Basic Features and Problems of Indian Economy:

India is a developing nation and economy, including a blended economy on the planet.
The significant attributes of a developing economy are overpopulation, the most
extreme populace underneath the poverty line, a poor infrastructure, an agro-based
economy, a slower pace of capital development, and low per capita income. Since the
freedom of the country, India has been creating numerous viewpoints according to the
monetary perspective. Albeit the Indian economy is in the developing stage, it will
gradually move to become a developed nation. The significant changes in the Indian
economy were made in the year 1991.

Characteristics of the Indian Economy:

The Indian economy is a developing one, and this is owed to the way that there are
exceptionally significant measures of illiteracy, unemployment, poverty, and so on in
India. With an instantaneously lessening Gross Domestic Product (GDP) to add to the
different issues confronted by the Indian economy, there are a ton of elements that add
to the characteristics and nature of the Indian economy being a developing one.

Low Per Capita Real Income:

The actual revenue or income of a nation alludes to the buying force or the purchasing
power of the nation overall in a given monetary year, while the per capita actual or real
income alludes to the the buying force or purchasing power of a person in a country in
that year. Emerging nations share the quality of a low for each capita real income.

High Rate of Population Growth:

Where there is a high populace, There additionally must be a framework set up to help
that populace. This implies there should be sufficient instructive, educational, and
clinical offices, enough business openings or employment opportunities with great
compensations, and so forth. With a high populace, particularly an undeniably high
populace, giving these facilities to every resident turns into an immense undertaking,
and frequently, state-run administrations or the government can’t carry on with it; in
this manner, it leaves the economy in the developing stage.

The Endless Loop of Poverty:

The endless loop of neediness and poverty deals with both the supply side just as the
demand side. On the supply side, since the products and services are not being sold,
there is an insufficiency of capital advancing or lending to low rates on investments, and
consequently a low degree of per capita real or actual income or pay. With this comes
the demand side, the endless loop of poverty alludes to when the buying power based
on the real income of the nation is low, prompting the exorbitance of products and
services. This is the way the endless loop of neediness works, and it is somewhat normal
to find in developing economies.

Highlights of the Indian Economy:

Agro-Based Economy:

The Indian economy is absolutely agro-based economy. Close around 14.2 % of Indian
GDP is contributed by farming and unified areas, while 53% of the total populace of the
nation relies on the horticulture sector.

Overpopulation:

Overpopulation is one of the main pressing issues of the Indian economy. The number
of inhabitants in India gets expanded by around 20% in every decade consistently.
Around 17.5% of the total populace is owned by India.

Incongruities in Income:

The most disturbing thing in the Indian economy is the convergence of abundance. As
per the most recent report, 1% of Indians own 53% of the abundance of the country’s
wealth. Among these, the top 10% claim a portion of 76.30%. The report expresses that
90% of the nation claims under a fourth of the nation’s wealth.

Destruction in Capital Formation:

The rate of capital development is emphatically associated with lower levels of pay or
income. There is a tremendous decrease in Gross Domestic Capital contrasted with the
earlier years.

Poor Infrastructural Development:

According to a new report, around 25% of Indian families can’t acquire electricity, and
97 million individuals can’t acquire safe drinking water. Sanitation administrations can’t
be acquired by 840 million individuals. India requires 100 million dollars to dispose of
this infrastructural abnormality.

Imperfect Market:

Indian markets are defective or imperfect in nature as it falls short in the absence of
portability, mobility, or movement, starting with one spot then onto the next, which
gets the ideal use of assets. Thus, fluctuations in prices occur.

Endless Loop of Poverty:

India is an ideal illustration of the term ‘A nation is poor since it is poor’. The endless
loop of neediness or poverty traps these types of developing countries.

Obsolete Technology:

Indian creation of work is labour-intensive in nature. There is an absence of innovations

and modern machinery.

Backward Society:

Indian social orders are caught in the scourge of communalism, male-dominated society,
odd notions, caste system framework, and so forth. The above factors are the significant
limitation of the development of the Indian economy.

Low Per Capita Income:

The per capita pay of India is considerably less than that of the other developing
nations. As indicated by the assessments of the Central Statistics Office (CSO), the per
capita net public income of India at present costs for the year 2020-21 (based on 2011-
12 prices) was around Rs. 86,659.

