TNPSC Free Notes Economy In English

இந்தக் கட்டுரையில், TNPSC குரூப் 1, குரூப் 2, குரூப் 2A, குரூப் 4 மாநிலப் போட்டித் தேர்வுகளான TNUSRB, TRB, TET, TNEB போன்றவற்றுக்கான முறைகள் இலவசக் குறிப்புகளைப் பெறுவீர்கள்.தேர்வுக்கு தயாராவோர் இங்குள்ள பாடக்குறிப்புகளை படித்து பயன்பெற வாழ்த்துகிறோம்

Planning

Meaning
 Planning is a technique, a means to an end being the realization of certain pre-
determined and well-defined aims and objectives laid down by the central planning
authority.
 The end may be to achieve economic, social, political or military objectives.
Definitions
 Economic Planning is “collective control or suppression of private activities of
production and exchange”.

-Robbins

 “Economic Planning in the widest sense is the deliberate direction by persons in-charge
of large resources of economic activity towards chosen ends”.

-Dalton

Economic Planning in India
 Consists of economic decisions, schemes formed to meet certain pre-determined
economic objectives and a road map of directions to achieve specific goals within
specific period of time.
 The current thinking of economic planning is fairly new, somewhat rooted in Marxist
socialism.

 In the 20 th century, intellectuals, theorists, thinkers from Europe put forward the idea of
state involvement to stop capitalism and the inequality of society.
 The Soviet Union adopted economic planning for the first time in 1928 that enabled the
country to turn into an industrial superpower.
 The idea of economic planning was strengthened during the Great Depression in 1930s.
The outbreak of World War II also required adequate and suitable planning of economic
resources for effective management after the effects of post war economy.
 After Independence, in 1948, a declaration of industrial policy was announced. The
policy suggested the creation of a National Planning Commission and the elaboration of
the policy of a mixed economic system.
 On January 26, 1950, the Constitution came into force. In logical order, the Planning
Commission was created on March 15, 1950 and the plan era began on April 1, 1951
with the launch of the first five year plan (1951-56).
 The evolution of planning in India is stated below:
 Sir M. Vishveshwarya (1934): a prominent engineer and politician made his first
attempt in laying foundation for economic planning in India in 1934 through his
book, “Planned Economy of India”. It was a 10 year plan.
 Jawaharlal Nehru (1938): He set-up “National Planning Commission” by a
committee but due to the changes in the political era and Second World War, it did
not materialize.
 Bombay Plan (1940): The 8 leading industrialists of Bombay presented “Bombay
Plan”. It was a 15 Year Investment Plan.
 S. N Agarwal (1944) gave the “Gandhian Plan” focusing on the agricultural and rural
economy.
 M.N. Roy (1945) drafted ‘People’s Plan”. It was aiming at mechanization of
agricultural production and distribution by the state only.
 J.P. Narayan (1950) advocated, “Sarvodaya Plan” which was inspired by Gandhian
Plan and with the idea of Vinoba Bhave. It gave importance not only for agriculture
but encouraged small and cottage industries in the plan.
 After considering all the plans, in the same year Planning Commission was set up to
formulate Five Year Plan in India by Jawaharlal Nehru. He was the first Chairman of
Planning Commission, Government of India.
Planning Commission of India
 The Planning Commission of India was set up in March 1950 by a resolution of the
Government of India under the chairmanship of Pandit Jawaharlal Nehru – the first
Prime Minister of India, to prepare a plan for the “most effective and balanced
utilisation of the country’s resources”.

