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UNIT 7 ROLE OF PLANNINGStructure7.0 Objectives7.1 Introduction7.2 Meaning of Planning7.3 Need for Planning7.4 Machinery for Planning in India

7.4.1 Evolution of Planning7.4.2 Institutions Engaged in Planning7.5 Planning Process in India7.6 Limitations of Planning in the Country7.7 Conclusion7.8 Let Us Sum Up7.9 Key Words7.10 Some Useful Books7.1 1 Answers to Check Your Progress Exercises

7.0 OBJECTIVESAfter reading this unit, you should be able to :

discuss themeaning of planning,highlightthe need for planning in India,analyse the n a t m of planning in the country,discuss the role of the institutions involved in plan farmulation, implementation,monitoring and evaluation,explain the process of farmulation of plan, andstate the limitations of India's planning process.

7.1 INTRODUCTIONPlanning is generally associated with the development of an economy. Since plansattempt to determine how we develop, they affect each and every sphere of thesociety. The need for planning in India arose because of the complex nature ofproblems of development. The development tasks of the country had to meet thechallenge of backwardness and poverty. India needed excessive resource mobilisation,high rate of investment, technological advancement and institutional overhauling. Forall these reasons national economic planning became imperative.Indian plans have repeatedly stressed their adherence to democratic planning Theyhave aimed at increase in production, economic growth, balanced regionaldevelopment, more employment opportunities, removal of poverty, self-reliance andsocial justice. To understand the role of planning in India, we must try to familiariseourselves with the concept of planning in India, institutions engaged in planning,objectives of our plans and the achievements and limitations of Indian planningsystem. This unit would highlight these aspects and enable us to understand thenature of planning in India

7.2 MEAN ING OF PLANNINGPlanning means to determine what is to be done and how it is to be done. In a verybroad and general way, planning may be treated as a systematic pre-thought out

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Development Strategy and process of determining the objectives of administrative effort and of devising thePIanning means calculated to achieve them". According to Seckler Hudson, "planning is the

process of devising a basis for a course of future action". Planning, according toUrwick, is "fundamentally an intellectual process, a mental pre-disposition, to dothings in an orderly way, to think before acting, and to act in the light of facts ratherthan guesses. It is the anti-thesis of speculative tendency".It is often said that planning is a rational method of decision-making and organisation.It means that planning involves the following steps :i) a clear perception and definition of the problemii) determination of objectives and availability of resourcesiii) choice of activities and means for achieving the goalsiv) coordination of these mutually dependent means and activitiesv) formulation of programmesvi) choice of consistent and most effective methods of implementing the coordinatedprogrammesvii) systematic review and feed-back in order to continue and sustain the process.Thus planning is the process of devising a sound basis for a future course of action.Planning is needed for al l types of tasks, whether big or smalL It can be used bycountries at various stages of development and in different social and economicconditions. Planning has to be flexible, dynamic and adaptable. It involves variousmethods for the achievement of defined objectives. These methods are based onforesight and clarity of goals.

7.3 NEED FOR PLANNINGThe role of planning varies according to the social and economic conditions prevailingin a country. Planning plays a very crucial role in'the developing countries. The needfor planning arises on account of the nature, magnitude and complexity of variousproblems persisting in a system. Planning has sewera1 advantages.Planning Enables Comprehensive and Sciendflc Understanding of ProbiemsPlanning enables, though does not necessarily ensure the emergence of comprehensiveand scientific understanding of the problems of a system. In the context ofdevelopment planning, it is essential that a comprehensive and meaningfulunderstanding of underdevelopment and the factors, forces and processes which holdback progress is arrived at. This has to be the first step of development planning andit stresses upon the need for having a systematic planning mechanism.Revendon of Wartage and Improvement in ProductivityOn the basis of a comprehensive and scientific understandingof the problems,planning plays a crucial role in assessment, mobilisation and appropriate utilisation ofthe resources available. It prevents underutilisation, mimtilisation and inappropriateallocation of resources.Highiights the Ron and Conr of Variour DeclsionrOn account of extension of the field surveyed, sectorally and spatially, in order toarrive at decisions, planning plays a useful role. It highlights the externalrepercussions of various decisions. It brings out both the positive and negativedimensions of thedecisions and enables the planners to take steps to make use ofeither the positive effects or to lessen the negative effects of decisions.Increase the Rationaiity of the SyrtemPlanning plays a very impoltmt role in increasing the rationality of the system byavoiding arbitrariness, duplication, inconsistency, neglect of collective and long-terminterests. As a result, many of the defects of decentralised, uncoordinated decisionsbaaed laxgely on the motivation of individual gain can be rectified by planning.Preventa Incondrteney of Indiddad ~ e d r i o & n Interconnected MatterrThrough planning it is possible to combine in a mutually consistent way collective

