Five-Year Plans

Story hook

15 March 1950, Cabinet meeting, New Delhi. Nehru pulls a piece of paper from his pocket. It is a memorandum proposing a Planning Commission. Sardar Patel, suspicious of central planning bodies, raises questions about constitutional status. Nehru replies that the Commission will be an extra-constitutional body, advisory to the Cabinet. The note is approved.

Within nineteen months, Prasanta Chandra Mahalanobis — a statistician trained at Cambridge — submits a mathematical model for Indian planning. He proposes that India invest disproportionately in heavy industry + capital goods sector, even at the cost of short-term consumer welfare. The argument: only domestic capital goods can break colonial dependence. The Mahalanobis Model becomes the theoretical core of the Second Five-Year Plan (1956). Bhilai. Rourkela. Durgapur. The temple-cities of modern India.

For the next 65 years, Indian planning would oscillate between two visions — Mahalanobis's state-led heavy industry socialism vs the Bombay Plan (1944) signed by Tata + Birla

• Lala Shri Ram that envisaged a mixed economy with leading private sector role. In August 2014, Prime Minister Modi abolished the Planning Commission. NITI Aayog replaced it on 1 January 2015. Sixty-five years of central planning gave way to cooperative federalism — but the Mahalanobis-Bombay debate has not ended.

Why this matters for UPSC

• Prelims: Plan-by-plan focus, year + duration, growth targets vs achievements; appeared 2015, 2018, 2020, 2022.
• Mains GS-III: Indian economic development model; mixed economy debate.
• Mains GS-I: Nehruvian socialism as nation-building ideology.
• Interview: NITI Aayog vs Planning Commission — substantive shift or rebranding?