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Indian Economy / Development Planning

Composition and Functions of Planning Commission of India

Planning commission of India was established in 1950 through a Cabinet resolution and it got dissolved in 2014 and was later replaced by National Institution for Transforming India (NITI) Aayog. The main functions of Planning Commission were to formulate and execute the 5 year plans. Until it got dissolved, the Planning Commission played an important role in India's development.



Composition of Planning Commission

  • The composition of the Planning Commission underwent significant changes since its origin. The Prime Minister used to be the ex-officio chairman of planning commission. There was a Deputy Chairman, who used to be nominated and had a rank of a Cabinet Minister.

  • Cabinet Ministers holding important portfolios were included as ex-officio members. It had full-time members, who were experts in different fields like industry, science, economics and general administration.

  • Ex-officio members of the Commission included the Home Minister, Health Minister, Finance Minister, Agriculture Minister, Chemicals and Fertilisers Minister, Human Resource Development Minister, Law Minister and Minister of State for Planning.

  • The first deputy chairman of the Planning Commission was Gulzarilal Nanda.

Functions of Planning Commission

The functions of Planning Commission of India include

  • Identification of resources covering natural, human as well as financial resources and to examine the possibilities for fostering such resources for the nation building.

  • Formulating objectives and determining priorities of the nation.

  • The main role of Planning Commission was to formulate 5 year Plans by effectively using the resources of the country.

  • The other important function of Planning Commission was to monitor the implementation of the 5 year Plans and to allocate the appropriate resources at different stages of implementation.

  • Identifying the hindering factors of economic development and make sure that appropriate atmosphere is created for proper implementation of the Plan by taking into consideration of the prevailing political as well as social conditions.

  • Making the midterm appraisal of the 5 year Plans and proposing rectifications if necessary.


National Development Council (NDC)

  • It was established on 6th August, 1952 based on the recommendations made by the Planning Commission.

  • Prime Minister of India is the ex-officio chairman of National Development Council. Its members are all the union cabinet ministers, all the Chief Ministers of the states in India, all the representatives of Union Territories and all members of NITI Aayog.

  • It is an important forum to continuously review the development process and take the appropriate macro level decisions.

  • It is the most effectual institutional mechanism to ensure harmonious cooperation and partnership between the Central Government and State Governments.

  • Its main functions include, (i) To promote common socio-economic policies and to ensure balanced and rapid development of all regions (to minimize regional imbalances), (ii) To consider the National Plan that is devised by the NITI Aayog and (iii) To review the functioning of the National Plan from time to time and to recommend steps that are necessary for achieving targets proposed in the National Plan.

  • NDC used to consider and review the National Plan prepared by the Planning Commission. Since the functions of Planning Commission were taken over by NITI Aayog, NDC is now taking care of National Plan of NITI Aayog.