Indian Economy
🔒 Log in to trackFive Year Plans and NITI Aayog
🔒 Log in to trackIndia ran twelve Five Year Plans from 1951 to 2017. The Planning Commission made them. On 1 January 2015 NITI Aayog replaced the Commission. NITI is a think tank and does not allocate plan funds.
From plans to NITI
The Planning Commission was set up on 15 March 1950 by a Cabinet resolution. The Prime Minister was its chairman. It steered twelve Five Year Plans from 1951 to 2017.
From 1 January 2015 a Cabinet resolution created NITI Aayog (National Institution for Transforming India). Neither body is constitutional or statutory.
The plans and their ideas
| Plan | Period | Idea |
|---|---|---|
| 1st | 1951-56 | Harrod-Domar model; agriculture and irrigation |
| 2nd | 1956-61 | Mahalanobis model; heavy industry |
| 3rd | 1961-66 | Self-reliance; Gadgil strategy; broken by wars and drought |
| Plan Holiday | 1966-69 | Three annual plans |
| 4th | 1969-74 | Growth with stability |
| 5th | from 1974 | Garibi Hatao; ended early |
| Rolling plan | 1978-80 | Lakdawala concept |
| 6th | 1980-85 | Poverty removal; IRDP and NREP begin |
| 7th | 1985-90 | Food, work, productivity |
| Annual plans | 1990-92 | Transition years |
| 8th | 1992-97 | Started with the 1991 LPG reforms |
| 9th | 1997-2002 | Growth with social justice |
| 10th | 2002-07 | 8% growth target |
| 11th | 2007-12 | Faster and more inclusive growth |
| 12th | 2012-17 | Faster, more inclusive, sustainable growth |
Tip: The 2nd plan is Mahalanobis, and Mahalanobis means machines.
Breaks in the plan sequence
Two gaps and one special idea are asked often.
- Plan Holiday (1966-69): the 1962 and 1965 wars and drought derailed the 3rd plan. Three annual plans followed.
- Rolling plan (1978-80): the plan is revised every year. D.T. Lakdawala is linked to the concept.
- Annual plans (1990-92): they ran before the delayed 8th plan.
The 12th plan was the last. It ran to 2017, and then NITI took over.
NITI Aayog: who is in it
The Prime Minister chairs NITI Aayog. The Governing Council has all Chief Ministers and the Lt Governors of Union Territories. The PM appoints a Vice-Chairperson and full-time members. A CEO runs the daily work.
Its ideas are cooperative federalism, where states are partners, and competitive federalism, where states are ranked.
What NITI produces
NITI does not make Five Year Plans. It writes three documents:
- a 15-year vision
- a 7-year strategy
- a 3-year action agenda
Its well-known products are the SDG India Index, the state Multidimensional Poverty Index, the Composite Water Management Index and the Aspirational Districts Programme (2018, 112 districts).
Planning Commission versus NITI
| Point | Planning Commission | NITI Aayog |
|---|---|---|
| Started | 15 March 1950 | 1 January 2015 |
| Origin | Cabinet resolution | Cabinet resolution |
| Role | Made plans, allocated funds | Advises, monitors, builds indices |
Watch: NITI is not statutory and does not allocate plan funds.
Question types you will see
Each type: how to recognise it, the method step by step, and one question to try.
Plan and model matching
'The Second Plan was based on', 'the Harrod-Domar model belongs to which plan', or a thinker-plan match.
Link the 1st plan to Harrod-Domar and agriculture.
Link the 2nd plan to Mahalanobis and heavy industry.
Link the 3rd plan's strategy to D.R. Gadgil.
Heavy industry or capital goods in the question means the 2nd plan.
Two pairs carry most of the marks.
The Mahalanobis model, which stressed heavy industry, was the basis of which plan?
Show solutionHide solution
Mahalanobis is linked to machines.
Heavy industry was the focus.
That was the 2nd plan, 1956-61.
The Second Five Year Plan (1956-61)
Plan, years and theme
'Growth with stability was the theme of', 'which plan coincided with the 1991 reforms', or 'which was the last plan'.
Recall the theme hooks: 4th stability, 9th social justice, 11th inclusive, 12th sustainable.
The 8th plan opened in the liberalisation era.
The 12th plan (2012-17) was the last.
Check the gaps: Plan Holiday and Rolling Plan.
