investment & Tech Transfer
Phase-IV (1991 onward)

1991-Till Date

PPP Model
- VGF Model
- BOT (Build-Opetare-Transfer)
- BOO (Build-Own-Operate)
- BOOT (Build-Own-Operate-Transfer)
- BLT (Build-Lease-Transfer)
- BOLT (Build Operate- Lease-Transfer)
- DBFO (Design-Build-Finance-Operate)
- DBOT (Design-Build-Operate-Transfer)
- DCMF (Design-Construct-Manage-Finance);
- GOCO

Development Monitoring And Evaluation Office

TheDevelopment Monitoring and Evaluation Office (DMEO) was constituted in September 2015 by merging the erstwhile Program Evaluation Office (PEO) and the Independent Evaluation Office (IEO).
It is an attached office under NITI Aayog, aimed at fulfilling the organization’s monitoring and evaluation (M&E) mandate and building the M&E ecosystem in India.
To help improve the effectiveness of government policies and programmes by assessing their impact and outcomes.
To set guidelines and methodology for all evaluations done by various departments, and agencies and encourage a culture of openness and learning in government systems.
To connect India to the best international evaluated evidence in development practice and knowledge to learn from others success and mistakes.

The objectives of DMEO are:

To enable data-driven policy making;
to enable a culture of deep learning from regular self-evaluation in all the tiers of the government;
To institutionalize rigorous tracking of performance metrics and comprehensive program evaluations;
To strengthen the whole ecosystem to mainstream rigorous outcome monitoring and evaluation;
To introduce and expand use of cutting edge technologies and data analytical tools for real time monitoring of government programs;
To provide data and tools to drive effectiveness and efficiency of government programs; and
To help identify weaknesses and bottlenecks for necessary course correction.

NITI Aayog

Objectives And Features

To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of States.
To foster cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis, recognizing that strong States make a strong nation.
To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.
To ensure, on areas that are specifically referred to it, that the interests of national security are incorporated in economic strategy and policy.
To pay special attention to the sections of our society that may be at risk of not benefiting adequately from economic progress.
To design strategic and long term policy and programme frameworks and initiatives, and monitor their progress and their efficacy.
To provide advice and encourage partnerships between key stakeholders and national and international like-minded Think tanks, as well as educational and policy research institutions.
To create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and other partners.
To offer a platform for resolution of inter-sectoral and inter departmental issues in order to accelerate the implementation of the development agenda.
To maintain a state-of-the-art Resource Centre, be a repository of research on good governance and best practices in sustainable and equitable development as well as help their dissemination to stake-holders.
To actively monitor and evaluate the implementation of programmes and initiatives, including the identification of the needed resources so as to strengthen the probability of success and scope of delivery.
To focus on technology upgradation and capacity building for implementation of programmes and initiatives.
To undertake other activities as may be necessary in order to further the execution of the national development agenda, and the objectives mentioned above.

Features

NITI Aayog is developing itself as a State-of-the-art Resource Centre, with the necessary resources, knowledge and skills, that will enable it to act with speed, promote research and innovation, provide strategic policy vision for the government, and deal with contingent issues.
NITI Aayog’s entire gamut of activities can be divided into four main heads:
- Design Policy & Programme Framework
- Foster Cooperative Federalism
- Monitoring & Evaluation
- Think Tank and Knowledge & Innovation Hub

Niti Aayog over PC

Demographic Shift
Economic Shift
Increase in Private Sector
Forces of Globalization
Role of State
Changing Technologies

Functions

Cooperative and Competitive Federalism : Conflict Resolution
Shared National Agenda
Centre State Relations: Plan, Monitor, Review
Decentarlized Planning
Technocratic Organisation

Central Sector Scheme & Centrally Sponsored Scheme

The Central Sector Schemes are 100 per cent funded by the Union Government and implemented by the Central Government machinery.
These schemes are mainly formulated on subjects from the Union List. In addition, the Central ministries also implement some schemes directly in the states/UTs, which are called
Central Sector Schemes, but resources under these schemes are not generally transferred to states.

