Indian Economy
General Knowledge

Types of Planning

Types of Planning

Imperative Planning

In this type of planning the Central Planning authority decides upon every aspect of the economy and the targets set and the processes delineated to achieve them are to be strictly followed. This type of planning is mainly practised in the socialist economies.

Indicative Planning

In this type of planning the State sets broad parameters and goals for the economy. It is different from centralised planning as unlike in the latter, the State does not see Plan targets to the minutest details, but only broadly indicates the targets to be achieved. It was adopted in our country since the 8th Five-Year Plan, as practised in many developed countries.

Perspective Planning

It's a type of planning for a long period of time, usually 15-20 years. As a highly specialised task, it is operationalised through the Five Year and Annual Plans. In such form of planning, the planners formulate a perspective Plan that broadly defines the direction desired to be taken by the economy.

Rolling Plan

Under the scheme of rolling Plans, there are three different steps. First, a plan for the current year which includes the annual budget. Second, a plan for a fixed number of years, say three, four or five. It is revised every year as per the requirements of the economy. Third, a perspective plan for 10, 15 or 20 years.

Core Plan

As per this concept, the Planning Commission asks the states to submit their projected revenue estimates. On the basis of these estimates, Planning Commission determines the expenditure heads for State Annual Plans. This helps in keeping the Plan target to realistic limits and prevents diversion of funds from the priority items to the non-plan account. The concept of 'Core Plan' has emerged recently.

History of Planning in India

» First attempt to initiate economic planning in India was made by M. Visvesvaraya, a noted engineer and politician, in 1934, through his book ‘Planned Economy for India’.
» In 1938, National Planning Commission was set-up under the Chairmanship of Jawaharlal Nehru by the Indian National Congress
» It stated that the objective of planning was to ensure an adequate standard of living for the masses. It emphasized heavy industry and land reforms.
» In 1944, Bombay plan was presented by 8 leading industrialists of Bombay including J.R.D. Tata, G.D. Birla and others.
» It saw future progress based on textile and consumer industries and saw an important role for the state in post independent India.
» In 1944, ‘Gandhian plan’ was given by Shriman Narayan Agarwal. It emphasized decentralization, agricultural development, cottage industries, etc.
» In 1945, People’s Plan was given by M.N. Roy.
» In 1950, Sarvodaya plan was given by Jai Prakash Narayan. A few points of this plan were accepted by the government.