Planning is the broad process of preparing a framework of actions to attain stated objectives. The determination of objectives, the specification of targets, the mobilization of resources, the allocation of resources, are aspects, which form integral part of any planning. Therefore it is blueprint of actions including their operationalisation in the shape of policies, programmes and their delivery system. Planning is essential for achievement of desired objectives.  Once this is done, one can decide what is feasible, considering the resources at hand and how additional resources can be mobilized.

Planning during British period was vague and having contradictory objectives. The colonial interests and welfare interests could never be reconciled and virtually no planning infrastructure could emerge in India. During the freedom struggle, the leaders had made a commitment that after the attainment of independence, the country would work on a planned model of development.

After independence, Government of India set up the Planning Commission in 1950 to assess the human and material resources of the country so as to formulate a plan for their balanced and effective utilization. There have been schemes and plans of development in almost all dimensions of socio economic life, such as health, education, population control, industry, transport, irrigation, communication and agriculture.

Broad approaches – mixed model

After Independence, India did not follow either the First or the Second world model of development[1] in the true sense of or the term. In other worlds, it adopted neither the capitalist nor the socialist model of development. To follow the capitalist mode of production, meant, providing total freedom to private enterprise to undertake the task of national development. A complete transformation to socialism required total nationalization of all the spheres of economic and social life. The Socialist Model was rejected because it led to the emergence of totalitarian state which hindered democratic freedoms. It was apprehended that capitalist system may result in the concentration of wealth and means of production to the common detriment. This was also justified owing to the presence of extreme inequalities at the time of independence.

India adopted a path of development in between the two models, which is knows ‘mixed economy’. The long-term goals of planning included increase production , full employment, reduce inequalities of income and wealth; and to establish a socialist based on equality and socialist justice and absence of exploitation.

On the one hand, India encouraged private business and industry and gave opportunity to big business houses, and other medium and small size entrepreneurs. On the other hand it has almost full control, at least in principle, over all the entrepreneurial and business activities either directly or indirectly.

The deliberate enlargement of the public sector was symbolized by the phrase `the development of socialist pattern of society’ in the early period of planning, which was later replaced by the phrase `democratic socialism’. The basic philosophy of democratic socialism entailed a programme of maximizing production with maximum employment and along with this a programme of action towards reducing economic and social disparities, thus ensuring a national minimum level of living for all. In other words, growth with social justice within the framework of a democratic society were the tasks to be accomplished under democratic socialism.

The mixed economy framework in India was particularly marked with the deliberate development of the public sector in (a) Defence, heavy and basic industries, (b) the development of economic and social infrastructure and (c) in controlling the commanding heights of the economy, viz., banking and insurance. The distinguishing feature of the Indian mixed economy model was that it emphasised that the private enterprise should reconcile the element of self-interest with social interest and in case, it fails to do so, the government would be left with no option but to take over the control of such sectors of the economy. This implied that in such areas where either the private enterprise fails to subordinate its self-interest, the government would deliberately extend the area to the public sector.

• The state did not favour “collectivesiation” in the form of big farms, but worked on the principle of “peasant proprietorship” with a ceiling on holdings. In the same way , in small enterprises, private ownership was accepted. It left to the private sector, investment would be driven by market forces based on profit motive.

Mixed economy model assumes that areas of profit maximization may not be areas of maximizing social welfare. For instance, private sector was not willing to invest in economic infrastructure. The state, therefore, decided to undertake the development of the economic infrastructure - energy, irrigation, transport and communication – in the public sector. Similarly , State sougt to provide social infrastructure in the form of education and health so that the poor are enabled to acquire these facilities either free or at a very low and affordable cost. The state has full control over railways and postal departments.

It is true that India adopted a ‘mixed’ path of development, but scholars differ in their opinion about the real functioning of the economy. One view is that Indian path of development is a capitalist one. Entry of state of heavy industries was, in fact, meant to support private enterprises, in the sense that these industries did not yield high profits and required a long gestation period and high capital investments. Hence they did not attract private entrepreneurs, and at the same time industrial development was not possible without basic industries.

Similarly, it has been argued that big enterprises still dominate over the small ones, and the industrial sector over the agricultural one. Also there is a concentration of economic power in a few big business houses. The other view is that our bias has been increasing towards a socialist model, as is evident from the facts such as nationalization of banks and continuous entry of Public sector in numerous activities. The licensing , MRTP and FERA restrictions indicate towards this .These are controversial arguments, which cannot be sorted out here. The fact remains that India pursues a ‘mixed’ path of development.