Despite a few negative perspectives, there are some sure things in the Indian economy.
Different plans of the government have supported the Indian economy in numerous
ways. India is driving towards superior financial construction with the assistance of
‘Digital India’, ‘Make in India’, and so forth.

Economic Impact Of British Rule In India:

Introduction
From the establishment of British colonial rule in the mid-19th century until
independence in 1947, India underwent significant changes in its economic structure
and development. The economic impact of British rule included those related to trade,
taxation, land ownership, and industrialization, profoundly influenced India’s economy.
The Britishers made structural changes in the Indian Economy and drained its wealth
through various policies.

Economic Impact of British Rule in India

 Deindustrialisation: The economic impact of British rule included the ruin of

Artisans and Handicraftsmen

o One-Way Free Trade: British citizens benefited from it after the Charter
Act of 1813.

o High Tariff on Textiles: Indian textiles faced 80% tariffs and lost
competitiveness in European markets.

o Net Importer: Railways facilitated an influx of European products; India

transitioned from exporter to importer.

o Loss of Livelihood: Traditional livelihoods were lost without

industrialization.

o India’s deindustrialisation contrasted with Europe’s intensified Industrial

Revolution.

o Artisans lost patronage from the prince.

o Many cities declined due to deindustrialisation.

o Ruralisation: Artisans now moved to villages and engaged in agriculture.

This increased pressure on land led to overburdened agriculture due to
the economic impact of British rule in villages.

 Impoverishment of Peasantry

o Rents Maximization: With the economic impact of British rule, the

Government maximized rents, and enforced Permanent Settlement,
causing insecurity for tenants.
 o Exploitation by Zamindars: Demanded illegal dues, evicted tenants, and
lacked incentive for agricultural improvement.

o Peasants were forced to borrow from moneylenders, and sell produce at

low prices.

o Triple Burden: Government, zamindar, and moneylender exploitation

lead to increased peasant hardships.

 Emergence of Intermediaries, Absentee Landlordism, and Ruin of Old

Zamindars

o Merchants, and moneylenders became new zamindars, resorting to land

grabbing.

o Increase in intermediaries led to absentee landlordism.

o New zamindars opposed the national movement, perpetuating British

rule.

 Stagnation and Deterioration of Agriculture

o Cultivators: They lacked means and incentives for agricultural investment.

o Zamindars: They had no roots in villages, and no incentive for agricultural

improvement.

o Government Spending: Little government spending on agricultural,

technical, or mass education.

 Famine and Poverty: Famines resulted from poverty unleashed by colonial

forces. Between 1850 and 1900, about 2.8 crore people died in famines.

 Commercialisation of Indian Agriculture

o In the latter half of the 19th century, agriculture shifted from a way of life
to a business enterprise which resulted in the economic impact of British
rule.

o Cotton, jute, groundnut, and others were grown for national and
international markets.
 o Forced process for Indian peasants, led to heavy indebtedness, famines,
and agrarian riots.

o Factors Encouraging Commercialisation: The spread of the money

economy, competition replacing tradition, unified national market,
improved communication, and British finance capital.

 Destruction of Industry and Late Development of Modern Industry

o Collapse of Indian Textile: The British stopped paying for Indian textiles in
pounds, leading to the destruction of Indian textile competition due to the
economic impact of British rule.

o Impact on Indian Shipping Industry: British ships were given monopoly,

Indian ships faced heavy duties; laws restricted Indian-built ships.

o Restrictions on Indian Steel Imports: Restrictions were on Indian steel

imports, forcing higher standard production for British use.

o Indian traders, moneylenders, and bankers played a role in British colonial

exploitation.

o Late Emergence of Modern Machine-Based Industries: Modern machine-

based industries began in the second half of the 19th century, mostly
foreign-owned.

o First Cotton Textile Mill: It was established (1853) in Bombay by Cowasjee

Nanabhoy. Also, the first jute mill was built in 1855 in Rishra, Bengal.

Colonial Economy as Criticized by the Nationalists

 Evolution of Intellectual Perspectives: Early 19th Century Intellectuals, initially

supported British rule for modernization and capitalist economic organization.

o There was disillusionment after the 1860s, as politically conscious

individuals started probing the reality of economic impact of British rule in
India.