Restructuring of Centrally Sponsored Schemes

K. Chaturvedi Committee
137 CSSs were restructured into 66 schemes, including the 17 flagship programmes
14th FC recommended that sector-specific transfers from the Union to the states/Uts should be confined to sectors like education, health, drinking water and sanitation.
The CSSs have been divided into — Core and Optional schemes. sharing pattern for the Core Schemes is—for 8 North Eastern (NE) states and 3 Himalayan states 90:10; for other States 60:40 (Centre: States) and for Uts 100 per cent to be borne by the Centre.
For Optional Schemes sharing pattern is—for 8 NE and 3 Himalayan states 80:20; for other states 50:50 (Centre: States) and for the UTs 100 per cent to be borne by the Centre.
Amongst the Core Schemes, those for social protection and social inclusion should form the Core of the Core and be the first charge on available funds for the National Development Agenda.
Funds for Optional Schemes would be allocated to the states by the Ministry of Finance as a lump sum, and states would be free to choose which Optional Schemes they wish to implement.
In such schemes, states have been given the flexibility of portability of funds to any other CSSs.

Core of the Core Schemes

National Social Assistance Program
Mahatma Gandhi National Rural Employment Guarantee Program
Umbrella Scheme for Development of Scheduled Castes
Umbrella Programme for Development of Scheduled Tribes
Umbrella Programme for Development of Minorities
Umbrella Programme for Development of Other Vulnerable Groups

Q1. With regard to the Imperative Planning, consider the following statements

It is the planning process followed by the state economies
The socialist or communist economies are part of it
Under such planning framework, the economies planning works through the market price system

Select the CORRECT statement(s) using the codes given below

1 Only
1 and 2
2 and 3
1, 2 and 3

Ans: 2

Statements 1 and 2 are correct.
Statement 3: It is a feature of Indicative Planning.
During the course of evolution, planning has been classified into two types: Imperative and Indicative Planning.
The planning process followed by the state economies (i.e., the socialist or communist) is known as the imperative planning.

It is also called as directive or target planning.

Features:
Numerical (i.e., quantitative) targets of growth and development
The state controls the ownership rights over the resources
No role for the market
No private participation in the economy

Q2. The practices like ‘Persuading the rich to give up subsidies they do not need’ are under which of the following planning approaches?

System Planning
De-centralised Planning
Regional Planning
Normative Planning

Ans: 4

The normative planning is a concept which gives due importance to the socio-institutional factors.
This is a planning from social-technical point of view, but only suitable for a country which has lesser degree of social diversities.
The Economic Survey 2010–11 advocated for the need of normative approach to planning in India.
Functions and guiding principles of the NITI Aayog indicates that India has officially moved towards normative planning.

Q3. Which of the following pairs regard to the planning in India is matched INCORRECTLY?

The Gandhian Plan – Sriman Narayan Agarwal
The People’s Plan – M.N. Roy
Sarvodaya Plan – Mahatma Gandhi
The Bombay Plan – Capitalists of India

Ans: 3

Sarvodaya Plan, 1950: It was was formulated by the famous socialist leader Jayaprakash Narayan.
The plan drew its major inspirations from the Gandhian techniques of constructive works by the community and trusteeship as well as the Sarvodaya concept of Acharya Vinoba Bave, the eminent Gandhian constructive worker.

Q4 Consider the following statements

Doubling per capita income in 10 years
‘Governance’ was considered a factor of development
States’ role in planning to be increased with the greater involvement of the PRIs

Above are the provisions of which of the following Five Year Plan?

4^th FYP
7^th FVY
10^th FYP
12^th FYP

Ans: 3
Explanation:

These are the provisions of 10^th
The Plan (2002–07) commenced with the objectives of greater participation of the NDC in their formulation.
Agriculture sector declared as the prime moving force (PMF) of the economy under this plan.
For the first time the Plan went to set the ‘monitorable tragets’ for eleven select indicators of development for the Centre as well as for the states.

Q5. Consider the following statements with regard to the objectives of 12^th Five Year Plan

It targeted Real GDP growth at 8%
Poverty rate to be reduced by 10% than the rate at the end of 11th plan
It aimed to end the gender gap and social gap in school enrolment

Select the CORRECT statements using the codes given below

1 and 2
2 and 3
1 and 3
1, 2 and 3

All statements are correct.

Other important objectives of 12^th FYP:
Agriculture growth at 4%.
Manufacturing growth at 10%.
Every state must attain higher growth rate than the rate achieved during 11th plan.
Mean years of schooling to increase to 7 years.
Reduce : IMR to 25; MMR to 1. Increase Child Sex Ratio to 950.
Reduce Total Fertility Rate to 2.1
Investment in Infrastructure at 9% of GDP