But after 1991, there has been a certain shift in the emphasis towards capitalist model of planning.

Models of Growth

Apart of broad mixed model of planning in India, different models of growth at different point has been important aspect of idea of planning in India.

The three major models have been adopted in India since the beginning of the Second Plan , these are Nehru-Mahalanobis Model of Growth, Gandhian Model of Growth, Rao-Manmohan Model of Growth

Prof. P. C. Mahalanobis developed this heavy industry model based on the Soviet experience. This model popularly known as Nehru-Mahalanobis Model formed the basis of the Second Plan. This model continued to be the principal strategy of the various Plans with minor modifications till 1977 The model emphasised the rapid development of heavy industry with the aim of creating an industrial base of the economy as also to make it more self-reliant. The government conceived of the public sector as the engine of growth to carry forward the establishment and expansion of heavy industries and infrastructural facilities. The model used centralized, regulative planning in order to achieve its objectives.

Gandhian model of development was emphasised by the Janata Party. The model emphasised the rapid development of agriculture and small industries. Village and small industries were emphasised from the point of view of production as well as employment. The model necessitated the following changes in the pattern of planning. Employment-oriented planning to replace production-oriented planning .Gandhian model intended to tackle the problem of distribution of income at the employment as the principal means of providing national minimum and removal of poverty.

Rao-Man Mohan Model of Development was introduced in 1991. It emphasised privatisation and globalization of the economy. Firstly, areas hitherto reserved for the public sector were to be opened to the private sector. Other steps included abolition of licensing, invitation to foreign direct investment, withdrawal of protectionist policies , introducing structural reforms leading privatization , globalization and liberalization. Recently after the year 2000, widespread reforms have also been initiated in the agriculture, which remained as a neglected sector after 1991, in term of reforms.

The three models of development have been addressed to solving the problems of growth, employment, removal of poverty and self-reliance by emphasizing a strategy at a particular stage of development. Nehru-Mahalanobis Model was successful in laying down the foundations of an industrial economy in India. The Gandhian Model emphasised reconciliation of the production and employment objectives. Rao-Manmohan Model emphasised the role of private sector – Indian and foreign – in the process of development. It therefore emphasised privatisation, liberalisation and globalization. The model used decentralized, indicative planning in order to achieve its objectives.

Sectoral Development/ Target group/ Area development

Planning requires identification of focus areas. Balanced development of the key sectors of the economy is essential for socio-economic development of the society. Both industrial and agricultural sectors needed special attention in planning; Policies and plans were adopted, which concentrated on particular sectors. For example land reforms were a sectoral initiative for the development of agriculture after Independence. This sectoral approach got further accentuated in the ‘green’ and ‘white’ revolutions, i.e., development of cash crops, and dairy products, respectively. Such revolutions have not been widespread. They are confined to a few states, such as Punjab, Haryana, Tamil Nadu, Gujarat and Maharashtra.  Similar programmes were also initiated subsequently for industrial development.

Along with Sectoral strategies , emphasis on giving attention to particular sections of population was must. These section as categories like women , dalits , tribes, small farmers etc were suffering with acute disabilities. Therefore , various programmes carries a preference for these target groups. This aspect also became integral aspect of planning. There are many other rural development programmes for certain target groups, under the 20-point economic programmes.

Along with this two strategies , area development was also identified as a unit of planning for launching various programmes owing to typical problems faced by the same. The Command Area Development Program. Drought Prone Area Program, flood prone area programme etc are important in this respect.

Integrated Rural Development Program (IRDP) combined both the area development and target group approaches. As a target group program, its focus is on the poorest of the poor, and the unit of assistance is the ‘family’, and not a person. Under IRDP there are special programmes for employment, like Training Rural Youth for Self-employment (TRYSEM). Besides there are other programmes such as the National Rural Employment Programme (NREP).

Community Development and Cooperative Movement

Besides sectoral approach, a community development scheme was initiated in 1952 for overall development of villages. The philosophy of this program was to educate, encourage and enable the people to develop themselves, with their own efforts and resources. But the program was not very successful. It was realized that a greater participation of the rural people in the preparation and execution of development schemes was essential. In other worlds, it required a greater administrative decentralization. Hence Panchayati Raj System was introduced in 1957. It envisaged a three-tier system, viz., Village Panchayat (village level), Panchayat Samitis (block level) and Zila Parishad (district level). This system involved the people at local level, in both planning and execution of development schemes. It was an effort towards development from the bottom. But unfortunately before 73^rd amendment act, 1992 . due to lack of proper implementation and optional character of Panchayat , this system could not succeed.

