Topic – Indian Economy and issues relating to planning
4) Planning has had an immense impact on economic development of India and should continue to play a key role in economic decision making in the country. Analyze. (250 words)
Why this question
The article describes the role that planning played in the initial years of economic development in India which laid the foundation for the successes enjoyed in the later years. This article discusses the issues with planning process in post LPG era and what the way forward must be. At a time when one of the criticisms of Niti Ayog has been the way it has handled planning, this issue is relevant for mains.
Key demand of the question
The question expects us to analyse how planning played a key role in bringing India on to the path of industrialization and how India became a model for other third word countries. Next, we need to analyze the role played by planning in current years and the issues with it. Finally, we need to discuss what sort of economic planning do we envisage in the coming years.
Analyze – When asked to analyze, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.
Structure of the answer
Introduction – Explain the nature of planning activity carried out in India in the form of five year plans that took place in India since independence.
- Discuss how planning helped in industrialisation of the country in the early 1950s. This involved the setting up of public sector units (PSUs) in diverse areas of manufacturing; research institutions in cutting-edge technologies of the time such as space and atomic energy; and centres of higher learning, including the Indian Institutes of Technologies (IITs).
- Explain that through planning and foraying in to sectors such as machine building and nuclear research, which needed capital and technology more critically than labour, India was also challenging a deeply held orthodoxy in economic theory. Also highlight the fact that planning did very little to remove the hurdles to the growth of agriculture and small-scale industries.
- Examine the relevance of planning in post LPG era where the economy is more governed by market forces and role of planning overall has diminished.
- Discuss issues involved in the planning process in current time and give suggestions on how it can be used as a strategic tool.
Conclusion – Give your view on the relevance of planning in current context and discuss way forward.