 The Pioneering Analysts as economic critique were:

o Dadabhai Naoroji (Poverty and UnBritish Rule in India),

 o Justice Mahadev Govind Ranade,

o Romesh Chandra Dutt (Economic History of India),

o Gopal Krishna Gokhale, G. Subramania Iyer, and Prithwishchandra Ray.

Economic Drain Theory

 Dadabhai Naoroji presented the theory of economic drain in “Poverty and

UnBritish Rule in India.

 A Political Perspective: It denounced the depletion of India’s productive capital,

where a portion of India’s national product drained to Britain for political
reasons, causing inadequate returns for India.

 Components of Drain: salaries, pensions, interest on loans, profits on foreign

investment, payments for shipping, banking, and insurance services.

 Re-Entry of Surplus: Check and retardation of capital formation, growth of British

economy at the expense of India, re-entry of surplus as finance capital.

 Impact of Wealth Drainage: Draining wealth from India hampers income and
employment potential within the country.

 Nationalist Estimates: Nationalists estimated economic drain as more than total

land revenue, half of total government revenue, or one-third of total savings.

British Policies and Economic Critique

 India as Supplier: Critics argue that colonialism transformed India into a supplier
of raw materials and foodstuffs, a market for British manufacturers, and a field
for British capital.

 Intellectual Agitation for Economic Independence: Nationalist analysts organize

intellectual agitations for economic independence.

 Assertion: The economic impact of British rule made India poor and caused
economic backwardness.
 Addressing Poverty as a National Issue: Poverty was seen as a national issue,
requiring a solution through raising productive capacity and national
development.

 Development through Industrialization: Industrialization, equated with

development, was to be based on Indian capital, not foreign capital.

 Economic Drain: The suppression of Indian capital by foreign capital caused an

economic drain by strengthening British control.

 Critique of Trade and Railways

o Import of Finished Goods: Foreign trade patterns favoured the import of

finished goods and the export of raw materials.

o Railway development: It was to be coordinated with India’s industrial

needs, leading to a commercial rather than an industrial revolution.

o Railways enabled foreign goods to outsell indigenous products, benefiting

British interests.

 One-Way Free Trade and Tariff Policy

o Impact: One-Way Free Trade led to the ruination of Indian handicrafts

due to unequal and unfair competition.

o Guided Tariff Policy: This policy was influenced by British capitalist

interests and resulted in extensive economic impact of British rule.

o Finance and Taxation burden the poor, spare British capitalists and
bureaucrats.

o Reduction of land revenue, abolition of salt tax, imposition of income tax,

and excise duties was on consumer goods consumed by the rich middle
classes.

 Consequence of Economic Drain

o India suffered the depletion of its productive capital due to economic

drain.
 o Magnitude of the Nationalist Estimates: During that era highlighted the
extensive economic drain, surpassing key financial indicators of;

 More than the total land revenue or;

 Half the total government revenue or;

 One-third of the total savings (equivalent to 8% of the national

product).

 Economic Issue as a Stimulant to National Unrest

o Nationalist agitation on economic issues challenged the belief that foreign

rule benefited Indians.

o This stimulated intellectual unrest and the spread of national

consciousness during the moderate phase of the freedom struggle (1875–
1905).

Conclusion

 The economic impact of British rule transformed the country into a supplier of
raw materials and a market for British goods while hindering the development of
indigenous industries.

 Policies such as the Permanent Settlement and one-way free trade further
marginalize Indian farmers and artisans.

 Despite some modernization efforts, the overall legacy of economic impact of

British rule was one of economic exploitation and stagnation, leaving a lasting
imprint on India’s economy that continues to shape its development today.

Globalisation refers to the increasing interconnectedness of the world’s economies,

cultures, and populations. This phenomenon results from cross-border trade in goods
and services, technological advancements, and the movement of investment, people,
and information.

While nations have been building economic partnerships for centuries, “globalisation”
gained widespread recognition in the early 1990s, particularly after the Cold War, as
these cooperative arrangements significantly influenced modern daily life. Many factors
including the 1991 economic reforms have aided the rise of globalisation in India, which
has had profound impacts on Indian society, both positive and negative.