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decision-making in areas where minute details, local conditions and frequentlychanging situations have to be taken into consideration.Brings about Structural ChangePlanning, rhrcugh collective decision-making and direct or indirect control over socialresources, enables the country to undertake large tasks and bring about changes in thestruzture or me syskzi. Through planning, motivational and informational handicaps,which are the characteristic features of uncoordinated decisions, can be av oide dEnables O rderly Reconclliatlon of C onflicting Interests?!YK play an important role in ushering an orderly change and preventing counter-nrductive conflicts from emerging after the decisions are taken. It invites suchconflicts in advance s o that efforts towards their reconciliation may be made at theearlit-ct. Thus, by ensuring in advance that the various planned activities and changesare mutually consisten: plans prev ent wastage of resources and efforts.Therefore, planning is a very crucial com ponent of any system oriented towardsbringing about social and ec onom ic development. Planning has to play an activeorganisationa l and dec isian-making role from the stage of con ception to the finalimplem ectatim and evalu ation of the schemes. It facilitates socio-economic change inaccordan ce with pre-dztermined objectivee in a most effective and rational manner.As we have read in tlie previous units of this block, India inherited a stagnanteconomy marked with abject poqerty and lopsided growth. The nature of the tasksand changes essential for d e v e l~ p m e ~ 't the time of Independen~ewas such, that itcould not have been hanaled =.*ithou, ,]per and concrete recourse to pla mh g.Private enterprises were not in a position to make full use of econom ic and humanresources. Agra rian relations, sm all size of land holdings, fragmented holdings, heavyindebtness of the farmers, persistence of low productivity m ethods of production hadled to agricultural backwardness. W ithout a base of productive and prospero usagriculture, which was the mainstay of more than two-thirds of Indians, there was nopossibility of mod em indu strial growth. The ruin of Indian handicrafts and absence ofcottage industries aggravated the crises further. Th is called for a systematic planningprocess.Mod em infiastructural facilities for making use of natural resources, humanresources, science and technology, international trade and econo mic relations and fordirectly meeting the need for various social services was not developed in a way andto an exten t conducive to developm ent. The colon ial state neglected these vitalinvestmen ts and drain ed India of her precious resources. Winning of freedom,unification of he co untry after partition, institution of Sovereign, DemocraticRepublican Constitution made it clear that there was an urgent need for planning as aconsciously adopted me ans of economic org anisation and decision-making with acertain inevitable degree of m tr al is e d control. The state had to intervene in order toaugment the resources for development. These tasks were not performed by thebureaucracy during the colonial d e . Thus without conscious choice, coordination ofactivities, large scale mobilisation of resou rces and centralised efforts, the problemsfacing the cou ntry at the time of Indepen dence could never have been tackledproperly. Planning, therefore, became a method of responding to the multifaceted,interrelated and stupendous tasks of development.

Check Your Progress 1Note : 1) Use the space given below for your anbwers.2) Check your answers with those given a t the end of the unit.

1) What is meant by planning ?

