Why this matters now
Planning history is tested for the Planning Commission vs NITI Aayog shift, the plan models, and the milestones. It frames the broader story of India’s mixed economy and reforms.
The Planning Commission and Five Year Plans
The Planning Commission was set up in 1950 (by executive resolution, not the Constitution), and the First Five Year Plan began in 1951. The plans set national priorities and allocated resources, reflecting the Nehruvian model of a state-led, mixed economy.
Plan models and milestones
- The First Plan focused on agriculture (Harrod-Domar model);
- The Second Plan emphasised heavy industry (the Mahalanobis model);
- Later plans addressed poverty (“Garibi Hatao”), the Green Revolution, liberalisation (post-1991), and inclusive growth;
- The Twelfth Plan (2012-17) was the last Five Year Plan.
The shift to NITI Aayog
In 2015, the Planning Commission was replaced by the NITI Aayog (National Institution for Transforming India). NITI Aayog is a think-tank and policy-advisory body — it does not allocate funds (a key difference from the old Commission). It promotes cooperative and competitive federalism, evidence-based policy, and acts as a knowledge hub, with the Prime Minister as Chairperson.
Why the shift
The change reflected a move from centralised, command-style planning (suited to an earlier era) to a liberalised, market-oriented economy needing flexible, bottom-up and state-driven development — with the Centre as a facilitator rather than an allocator.
UPSC angle
Know the Planning Commission (1950, executive body) vs NITI Aayog (2015, think-tank, no fund allocation), the First (agriculture) and Second (Mahalanobis/heavy industry) plan models, and that the 12th was the last plan.
Frequently asked questions
When was the Planning Commission set up?
In 1950 by an executive resolution; the First Five Year Plan began in 1951.
What is the Mahalanobis model?
The strategy behind the Second Five Year Plan, emphasising rapid industrialisation through heavy industry.
What replaced the Planning Commission?
The NITI Aayog in 2015 — a policy think-tank and advisory body that, unlike the Commission, does not allocate funds.
How is NITI Aayog different from the Planning Commission?
NITI Aayog is a think-tank promoting cooperative federalism and evidence-based policy; it advises rather than allocates resources, with the PM as Chairperson.