Globalisation in India Factors and Causes

The present era of globalisation is promoted and supported by several factors. A few of
the factors which aid the process of globalisation are as follows:

 Economic Reforms: In 1991, India initiated a series of economic reforms that

aimed to liberalise and globalise various sectors of the economy.

o This included reducing trade barriers, deregulating industries, and opening

up avenues for foreign investment.

 Information Technology: India emerged as a global hub for information

technology (IT) and software development.

o The country’s skilled workforce and proficiency in English made it an

attractive destination for multinational companies looking to outsource
their IT services.

o This led to a significant influx of foreign capital and expertise into the
country.

 Foreign Direct Investment (FDI): India has actively sought foreign investment by
easing restrictions on FDI in various sectors.

o This has encouraged multinational corporations to establish a presence in

India, bringing in capital, technology, and managerial expertise.

 World Trade Organization (WTO): WTO lays out rules concerning global trade
and sees that these principles are complied with.

 Infrastructure Development: Investments in infrastructure, including ports,

airports, and transportation networks, have enhanced India’s connectivity with
the rest of the world.

 Diverse Workforce: India’s diverse and skilled labour force has been a major
asset in the Globalisation process.
 o The country’s workforce is proficient in various industries, including IT,
engineering, healthcare, and other service sectors, making it an attractive
destination for global businesses.

 Cultural Exchange and Soft Power: India’s rich cultural heritage, including its
cinema, cuisine, yoga and traditions, has gained international popularity.

o This cultural exchange has helped foster global connections and create
opportunities for Indian products and services in international markets.

 Global Diaspora: The Indian diaspora spread across the globe has played a
significant role in globalizing Indian businesses and culture.

o They have acted as cultural ambassadors, creating networks that facilitate

trade, investment, and cultural exchange.

Globalisation Positive Impact on Indian society

Globalisation has had a profound positive impact on India across various aspects,
including technology, culture, society, education, and women’s empowerment.

 Economic Impact: India experienced substantial economic growth through the

Liberalization, Privatization, and Globalisation (LPG) model.

o This policy framework led to a remarkable increase in India’s GDP (for

example it was a 9.7% growth rate inthe fiscal year 2007-2008).

o India has emerged as the fourth-largest market in the world in terms of

market capitalization.

o Globalisation provides consumers worldwide with access to a broader

range of products and services, encouraging industries to innovate and
improve quality.

o Developing countries like India benefit from an influx of investments

originating from developed nations, which play a crucial role in fueling
economic growth.

 Technological Advancements and Brain Gain: Globalisation has spurred

significant technological progress.
 o In developing countries, this progress has led to a reverse brain drain, as
skilled professionals return to their home countries to contribute to
technological growth and development.

 Cultural Impact:

o Globalisation has led to a significant increase in television and internet

access in India. Television access expanded from 20% in 1991 to 90% in
2009.

o The Globalisation of food chains has brought a wide variety of

international cuisines to India. Restaurants serving global dishes have
become popular, allowing people to have tastes from around the world
within the country.

o Indian cities are witnessing the widespread availability of modern

technologies, including the Internet. This has empowered people with
access to various digital tools and platforms.

o The entertainment sector in India, notably Bollywood, has gained global

recognition and a broader market presence. It has expanded its reach and
popularity on the global stage.

 Social Impact:

o Globalisation has exposed Indians to a wider market, broadening their

mindsets and reducing stereotypes about nations, individuals, and
communities worldwide.

o The advent of information and communication technologies has increased

awareness about different countries, cultures, and traditions. However, it
has also shifted the focus from traditional values towards consumerism
and success.

o Globalisation has contributed to poverty reduction in India. Economic

growth and increased opportunities in sectors like IT have played a role in
improving livelihoods.

 Impact on Education:
 o Globalisation has played a role in reducing illiteracy rates in India, leading
to a higher literacy rate.

o It has encouraged collaborations between Indian and foreign universities,

enhancing educational opportunities and opening up new paradigms in
the education system.

o It has bridged the gap between formal and informal learning practices,
making education more accessible and versatile.

