Economic Planning in India

India is a vast country with multiple problems faced by its population. The British ruled the country for nearly two centuries and exploited its resources for their benefit leaving the country reeling under absolute poverty. When the British left India in 1947 there was nothing to be proud of or be happy except for the freedom. The problems were many before the Indian government.

Besides mass poverty there was the problem of food shortage and inflation. Illiteracy, lack of health care, lack of infrastructure, etc. were other serious problems facing the country. As a long term strategy, planning for economic development was the answer to solve these problems.

Economic Planning

Economic planning is a process which involves the following steps:

  1. Preparing a list of the problems facing the economy.
  2. Rearranging the list on the basis of priority. The top priority issue which needs to be addressed immediately should be placed at number one and so on.
  3. The next step is to identify the problems which are to be solved in the immediate short run and the other problems which are to be addressed over the long period.
  4. Fixing a target to achieve the desired goal. The target could be a specified time period within which the problem must be solved.
  5. Estimating the amount of resources needed for achieving the target.
  6. Mobilizing the resources is another important task. This means that the planners must know the sources of arranging the required resources.
  7. Once the resources are arranged, implementation and execution process starts in an organize manner to achieve the desired goal.

To make sure that everything is running smoothly and to rectify mistakes if any or to modify the style of working to accommodate any change, periodic review must be done till the final achievement is realized.

Economic Planning in India

India adopted a system of five yearly planning to address its various socio-economic problems. Indian government adopted five year plan starting from first year plan in 1951 development. The idea was to make a list of important problems to be solved keeping in view the given resources and the capacity to arrange the resources. Then make a review after five years of what has been done and rectify the mistakes accordingly in the next five year plan period and so on.

Objectives of Planning in India

  1. Economic growth
  2. Increase in employment
  3. Reduction in inequality of income
  4. Reduction in poverty
  5. Modernization of the economy
  6. Ensuring social justice and equality