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Unit 3: Planning and Economic Development in the Era of Globalisation

Just after the attainment of Independence the Prime Minister Nehru established the Planning Notes
Commission in 1950 to assess the nation’s needs of material capital and human resources and to
develop economic plans for their more balanced and effective utilisation. The First Five-year
Plan commenced in 1950-51 and it was followed by a sequence of Five-Year Plans.

3.1 Objectives of Economic Planning in India

Now, let us begin the lesson with the objectives of economic planning in India. The Directive
Principles of our Constitution laid down:
“The State shall, in particular, direct its policy towards securing —
(a) that citizens, men and women equally, have the right to an adequate means of livelihood;

(b) that the ownership and control of the resources of the community are so distributed as
best to sub serve the common good and
(c) that the operation of the economic system does not result in the concentration of wealth
and means of production to the common detriment.”
The Directive Principles of the Indian Constitution are, therefore, an expression of the will of the
people of India for rapid economic growth. Accordingly, the Government of India accepted
planning as a means of adopting economic development. The Planning Commission set out the
following four long term goals of Planning:
(i) to increase production to the maximum possible extent so as to achieve higher level of
national and per capita income;

(ii) to attain full employment;
(iii) to reduce inequalities of income and wealth; and
(iv) to establish a socialist society based on equality and justice and absence of exploitation.

You must be aware that the First Five-Year Plan presented clearly the long-term objectives or
goals of economic planning in India as follows:
“Maximum production and full employment, the attainment of economic equality or social justice which
constitute the accepted objectives of planning under present day conditions are not really so many different
ideas but a series of related aims which the country must work for. None of these objectives can be pursued
to the exclusion of others, a plan of development must place balanced emphasis on all of these.”
In his book “Planning and the Poor”, B.S. Minhas a former member of the Indian Planning Com-
mission states:
“Securing rapid economic growth and expansion of employment, reduction of disparities in income and
wealth, prevention of concentration of economic power and creation of the values and attitudes of a free and
equal society have been among the objectives of all our plans.”
Now, you will learn about the above socio-economic goals under the headings of (a) Economic
planning and removal of poverty, and (b) Economic planning and social change.

3.1.1 Economic Planning and Removal of Poverty

You must be aware that the basic objective of economic planning in India is to bring about rapid
economic growth through development of agriculture, power, industry, transport and
communications, and all other sectors of the economy. The basic standard of economic growth
of a nation is the continuous expansion, year after year, of real national income and real per
capita income. It is the need of the hour that economic growth, should also involve improvements

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