Each plan has one short theme, so match the theme to the number.
'Growth with stability' was the objective of which Five Year Plan?
Show solutionHide solution
Recall the theme list.
Stability belongs to the plan after the Plan Holiday.
That is 1969-74.
The Fourth Plan (1969-74)
NITI Aayog structure and documents
'Who chairs NITI Aayog', 'the Governing Council consists of', or the 15-year, 7-year and 3-year documents.
The Prime Minister chairs it.
The Governing Council has all Chief Ministers and UT Lt Governors.
A CEO runs daily work.
Its documents: 15-year vision, 7-year strategy, 3-year action agenda.
The Governing Council is the centre-state forum, and the document trio is a fixed list.
The Governing Council of NITI Aayog includes which members?
Show solutionHide solution
The Prime Minister is the chair.
All state Chief Ministers are members.
Lt Governors of Union Territories are members.
The PM, all Chief Ministers and the Lt Governors of UTs
Planning Commission versus NITI Aayog
Statement pairs on fund allocation, legal origin, or year of replacement.
Both came from Cabinet resolutions.
The Commission made plans and allocated funds.
NITI advises, monitors and builds indices.
Reject any option calling NITI statutory.
Most wrong statements swap the two roles or claim a legal status.
Which statement about NITI Aayog is correct?
Show solutionHide solution
It was set up on 1 January 2015.
A Cabinet resolution created it.
It is an advisory think tank and does not allocate plan funds.
It is a Cabinet-resolution think tank that replaced the Planning Commission.
Plan Holiday, rolling plan, annual plans
'The Plan Holiday occurred during', 'the rolling plan is linked to', or 'which plans were cut short'.
Plan Holiday is 1966-69, with three annual plans.
Rolling plan is 1978-80, linked to D.T. Lakdawala.
Annual plans also ran in 1990-92.
The 5th plan ended early.
Each break has its own years and its own cause.
The 'Plan Holiday' in Indian planning refers to which years?
Show solutionHide solution
The 3rd plan was derailed by wars and drought.
Annual plans replaced the five-year plan.
They ran for three years.
1966-69
Shortcuts that save time
Farm (1st), machines (2nd), wars (3rd), holiday, stability (4th), Garibi Hatao (5th), rolling plan, reforms (8th), inclusive (11th), sustainable (12th), then NITI.
Which plan coincided with the LPG reforms?
Show solutionHide solution
The reforms began in 1991.
The plans after the annual plans of 1990-92 began in 1992.
That is the 1992-97 plan.
The 8th Plan (1992-97)
Plan Holiday was 1966-69. Annual Plans were 1990-92.
Why was there a 'Plan Holiday'?
Show solutionHide solution
The 1962 and 1965 wars hit the economy.
Drought made it worse.
The 3rd plan was derailed and annual plans ran in 1966-69.
War and drought derailed the 3rd Plan.
Mistakes to avoid
Where most students lose marks on this subtopic.
Saying NITI Aayog is statutory.
It was set up by a Cabinet resolution.
Crediting the 2nd Plan to Harrod-Domar.
Harrod-Domar is the 1st Plan. Mahalanobis is the 2nd.
Thinking the 12th Plan ended early.
It ran its full term to 2017. NITI then took over.
Saying NITI Aayog allocates plan funds.
It advises and monitors. It does not allocate funds.
Mixing up the Plan Holiday (1966-69) and the rolling plan (1978-80).
Holiday means annual plans after the 3rd plan. Rolling means revised every year.
Quick revision
Read this the night before the exam.
Planning Commission: 15 March 1950, Cabinet resolution, PM as chairman.
12 Five Year Plans, 1951 to 2017. The 12th was the last.
1st = Harrod-Domar. 2nd = Mahalanobis, heavy industry.
Plan Holiday 1966-69. Rolling plan 1978-80. Annual plans 1990-92.
8th plan began with the 1991 reforms. 11th = inclusive. 12th = sustainable.
NITI Aayog: 1 January 2015, Cabinet resolution, PM chairs.
NITI documents: 15-year vision, 7-year strategy, 3-year action agenda.
Practice: 15 questions
Sets of 10, mixed across the question types above. Every answer has a step-by-step explanation.
Topic test · 10 questions
Suggested time 4 min · wrong answers go to your mistake notebook automatically.