- India adopted planned development after Independence: the Planning Commission was set up on March 15, 1950, with the Prime Minister as chairperson.
- Twelve Five-Year Plans ran from 1951 to 2017. The Planning Commission was replaced by NITI Aayog on January 1, 2015.
- The 1991 reforms — liberalisation, privatisation and globalisation (LPG) — shifted India towards a market-led economy.
Landmark Five-Year Plans
| Plan | Years | Focus / model |
|---|---|---|
| First | 1951–56 | Agriculture and irrigation; based on the Harrod–Domar model; exceeded its growth target |
| Second | 1956–61 | Rapid industrialisation and heavy industry; the Mahalanobis model |
| Third | 1961–66 | Self-reliance; failed because of the 1962 and 1965 wars and droughts |
| Plan holiday | 1966–69 | Three annual plans; the Green Revolution began |
| Fifth | 1974–79 | "Garibi Hatao" (poverty removal); ended a year early |
| Rolling plans | 1978–80 | Introduced by the Janata government |
| Eighth | 1992–97 | First plan after the 1991 reforms; human development focus |
| Eleventh | 2007–12 | "Faster and more inclusive growth" |
| Twelfth | 2012–17 | "Faster, more inclusive and sustainable growth" — the last Five-Year Plan |
Planning Commission vs NITI Aayog
- The Planning Commission made plans and allocated funds to states; NITI Aayog is a think tank with no power to give grants.
- NITI Aayog follows a bottom-up approach and promotes co-operative and competitive federalism through rankings such as the SDG India Index and the Export Preparedness Index.
- Both were set up by executive resolution — neither is constitutional or statutory.
Planning CommissionMarch 15, 1950
NITI AayogJan 1, 2015
Last Plan12th (2012–17)
Plan holiday1966–69
MSP crops (CACP)22 + sugarcane FRP
NFSA2013
The 1991 Reforms
Facing a balance-of-payments crisis — forex reserves had fallen to cover only about two weeks of imports — the government of P.V. Narasimha Rao and Finance Minister Manmohan Singh launched the New Economic Policy in July 1991:
- Liberalisation: abolished industrial licensing for most industries (the end of the "licence raj"), cut import tariffs, and moved towards a market exchange rate.
- Privatisation: disinvestment in public sector companies; the number of industries reserved for the public sector was cut sharply.
- Globalisation: automatic approval for FDI in many sectors and opening to foreign trade.
- Financial-sector reforms followed the Narasimham Committee (1991); tax reforms followed the Raja Chelliah Committee.
The Green Revolution
Begun in the mid-1960s, it combined high-yielding varieties (HYV) of seeds — Mexican dwarf wheat developed by Norman Borlaug — with irrigation, fertilisers and pesticides. M.S. Swaminathan is called the father of the Green Revolution in India. Gains were greatest in wheat and in Punjab, Haryana and western UP; side-effects included groundwater depletion, soil degradation and regional inequality.
| Revolution | Related to |
|---|---|
| White (Operation Flood, 1970) | Milk — led by Verghese Kurien; India is the world's largest milk producer |
| Blue | Fisheries |
| Yellow | Oilseeds |
| Golden | Horticulture (also honey) |
| Pink | Meat and poultry (also onions) |
| Silver | Eggs |
MSP, Procurement and Food Security
- The Commission for Agricultural Costs and Prices (CACP), set up in 1965, recommends Minimum Support Prices for 22 mandated crops and the Fair and Remunerative Price (FRP) for sugarcane. The final decision is taken by the Cabinet Committee on Economic Affairs.
- Since 2018–19, MSP has been fixed at least 1.5 times the A2+FL cost (paid-out costs plus the value of family labour).
- The Food Corporation of India (1965) procures grain, holds buffer stocks and supplies the Public Distribution System.
- The National Food Security Act, 2013 covers up to 75% of the rural and 50% of the urban population: 5 kg of grain per person per month for priority households and 35 kg per household per month for Antyodaya Anna Yojana families. Grain is now free under the PM Garib Kalyan Anna Yojana.
- One Nation One Ration Card lets beneficiaries collect rations anywhere in the country.
- Plan ↔ focus/model: First (Harrod–Domar, agriculture), Second (Mahalanobis, industry), Fifth (Garibi Hatao), Twelfth (last).
- Revolution ↔ product matching — white, blue, yellow, golden, pink.
- MSP mechanics: who recommends (CACP), who decides (CCEA), how many crops (22 + sugarcane FRP).
Q1. The Second Five-Year Plan was based on the:
✅ Answer: (c) Mahalanobis model
💡 Explanation: P.C. Mahalanobis's model emphasised heavy industry.
Q2. The period 1966–69, when annual plans replaced a Five-Year Plan, is known as the:
✅ Answer: (b) Plan holiday
💡 Explanation: After the Third Plan's failure, three annual plans were adopted.
Q3. Minimum Support Prices are recommended by the:
✅ Answer: (a) Commission for Agricultural Costs and Prices
💡 Explanation: CACP recommends; the Cabinet Committee on Economic Affairs decides.
Q4. Under the National Food Security Act, an Antyodaya Anna Yojana household is entitled to:
✅ Answer: (d) 35 kg per household per month
💡 Explanation: AAY households get 35 kg per month; priority households get 5 kg per person.
Q5. The "Yellow Revolution" is associated with:
✅ Answer: (a) Oilseeds
💡 Explanation: The Yellow Revolution aimed to raise oilseed production.
🔁 Revise in 60 Seconds
- Planning Commission Mar 15, 1950 → NITI Aayog Jan 1, 2015; 12 plans (1951–2017).
- First: Harrod–Domar; Second: Mahalanobis; plan holiday 1966–69; Fifth: Garibi Hatao.
- 1991: BoP crisis → LPG; Narasimham (banking), Chelliah (tax).
- CACP (1965): 22 crops + sugarcane FRP; MSP ≥ 1.5 × A2+FL; NFSA 2013: 5 kg/person, 35 kg AAY.
📌 Prelims Traps to Avoid
- ✘ NITI Aayog does not allocate funds to states.
- ✘ MSP is not a legal right; it is a policy announcement.
- ✘ The White Revolution is milk (Kurien), not the Green Revolution (Swaminathan).
What is the difference between the Planning Commission and NITI Aayog?
The Planning Commission (1950) prepared Five-Year Plans and allocated funds to states. NITI Aayog (2015) is a policy think tank that promotes co-operative federalism and has no power to allocate funds.
How is MSP decided in India?
The Commission for Agricultural Costs and Prices recommends Minimum Support Prices for 22 crops based on costs, demand and other factors. The Cabinet Committee on Economic Affairs then announces the final MSP, which since 2018–19 has been at least 1.5 times the A2+FL cost of production.