|Agency executives||Dr. Manmohan Singh, ex-officio chairman
Montek Singh Ahluwalia, Deputy chairman
Rudimentary economic planning, deriving the sovereign authority of the state, first initiated in India in 1938 by Netaji Subhas Chandra Bose when he was the Congress president and drafted by Meghnad Saha. The British Raj also formally established a planning board that functioned from 1944 to 1946. Industrialists and economists independently formulated at least three development plans in 1944.
After India gained independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India was established on 15 March 1950, with prime minister Jawaharlal Nehru as the chairman. The Planning Commission does not derive its creation from either the Constitution or statute, but is an arm of the Central/Union Government.
The first Five-year Plan was launched in 1951 which mainly focused in development of agricultural sector 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 the 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 after the initiation of structural adjustment policies.
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.
The composition of the Commission has undergone a lot of change since its inception. With the prime minister as the ex-officio Chairman, the committee has a nominated Deputy chairman, who is given the rank of a full Cabinet Minister. Mr. Montek Singh Ahluwalia is presently the Deputy Chairman of the Commission.
Cabinet Ministers with certain important portfolios act as ex-officio members of the Commission, while the full-time members are experts of various fields like Economics, Industry, Science and General Administration.
Present ex-officio members of the Commission, are Finance Minister, Agriculture Minister, Home Minister, Health Minister, Chemicals and Fertilisers Minister, Information Technology Minister, Law Minister, HRD Minister and Minister of State for Planning.
The Commission works through its various divisions, of which there are three kind:
The majority of experts in the Commission are economists, making the Commission the biggest employer of the Indian Economic Services.
The Planning Commission's functions as outlined by the Government's 1950 resolution are following:
From a highly centralised planning system, the Indian economy is gradually moving towards indicative planning where the Planning Commission concerns itself with the building of a long-term strategic vision of the future and decide on priorities of nation. It works out sectoral targets and provides promotional stimulus to the economy to grow in the desired direction. It also plays an integrative role in the development of a holistic approach to the policy formulation in critical areas of human and economic development. In the social sector, schemes that require coordination and synthesis like rural health, drinking water, rural energy needs, literacy and environment protection have yet to be subjected to coordinated policy formulation. It has led to multiplicity of agencies. The commission has now been trying to formulate and integrated approach to deal with this issue. The Planning Commission has asked the States to hike the power tariff to save the ailing power sector. It also called upon the States to utilise the power subsidy for improvement to essential services like drinking water supply, education and health for promoting inclusive growth.
The Planning Commission has faced criticism for spending 3.5 million (US$60,000) to renovate two blocks of toilets, while declaring a very low, and arguably unrealistic, threshold of poverty of a monthly consumption of 859.6 (US$15) in urban and 672.8 (US$12) in rural areas.