Rolc of Planning

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Development Strategy andPlannins 2) Discuss the need for planning in a developing country like India......................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MACHINERY FOR PLANNING IN INDIAIn a country like India where the bulk of the means of production are owned byprivate individuals, planning should be such that it regulates and controls privatesocieeconomic activities that contribute to development and is consistent with theaims and actions of public policy. Planning in India aims at ensuring social andeconomic development for the basic objectives laid down in our Constitution.As mentioned in unit 6, Indian planning may be tenned as development andregulatory planning in a mixed economy framework. It means that it is a planningprocess for both public and private sectors. To understand the nature of planningpmass in the country, we must have an idea about the evolution of planning in Indiaand different institutions involved in plan fonnulation and implementation.7.4.1 Evolution of PlanningPlanning was not an unfamiliar concept for I d a n leaders when freedom dawned in1947. Awareness and hportana of planning was clearly visible even in the preIndependence period. In 1936,Dr. M.Visveswarayya had published an essay on thedesirability and feaaibility of p l m h g for industrialisation. In 1938, NationalPlanning Committee under the chairmanship of Jawahdal Nehru did substantialwork in collecting material lbr pl.nning Later in 1944, the government established aPlanniq and Development Board A Planuing Advisory Board was also constitutedin 1946. These preIn&pendence efforta stress upon the unity of approach that ourleaders possessed for the achievement of common goals. After Independena, asystematic process of planned development was initiated Since then our plans havebeen trying to pramate balanced socieeconomic devebpment and welfare of Indianpeople-7.4.2 Inatitations Earned In PlanningThere are various institutions that are involved in plan formulation, implementation,monitoring and evaluation. The Natiohal Development Council (NDC), PlanningCommission together with its working p u p s and advisorypanels, State PlanningBoards, District Planning Cells, Planning Cells in Central and State ministries andParliament are involved in this effort. Association with private sector is also securedthrough various Development Councils a d epresentatives of Commerce andIndustry. It is a multi-stage, multi-level and multhagency planning system.Planning Commission is a multi-member body which was established by the Cabinetresolution of'March 15, 1950. Its objectives and hc tions are to make an assessmentof the resources of the country, investigate possibilities of increasing these resources,formulate a plan for the moot effective and balanced utilisatioa of the country'sresources. Planning Commission has to define the stages in which the plan should becarried out, propose the allocation of r m u r a s for due completion of each stage. Itdetermines the conditions and machinery fa the successful implementation of theplan by pointingout the factors hindering economic development. PlanningCommission also has to review from time to time the progress achieved in theexecution of each stage of the plan and recommend changes where required.For evaluation of the plans, we have Programme Evaluation Organisation (PEO). Itwas set up in 1952. It works under the general guidance of Planning Commission.The main functions of PEO are to undettake evaluation studies, to assess the

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beneficiaries and the socieeconornic structure of the society and to give advice toState Evaluation Organisation that are involved with plan evaluation at the statelevel.Another very important organisation that helps in planning is the NationalDevelopment Council (NDC). The NDC acts as a bridge between the uniongovernment, Planning Commission and state governments. It prescribes guidelines forthe formulation of the plan. It considers the plan formulated by the PlanningCommission. It also considers important questions of social and economic policyaffecting national development. I t reviews the work of plan from time to time andrecommends measures necessary for the of plan objectives. F e NDC riesto secure people's participation in planning and pays attention to the improvement ofadministrative services and development of less advanced regions. .Each state has a State Planning Board or State Planning Cell to help in planformulation. It prepares a plan for the state with the help of ministries anddepartments in the state, representatives of districts and members of District PlanningCells. The State Planning Board calls for the various projects from the district, whichare then combined on the basis of priorities and fmancial implications and a state planis prepared and placed before the Planning Commission.The districts have District Planning Cells for plan formulation. Soon after statebudget is voted in the assembly, the various departmental heads prepare a district-wise break up of the outlays provided in the plan. The district authorities togetherwith District Planning Cells prepare a district plan which is an aggregation ofdepartmental schemes received from the state government.

The Constitution of India includes the subject of 'social and economic planning' in theConcurrent List India draws up plans in the form of five year programmes. Theformulation of five year plan is a time-consuming and complex process. This processcan be divided into five stages.Rnt Stage :This stage begins three years before the commencement of a new plan.Studies are undertaken by the Planning Commission to examine the state of economyand scrutinise the problems. Tentative conclusions out of this effort are arrived at anda framework of the plan is drawn This framework is submitted to the central cabinetAfter this it is placed befm the NDC. The NDC indicates the rate of growth andbroad priorities to be assumed for the purpose of W e r work on the plan.Second Stage: Planning Commission works out general dimensions of the plan in thelight of guidelines given by the NDC and a draft memorandum outlining the featuresof the plan is prepared.Third Stage :Drafi memorandum is placed before the NDC and after NDC'sconsideration, the work for preparation of draft outline of the plan starts. This draftplan is open for the comments of state and central ministries. After NDC's approval,this plan is circulated b r public discussion. It is then considered by InformalConsultative Committee of Parliament and also by Parliament as a whole.Fourth Stage :Planning Commission holds detailed discussions with centralministries and state governments regarding their plans. Discussions are also k l d withnpresentatives of mJor organised industries in the private sector. PlanqhgCommission then prepares a paper in which principal features of the issues needingmore consideration are outlined. This paper is placed before the NDC nd centralcabinet for their consideration. Final report on he plan is based on the conclusionsreached on this paper.Fiicb S w A draft of the final report on the plan is considered by central ministriesand state governments and then submitted for approval of the NDC and centralcabinet After their approval it is presented before Parliament for discussion andapproval.

