Five Year Plans In India| Indian Economic Development| Chapter-2| CBSE

The previous chapter concluded that economy that we inherited from British was Backward and Stagnant. Agriculture was principle source of subsistence and large percentage of population was facing abject poverty. Life expectancy was extremely low.

Now, we will study about Goals and Achievement of Five year plans in India.

Let's begin....

Economic Planning

According to Planning Commission,"Economic planning means utilisation of country's resources in different development activities in accordance with national priorities. "

Economic Planning is a process under which central authorities (like Planning Commission) defines a set of targets to be achieved within a specific period of time,  keeping in view needs and means of the country. 

Planning Commission, established in 1950, is the Central Authority of India which formulates India's Five Year Plans among other functions. In India, Prime Minister is the chairperson of Planning Commission. 

Note: In February 2015, It has been re-named as "NITI AAYOG". The role of Niti Aayog is to make policies to accelerate pace of growth and development in the country. 

What is Free Play Of Market Forces? 

It refers to that situation when the Government of a country does not interfere with market forces of demand and supply. Producers are free to produce the goods which fetch them high price and high profits. Profit Maximisation dominates process of decision making,  which is the model of Capitalist Economy. Planning in such economy is only Directive Planning. 

Directive Planning refers to a system in which planning is introduced just to direct the forces of demand and supply. In such a planning, there is no direct participation of the state(Govt.) in the process of growth. It is pursued in Capitalist Economy. 

On the other hand, Comprehensive Planning refers to a system in which Government herself participates in process of growth and development. It is pursued in Socialist Economies as well as Mixed Economies. 

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