 Impact on Women: Globalisation has improved employment conditions for

women, offering better wage balance, flexible working hours, and the ability to
balance their roles at home and in the corporate world.

 Growth of Private or Corporate Sector:

o Globalisation has led to the growth of the private corporate sector. Indian
companies, especially in IT and pharmaceuticals, have expanded their
presence in the global market.

o Increased competition on the global stage has spurred innovation and

efficiency within the private sector.

Globalisation Adverse Effects in India:

Though globalisation has proved to be beneficial in several aspects of Indian society,

there are a few negative impacts, posed by globalisation, such as:

 Erosion of Indigenous Crafts and Traditions: Globalisation poses a threat to

indigenous crafts, literary traditions, and knowledge systems.

o Traditional weavers, for instance, face job losses due to their struggle to
adapt to changing consumer preferences.

 Cultural Domination and Loss of Identity: Globalisation can lead to the

dominance of powerful cultures over less powerful ones, resulting in the
marginalisation and loss of cultural identity among certain communities.

o There has been increased objectification of women and crimes against

women due to globalisation.
 Growing Rural-Urban Divide: Globalisation has contributed to rapid urbanisation,
with cities becoming hubs for economic activity and job opportunities. However,
this has led to a growing rural-urban divide, with disparities in access to
education, healthcare, and employment opportunities.

 Income Inequality: It has also exacerbated income inequality. The benefits of

Globalisation have not been evenly distributed, leading to disparities between
different socio-economic groups.

 Homogenization of Culture: Cultural globalisation can lead to a decline in Indian

cultural diversity as various symbols, customs, and beliefs become widespread.
This includes the adoption of celebrations like Christmas or New Year even in
non-Christian majority countries.

 Consumerism: One of the effects of globalisation on Indian society is increased

consumerism. It has changed the fabric of contemporary Indian society and also
contributed to environmental degradation.

o McDonaldization, a global culture, en route to transforming traditional

eating practices, has solidified its roots in India.

 Fragmentation of the Family Unit: Globalisation-driven migration can fragment

families, causing emotional and psychological stress for those left behind.

o The joint family system in India has given way to the nuclear family,
impacting social cohesion.

 Erosion of Traditional Values: Globalisation, particularly the influence of Western

norms, can lead to the erosion of traditional family and marriage values. Customs
like showing deep respect for elders or treating guests as deities are fading.

 Displacement of Tribals: It has led to an increase in cases of tribal displacement,

often due to large-scale infrastructure projects. This threatens the habitat and
traditional way of life for these communities.

 Dominance of Multinational Corporations: There is a concern regarding the

immense power exerted by multinational corporations (MNCs) over nations
worldwide. This dominance can lead to a form of economic colonisation, where
the interests of MNCs take precedence over national priorities.
 o Walmartisation is a phenomenon that economically impacts local
businesses when a large company such as Walmart opens a store in the
local area. It forces smaller retail firms out of business and reduces wages
for competitors’ employees. It has impacted the Indian economy as well.

 Job Loss: The outsourcing of jobs has led to a significant loss of employment
opportunities in developing nations. This trend has had a direct impact on the
livelihoods of many individuals in these regions.

 Spread of Communicable Diseases: Globalisation has facilitated the rapid spread

of communicable diseases across nations. Example: Covid 19 disease.

o The interconnectedness of the world increases the risk of disease

transmission, necessitating robust international health measures.

Globalization Measures for Indian Society

The following are a few ways to navigate through globalisation in a better way in Indian
society:

 Cultural Heritage and Diversity Preservation: Promote the preservation and

celebration of India’s rich cultural heritage, traditions, and linguistic diversity.

o Encourage cultural exchange programs, heritage conservation, and

initiatives that foster intercultural understanding.

o Promoting aculture of tolerance and understanding is necessary to create

an environment that allows for constructive dialogue.

 Sustainable Development Practices: These can be promoted to minimize the

negative impact of Globalisation on the environment and communities.

o This can include the adoption of eco-friendly technologies and responsible

management of natural resources.