 The Planning Commission played an advisory role with regard to the formulation of the
plans. It was the duty of the Central government and State governments to implement
the planning programmes.
Functions of Planning Commission
 The Planning Commission had the function of assessing the resources of the nation so
that they could be developed for the future needs of the country. These included
material, capital and human resources.
 It was the primary duty of the Commission to prepare the plans so that these resources
could be used in an effective and balanced manner. The resources had to be allocated
among various sectors as per priorities and the stages of progress; and completion of
programmes was to be laid down to the Commission. The Commission had to identify
the conditions and issues that would be a hindrance for development.
 It had to examine the ways by which the plan could be effectively implemented in the
prevailing conditions of the nation. It also determined the stage by stage execution of
the plan.
 The planning process had to be assessed periodically so that the right strategies could
be used to implement the plans. In the process, the Planning Commission had the
function of advising the central and state governments with regard to the appropriate
strategies of planning.
 The Commission also had to analyse particular issues and advice on it to the
government. It was the role of the Commission to determine the rate of growth of the
economy specifying the targets of the plan period for every sector.

Composition and Organisation
 The Planning Commission consisted of the Prime Minister and four full time members
and a few part time members who were of cabinet rank.
 The full-time members were persons who have excelled in the technical field, economy
and administration.
 The Prime Minister is the chairman of the Planning Commission enabling the
coordination of the functions of the Commission.
 As per the recommendations of the Administrative Reforms, Commission changes were
made in the composition of the Commission.
 It included the Prime Minister as the Chairman who presides over the meetings of the
Commission, a deputy chairman who is the de-facto executive head and who has the

responsibility of formulating the drafts of the plan to the central cabinet, a secretary,
four full time members and some cabinet ministers as part-time members.
 The Finance Minister and Planning Minister are ex-officio members of the Commission
and a member secretary who is usually a senior IAS officer are also part of the
Commission. The functioning of the administration was coordinated by the additional
secretary.
 Senior officers in the ranks of deputy secretaries and under secretaries had to monitor
the progress of the programmes. There were no representatives from the state
government and it was a central body.
 The Planning Commission of India worked on the principle of collective responsibility.
 It had three organs namely the General Division, Subject Division and the Administrative
Division.
 The General Division relates to the entire economy and Subject Divisions concerns with
specific areas of development like food and agriculture, power and irrigation,
transportation etc.
 The Commission also includes the General administration branch and Evaluation
Divisions.
 Along with these, various other bodies also worked with the Planning Commission for
the formulation and execution of plans.
They are:
1. National Planning Council
 The National Planning Council was constituted during the Fourth Plan in 1965.
 It consisted of experts in science, engineering and economics and worked on areas that
include agriculture, land reforms, irrigation, education, employment, industry, trade,
management, family planning, social welfare, natural resources, transport and
international trade.
 It was the responsibility of each of these groups to study in detail the needs of each of
the areas and give the data to the Planning Commission which helps the Commission to
formulate the plan.
2. National Development Council (NDC)s
 The National Development Council included all the Chief Ministers of the States along
with the Prime Minister as its chairman.
 The inclusion of the states enables the implementation of the plans in the respective
states. Some cabinet ministers of the central government could also be present during
the deliberations of the NDC.

 The NDC had the role of reviewing the implementation of the plans periodically and
discusses various issues relating to the development of the state. It makes
recommendations for the effective implementation of plans and also ensures
involvement and support of the people in plan implementation.
 It works for effective administrative services and aims at developing resources that are
essential for future development.
Efforts Towards Poverty Eradication
 One of the major problems of India was poverty. The Planning Commission aimed not
only at increasing the per capita income but also improving the quality of life of the
people.
 Growth of the economy necessitated the inclusion of all sectors. It was also understood
that the quality of life of the common man was interrelated to his economic conditions.
 So, it was realised by the state that it was important to guarantee people a decent
standard of living along with proper access to education and health care which are next
to food, clothing and shelter.
 But the challenge was that economic growth and reduction of poverty are not always
related. From the fourth five-year plan, the government focussed on this issue and
concentrated on ‘garibi hatao’ during the early1970’s.
 Employment generation was considered to be one of the measures for reduction of
poverty. There were many problems due to unemployment and underemployment.
 In all the five year plans emphasis was given to employment.