Role of Plannin

After the plan is formulated, it is divided into annual plans for convenient

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Development Strategy and governments. Planning Commission and the NDC are not involved in planPlanning implementation. Planning Commission only determi~eshe machinery for proper

implementation of plan, it does not by itself carry out the formulated plan. Monitoringand evaluation of plans is done by the Planning Commission and the NDC throughProgramme Evaluation Organisation and other agencies engaged in appraisal of plans.Check Your Progress 2Note : 1) Use the space given below for your answers.

2) Check your answers with those given at the end of the unit.1) What are the functions of Planning Commission ?

2) Discuss the process of planning in Inii;

- -7.6 LIMITATIONS O F PLA NNING INTHE COUNTRYOur Five Year Plans have broadly aimed at increase irl growth rate, extensivemodernisation, establishment of socialistic pattern of society, attainment of self-reliance, up!iftment of backward classes, balanced growth, systematic regionaldevelopment., removal of poverty and promotion of heavy and capital goods industries. Allthese objectives wil: be discussed in detail in unit 8 of this block But here it is essential tonote that despite four decades of planning, we have not been able to solve theproblems of unemployment, under-employment, rise in prices and poverty. Regionalineqiialities continue to persist. We have not been able to utilise our manpowerresources to the maximum extent Our growth rate has been inadequate.Concentration of economic power has increased. Thus there has been a wide gapbetween targets m d achievcments. These problems can be attributed to severallimitations in our planning process.Administrative Refo~msCommission (ARC) in its Repdrt on the Machinery forPlanning ( 1968). noted that there was a lack of proper coordination between thePlanning Commission and the private sector. Private sector is only involved at thetime of plan formulation, even here the consultations between the two are held veryrs:,ely. The ARC criticised the functioning of Central Advisory Council on industriesand various Development Councils which have been created by the government forconsultations with the industrial sector. It noted that these councils suffer from lackof proper leadership and technical support and thus have been generally ineffective.The Planning agencies also suffer from lack of trained personnel with requisite calibreand experience. There is lack of coordination between the re!ated sectors of economyat the time of plan formulation and implementation. Moreover, implementation of theplans has been rather inadequate. While form'ulating plans, the practicability of theschemes must be kept in view. Proper attention has to be paid to agencies and peopleinvolved in implementation and evaluation of plans, and a proper feedbackmechanism has also to be established.Economic development alone will never lead to overall development of the country, it

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is, therefore, imperative to bring about structural and institutional changes in thesociety. Usually it has been found that there is an absence of realism in planning.Though agricultural production has increased, process of land reforms has been veryslow, the small and landless labourers continue to live in poverty. Planning in India isnot geared towards undertaking continuous and scientific investigation of socialobstacles such as the kinship and hereditary relations based on caste system whichcome in the way of economic reforms and development. Financial incentives toreduce backwardness are not enough. Certain non-economic, political and socialfactors have to be ke pt in mind.Our plans have not been able to adhere to time schedules, as a result there have beencost overruns. The process of execution of plans is so slow that the financial outlaysfor pl an s become insufficient after a certain period of time. Expend iture increasesbecause with the passage of time the prices go up. There is no emphasis on sense ofurgency in plan implementation an d evaluation. Supervision of plans a t all the levelshas been ineffective. Plan execution and evaluation is marked with red tape andwastage of resources.Regional and Area Planning in the strict sense of the term has never been introducedin India. Planning in India has been sectoral. Plans at the state, district, block andvillage levels have just b een m ere break-ups o f sectoral plans. P lanning at the grass-root level is very weak. The district, block and village bodies merely collect data forthe sta te and ce ntral governments. N o full-fledged planning is done a t these levels.Usually the policies are handed over from above and people at the local levels arerequired to fill in this framework. Participation of people and voluntary agencies inplanning has also been quite inadequate.7.7 CONCLUSIONThough our planning process is facing several problems, the situation is not all thatgrlm. W e have been able to maintain a moderate growth rate. There has been agrowth of infrtstruc ture and ba sic industries. W e are no longer dependent on foodimports. Education, social services and human capital has developed and expanded tosome extent. Domestic investment has increased. There has been development ofeconom ic infrastructure, energy resources, irrigation works and trans port facilities.Industrialisation nas been quite impressive. There has been a diversification andexpansion of India's industrial capacity with public secto r playing a leading role.Indigenous production of consumer items has also gone up.Proper emphasis on administrative research and evaluation of plans, simplication ofprocedures of work to avoid delay and reduce costs, better coordination betweenvarious sectors of economy on interconnected tasks, better trained personnel anddevelopment of grassroot planning c an remove th e bottlenecks confronting theplanning system in India.No effec;ive planning can be possible without people's participation. People have tobe not just the goals but also the means of development strategy. People and voluntaryagencies have to be involved in p lan formulation and decision-making, implem entationof planned activities, distribution of benefits of development and monitoring andevaluation of plans.