 Protection of the Vulnerable Sector: While pursuing Globalisation, it’s crucial to

shield vulnerable sectors, such as agriculture, from adverse impacts. This ensures
that economic openness benefits all segments of society.

o For instance, India’s cautious approach towards joining RCEP is influenced

by concerns over an influx of inexpensive Chinese products.
 o Similarly, New Zealand’s robust dairy industry could potentially harm
India’s domestic sector. Therefore, promoting Globalisation should be
accompanied by well-considered provisions to protect local interests.

 Encourage Innovation and Entrepreneurship: This can include creating policies

that support small and medium-sized enterprises, providing funding, etc.

o Training in technical and vocational skills should be imparted that are in

demand in the global economy.

 Inclusive Growth and Poverty Alleviation: Implement targeted policies to ensure

that the benefits of economic growth reach all sections of society, particularly
marginalised and vulnerable communities.

o Strengthen social safety nets, and access to quality education, healthcare,

and housing to uplift those living in poverty

Niti Aayog and Planning Commission :

 The Planning Commission was established by a resolution issued by the Indian

government in March 1950. It was established to assist the government in
achieving its stated objectives of supporting a rapid improvement in people’s
quality of life via effective exploitation of the country’s resources, increased
productivity, and opportunities for everyone to participate in community service.
The Planning Commission was charged with evaluating all of the country’s
resources, replenishing those that were insufficient, making plans for the most
efficient and balanced use of resources, and determining priorities. The first five-
year plan for the country was enacted in 1951. The NITI Aayog was established
by the Indian government to replace the Planning Commission, which was
established in 1950. This action was done in order to better meet the needs and
aspirations of the people, with an emphasis on a “Bottom-Up” approach to
visualise the aim of Maximum Governance, Minimum Government, in the spirit of
“Cooperative Federalism.” NITI Aayog, the government of India’s premier policy
think tank, offers guidance and policy recommendations. In addition to providing
necessary technical support to the Centre, States, and Union Territories, NITI
Aayog develops strategic and long-term policies and programmes for the Indian
government. This move was made in order to better meet the needs and goals of
the people. In that it acts as the Government of India’s major platform for bringing
the States together in the national interest, supporting cooperative federalism, NITI
Aayog is an important evolutionary advance.
  What was the Planning Commission ?
 The Planning Commission was founded in 1950 by the Indian government to
manage the country’s economic and social growth, primarily via the preparation of
five-year plans. The commission’s initial objective was to improve the standard of
life of ordinary Indians by more effectively utilising the country’s material and
human resources, increasing productivity, and providing opportunities for all. It is
now in charge of reviewing the country’s resources on a regular basis, establishing
five-year plans and strategies for executing them, monitoring the plans’
implementation, and suggesting policy changes as needed. In 1951, the country’s
first five-year plan was implemented.
 The commission is led by India’s prime minister and consists of many full-time
members as well as a deputy chairman. A senior officer leads each of the
commission’s several departments, which relate to various areas of the national
economy and society. Education, health, infrastructure, science, financial
resources, industry, social welfare, rural development, and water resources are
some of the divisions.

 What is NITI Aayog ?

 The National Institution for Transforming India, or NITI Aayog, is an Indian

government policy think tank that gives feedback on the government’s many
programmes and policies. The NITI Aayog provides appropriate advice to the
federal government, state governments, and union territories.
 The Honourable Prime Minister of India and the Chief Ministers of all states and
Union territory, as well as the legislatures and Lt. Governors of other Union
Territories, chair this institution, which was established in 2015 by a resolution of
the Union cabinet.
 The NITI Aayog is a key player in developing plans for the Indian government’s
long-term policies and programmes. The planning commission, which was
established in 1950, was succeeded by this organisation. The Indian government
wanted to provide a single platform for all states to come together and act in the
national interest while also better addressing the needs of the people by taking this
move. NITI Aayog is a ground-breaking organisation that promotes cooperative
federalism.

 Difference Between NITI Aayog and Planning Commission:

NITI Aayog Planning Commission

The NITI Aayog does not have the ability or The Planning Commission had the
mission to impose policies on states. The National ability to impose policies on
Institution for Transforming India (NITI Aayog) governments as well as approve
is a think tank and advisory body. projects.

