Rudimentary economic planning, deriving from the
sovereign authority of the state, was first initiated in India in 1938 by
Congress President Netaji Subhash Chandra Bose, Atul Tiwari,
Pandit Jawaharlal Nehru who had been persuaded by
Meghnad Saha to set up a National Planning Committee.
M. Visvesvaraya had been elected head of the Planning Committee.
Meghnad Saha approached him and requested him to step down, putting forward the argument that planning needed a reciprocity between science and politics.
M. Visvesvaraya generously agreed and Jawaharlal Nehru was made head of the National Planning Committee. The
British Raj also formally established the Advisory Planning Board under
K. C. Neogy that functioned from 1944 to 1946. Industrialists and economists independently formulated at least three development plans. Some scholars have argued that the introduction of planning as an instrument was intended to transcend the ideological divisions between
Mahatma Gandhi and Nehru. Other scholars have argued that the Planning Commission, as a central agency in the context of plural
democracy in India, needs to carry out more functions than rudimentary economic planning. After India achieved
independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the
Prime Minister of India, was established on 15 March 1950, with Prime Minister Jawaharlal Nehru as the chairman. Authority for creation of the Planning Commission was not derived from the
Constitution of India or statute; it is an arm of the Central
Government of India. The first Five-Year Plan was launched in 1951, focusing mainly on development of the agricultural sector. Two subsequent Five-Year Plans were formulated before 1965, when there was a break because of the Indo-Pakistan conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-Year Plan was started in 1969. The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre, and the years 1990–91 and 1991–92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies. For the first eight Plans the emphasis was on a growing
public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature. In 2014, the Narendra Modi government decided to wind down the Planning Commission. It was replaced by the newly formed
NITI Aayog. ==Organisation==