Gandhian Plan which based upon Gandhian philosophy was put forward by Shri S.N. Agarwal of Wardha. The outlay of the plan was estimated Rs. 3500 crores only and it sought to set up a decentralized economy with self-sufficient villages and Industrial production. It laid emphasis on small scale industries and agriculture. But its scheme of financing was unsound. This plan was criticized as inconsistent and insufficient.

Sarvodaya Plan

It was drafted by Jaiprakash Narayan. The plan was mainly inspired by the Gandhian Plan provided by S N Agarwal & the Idea of Sarvodaya presented by another Gandhian leader Vinoba Bhave.

The sarvodaya plan put forward and emphasized the importance of agriculture and village industries especially small-scale textile & cottage industries in the process of economic development. The plan also recommended the Luddite approach and was pessimistic towards the usage of foreign technology.

The most important and well acclaimed part of the plan was its emphasis upon land reforms and decentralized participatory people planning.


Another plan was prepared by the late M.N. Roy (a ten year plan) called the ‘People Plan.’ It was different from the Bombay plan in methodology and priorities. Its chief emphasis was on agricultural and consumer goods industries through collectivization and setting up of state owned industrialization. The total outlay was of Rs. 15000 crores. It also advocated the nationalization of land. The plan was ambitious as it could not properly mobilize the resources. Therefore, it was totally impracticable.


The government of India during June, 1941and appointed a reconstruction committee of the cabinet with Viceroy as Chairman and the members of the Executive Council as Members. In June, 1944 Planning and Development Department was created under a separate member of the Executive Council for organizing the planning work in the country. To assist the department, there was a Planning and Development Board consisting of Secretaries of economic department. It suggested to State Governments that special priority should be given to schemes for training technical personnel. In 1946 the work of planning had practically been completed and the department of planning and development was abolished.

ADVISORY PLANNING BOARD (1946) The interim Government was installed on 24th August, 1946 and the Advisory Planning Board.

The Board submitted its report in January, 1947. Its major recommendations were:

  1. a) The increase in production that is essential could be secured only through a well-considered plan.
  2. b) There must be control on the use of energy sources, control over distribution and price and as well leases and sub leases.
  3. c) Mineral rights in the permanently settled areas in Bengal and Bihar should be acquired by the state

It also recommended a consultative body of 25 to 30 members which would meet half yearly or quarterly to advice on problems and receive progress reports. Its recommendations were feasible and reasonable but still it also suffered from limitations. After independence the plan became inadequate as a result of the changed social and economic conditions due to partition. Even then its recommendations on techniques were supposed to be worthwhile.

Planning from Independence till the Establishment of the Planning Commission (1947-50)

At the dawn of the 15th August, 1947, India was free from the British Imperial Rule. The Constitution of India came into force on 26th January 1950. The Constitution contained certain ‘Directive Principles of State Policy’, which, though not enforceable through the court of law but were regarded but were regarded as fundamental to the governance of the country. The working Committee of the Congress Party passed a comprehensive resolution on planned economy for the country and the appointment of the Planning Commission. The resolution states “ The need for a comprehensive plan has become a matter of compelling urgency in India now owing to the ravages of Second World War and the economic and political consequences of the partition of the country which followed in the wake of achievement of freedom and steady worsening of the economic situation in India and the World. ” Thus the National Planning Commission was established on 15th March, 1950.


India has adopted a path of development, which is known as Socialist Path and Mixed Economy, On the one hand, India has encouraged private business and industry and on the other it has almost full control, at least in principle, over all the major entrepreneurial and business activities. The Planning Commission was set up by a Resolution of the Government of India in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community. The Planning Commission was charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective 7 and balanced utilization of resources and determining priorities. It was entrusted with the work of economic and social development as envisaged in the preamble, the fundamental rights as well as Directive Principles of State Policy of the Constitution.

India is a mixed economy giving shape to the constitutional goal of articles:

Article 38: Ensuring welfare of the citizens by – striving to minimize the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities among all.

Article 39: Certain principles of policy to be followed by the State: The State shall, in particular, direct its policy towards securing.

(a) That the citizens, men and women equally, have the right to an adequate means to livelihood;

(b) that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good;

(c) That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment etc.

In order to achieve these goals India adopted mixed economy model primarily with centralized planning in initial phase. After establishing large public sectors which protected the economy and people it gradually shifted towards market aspects and permitted entry of private sector during 1990s liberalization. Now both the systems operate each with their respective roles and balance out each other.

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