Check Your Progress 3Note : 1) Use the space given below for your answers.2) Check your answers with those given at the end of the unit.

1) Briefly discuss the objectives of planning in India.

Role of Planning

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Developm ent Strategy and 2) What are the limitations of our planning process ?Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 .8 LET U S SUM U PThus we saw that planning is an indispensable component of any country committedto the goals of socieec ono mic de velopm ent Plan formulation, implementation andevaluation calls for the participation of various planning agencies, central an d stateministries, Parliament, private sector and voluntary organisations. Our plans havealways aimed at bringing about social, economic and structural changes in the countryin order to attain systematic and balanced growth. The unit has analysed the systemof planning in India by explaining the importance of planning, evolution of planningand the nature of planning process in the country. India's plan objectives and variousconstraints behind proper fulfilment of these goals have also been discussed inthe unit

7 .9 K EY WO RDSEconomic Overheads :Building of economic overheads means development ofnetwork of roadways, construction of irrigation and hydreelectric works, developmentof railways and other capital intensive projects which are economic assets for thecountry.Fragmented Ho ldings : hese are very small holdings of land that are formed due tosubdivision and fragmentation of land into small parts. T his type of fragmentationleads to wastage of agricultural land, rise in cost of agriculture, and underutilisationof labour and capitals,Kinship R elations : Family relations or relations between close and distant relativesthat govern the social behavioural pattern. They are rooted in the caste system ofIndian society.Regional Planning : t involves coordination of various se ctors of the economy in aspecific region, these sectors have to be correlated with certain natural and economichomogeneities.Sovereign Socialist Secular Democratic Republic :The preamble (serving theintroduction) to our Constitution declares the ultimate sovereignity of the people ofIndia and that the Constitution rests on their authority. The Constitution envisagesthat the state representatives have to be elected by the people. All the religions in thecountry will have the equal status, prestige and respect from the state. TheConstitution also envisages a democratic form of government infused with the spirit ofjustice, liberty and equality. The words 'secular' and 'socialist' were inserted in thepreamble of the Constitution by the 42nd A mendment A ct, 1 976 .

7.10 S O M E U S E F U L B O OK SAvasthi, A. a nd S .R Maheshwari. 1988. Public Administration ;Laxmi NarainAgarwal : Agra.Jain , RB. 1976. Contemporary Issues in Indian Administration ; VishalPublications : Delhi.Sarup, A and S. Bramhe. 1990. Planning for the Millions ;Wiley Eastern : NewDelhi.Clppal. J.S. 1984. Indian Economic. Planning ;Macmillan : Delhi.

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7.1 J ANSW ERS TO-CHECK YOUR PROGRESSEXERCISESCheck Your Progress 11) Your answer should include the following points :Planning is a systematic prathought out action

It involves clear perception of the problem, determination of objectives,choice of means, formulation of a plan, ascertaining suitable machinery tocarry it out and proper evaluation of the planPlanning is needed for all kinds of tasks committed towards development.

2) Your answer should include the following points :India inherited a stagnant economy.Private sector was not in a position to solve the problems prevailing at thattimeThere was a need for development of agriculture and industry, infrastructuralfacilities also had to be developedPlanning enables a comprehensive understanding of problems, avoids wastageand leads to increase in productionPlanning increases the rationality of the system, prevents inconsistency ofindividual decisions and brings about structural change.Check Your Progress 2

1) Your answer should include the following points :Planning Commission assesses the resources availableIt formulates plans for effective utilisation of resourcesDefines the stages in which plans should be carried outAllocates resources and determines the machinery for plan implementationPoints out the factors hindering development

2) See Section 7.5Check Your Progress 31) Your answer should include the following points :Plans aim at strengthening the socialistic pattern of society

They aim at increasing the growth rateBringing about balanced regional developmentAccelerating balanced gmwthProvision of employment opportunitiesUpliftment of backward classesPromotion of self-reliance.

2) Your answer should include the following points :lack of coordination between related sectors of economy at the time of planformulation and implementationAbsence of grassroot planningLack of people's participationAbsence of regional planningIncrease in expenditure due to non-adherence to time schedules.

Role of Planning