The Planning Commission had the

ability to provide financing for a
The NITI Aayog has not been given the power to number of national and state-level
distribute cash. The Finance Ministry is in charge. programmes and projects to state
governments and various central
government departments.
State governments had nothing to do
with the process other than attend
The state governments are more involved in the
meetings. The only body in which
NITI Aayog.
the state government had a say was
the National Development Council.
The charter of the Planning
Part-time members of the NITI Aayog are
Commission did not allow for the
appointed according to the needs.
nomination of part-time members.
The National Development Council
was made up of Lieutenant
The NITI Aayog Governing Council is made up
Governors and State Chief Ministers.
of Lieutenant Governors of Union Territories and
The National Development
State Chief Ministers.
Commission demanded a report from
the Planning Commission.
The CEO of NITI Aayog is appointed by the The Planning Commission’s
Prime Minister. Chief Executive Officer is the secretaries were appointed in
title given to the person in charge of a company. accordance with regular procedure.
The NITI Aayog board of directors may have
The former Planning Commission
fewer full-time members than the Planning
had eight full-time members.
Commission.
Within the NITI Aayog organisation structure,
new positions such as CEO and Vice-Chairperson
The Planning Commission’s
have been created. The CEO’s role is similar to
organisational structure consisted of
that of a secretary. Four Cabinet members would
full-time members, a member
serve as ex-officio members. The NITI Aayog is
secretary, and a Deputy Chairperson.
made up of two part-time members and five full-
time members.
The Planning Commission
developed policies first, and
The ultimate policy would bear fruit at NITI
subsequently, state governments
Aayog following adequate consultations with
were consulted on funding
state governments throughout the policy
allocations for programs and
formation stage. It follows a bottom-up approach.
projects. It follows a top-down
approach.
 Conclusion: Despite the many changes between the NITI Aayog and the former
Planning Commission, their goals and objectives were identical. Both
organisations worked toward national development and developed strategies for
India’s growth and development. As a result, these organisations must be given
additional authority to establish economic growth models that meet the country’s
socio economic demands.

Evaluation of Five-Year Plans :

Achievements of Five-Year Plans

1. Agricultural Development:
o Green Revolution (mainly during the 3rd and 4th Plans) increased food
grain production.
o India moved from food-deficient to self-sufficient in food.
2. Industrial Growth:
o Heavy industries, steel plants, and public sector enterprises were
established.
o Basic infrastructure in power, transport, and manufacturing improved
significantly.
3. Poverty Alleviation:
o Programs like IRDP, MGNREGA (later years) attempted to reduce poverty.
o Some progress in reducing absolute poverty, especially after liberalization.
4. Human Development:
o Literacy rates and life expectancy improved over the years.
o Health infrastructure, though weak, saw gradual improvement.
5. Infrastructure Development:
o Large-scale investments in dams, power plants, and roads.
o Connectivity in rural areas slowly expanded.
6. Economic Planning and Institution Building:
o Helped build a framework for economic policy-making.
o Promoted long-term thinking and mobilization of national resources.

🔹 Failures and Limitations of Five-Year Plans

1. Uneven Growth:
o Regional disparities widened; some states progressed rapidly while others
lagged.
o Benefits of development did not reach all sections equally.
2. Employment Generation:
o Despite economic growth, unemployment and underemployment persisted.
o Jobless growth became more visible post-1990s.
3. Public Sector Inefficiency:
o Many PSUs became loss-making due to poor management.
o Over-dependence on state-led enterprises led to low productivity.
4. Implementation Gaps:
o Corruption, bureaucracy, and poor monitoring affected outcomes.
o Targets often missed due to lack of coordination and inefficiency.
5. Agricultural Stagnation:
o Despite early gains, later plans failed to sustain high growth in agriculture.
o Farmers' income and rural distress remained major concerns.
6. Environmental Degradation:
o Industrial and agricultural expansion led to pollution and deforestation.
o Sustainability was often ignored in planning.

🔹 Overall Impact

 The Five-Year Plans laid the foundation of India's mixed economy and built core
industries and infrastructure.
 Initial plans emphasized self-reliance and import substitution, while later ones
shifted towards liberalization and market reforms.
 After the 12th Plan (2012–2017), planning moved away from centralized models,
with NITI Aayog replacing the Planning Commission to adopt a more flexible and
dynamic approach.