The same fate met the cooperative movement. Land reforms desired , cooperative cultivation on the Chinese pattern, in which the land is owned by the community (village) and the farmers have their shares. But this died not work in India due to the country’s political system which did not permit abolition of private ownership of land, and because the farmers did not surrender land to the community voluntarily, in spite of the appeal of Bhoodan (land donation) movement of Vinoba Bhave. However, credit societies, which granted short term agricultural credit, did become popular. But today many of the credit societies have become defunct, or are not functioning effectively. The member borrowers usually become defaulters. The important point is that there is no spirit of cooperation among the local people, because most of the affairs of these cooperatives are managed by the government of semi-government officials, such as the Registrar, Managing Director, and Administrator etc. In many cases the nationalized banks provide funds to cooperatives for advancing loans to their members.

The rural credit cooperatives are relatively effective in Maharashtra, particularly among the sugarcane producers, who also have cooperative sugar mills. In other fields, too, there are exceptionally successful cases of cooperatives, viz., Milk Producers Cooperative at Anand in Gujarat. Anand Milk Producers’ Union Limited (AMUL) emerged out of the farmers’ cooperative efforts at the village of Anand, which now has an important place among the rural cooperatives in Asia.

Changing role of Planning in post liberalization era

Adoption of policy of liberalization has not diminished the vital need for planning. It is essential in order to tackle the gap in the physical and social infrastructure, which still exist in our country. The thrust of recent economic policies is towards this goal.  We have to sharpen our tools and develop our methods still further.  We have to find out which policies are effective, which investments are catalytic in nature and which institutions work.

Economy

An important pre-condition for indicative planning, which has been introduced after 8^th five year plan[2], is to have a strategic vision of the future, i.e. the direction in which we wish society to proceed.  That vision may include an articulation of our aspirations in respect of human development and material progress.  That vision would also broadly indicate the path before us. 

In the context of sustainable development, the long-term views of population, natural resources like and, water, and the environment, will necessarily remain a concern of the Government  If one has to plan even for these limited areas, one has to take an integrated view of the entire economy. 

In the agricultural sector, Apart from recasting the system of production, in significant way to enhance yields and break the root cause of poverty, India must liberate her farmers from the trap of low investment, low yield and low income model of agriculture production by embracing technology.

While massive investments have been made in irrigation projects, lack of adequate pricing policy has led to a decline in sustainability of major and minor schemes. 

Education

We still have one-fouth of our male citizens and one third of our female citizens illiterate.  Un-locking the human mind through education should be the first step on India’s path to progress.  If education is not addressed, deficiencies in the supply side, in the form of an inadequately educated resources base, can throttle growth.  And India may lose the opportunity to Chine in leveraging her people.  Education policy planners must liberalize higher education and concentrate on providing free and compulsory primary education in eradicating illiteracy totally.

Health

It is important because it reflects the quality of life of a nation and its impact is crucial on economic development.  India has the dual problem of addressing life-threatening diseases for a vast population, while simultaneously talking the growing numbers afflicted with lifestyle diseases.  This state of affairs portends a major handicap for India in the 21st century.

The government should focus on primary and preventive healthcare and spend about five times of its current spending, or 1.7 per cent of GDP, on health.  There has to be a mix of public and private initiatives in secondary and tertiary segments of healthcare.  Reforms in healthcare cannot only raise quality of life for all Indian citizens but also make the healthcare industry in India itself a great force for economic growth.

Infrastructure

Infrastructure is an engine of not just industrial growth but also social development. Emphasis should not  be placed just on national highways but on rural roads, not just on power generation plants but on reliable rural electricity supply and not only on city water supply projects but on rural water supply and sanitation.  Infrastructure development in India has to be viewed as means to taking economic development to the remote corners of the country.

For a large population, access to safe drinking water is still s dream.  Management of water is not just a question of managing a critical natural resource for social and economic good.  It is an important determinant and driver of India’s global position and competitiveness.  Low-cost hydroelectricity generated from water resources has the potential to keep industrial production costs low and enable Indian industry to be very competitive. Policies that use market forces and incentives to tackle problems of externalities  and pricing of water must be in place.

The above discussion brings out clearly that the economic impact on health, infrastructure development in rural areas, agriculture, water resources management and free flow of intellectual capital across borders have to be seriously addressed.  India must break free from half-hearted and incremental efforts to bring growth and prosperity, by way of better integration of planning and market mechanism.