UPSSSC PET · Bite-size lessons

Planning Commission & Five-Year Plans (1947-1991)

About 7 min · Indian Economy · English

Time worked out from the lesson's 513 words at 150 words a minute, plus a minute for each question.

India adopted centralized economic planning immediately after independence, establishing the Planning Commission in 1950 to formulate Five-Year Plans modeled on Soviet-style directed development. This era (1947-1991) represents India's "command economy" phase, where the state took primary responsibility for resource allocation, industrialization, and poverty alleviation. For UPSSSC PET, you must know the key objectives of each plan, the Mahalanobis model's role in shaping industrial policy, and major achievements like the Green Revolution and establishment of public sector enterprises. Questions typically ask about plan periods, objectives, model architects, and specific plan outcomes.

Key ideas

• Planning Commission (1950): Extra-constitutional advisory body created to assess resources, formulate plans, and monitor progress. Dissolved in 2015, replaced by NITI Aayog. Comprised ministers, economists, and state representatives.
• Five-Year Plans: Plans with specific targets for growth, employment, and sectoral development. First Plan began in 1951; Eighth Plan ended in 1997. The 1947-1991 span covers First through Seventh Plans.
• Mahalanobis Model (Second Plan): Proposed by statistician P.C. Mahalanobis, emphasizing capital goods and heavy industries over consumer goods. Based on two-sector growth theory—dividing economy into capital goods and consumer goods sectors. This model shaped India's industrial policy for decades.
• Public Sector Dominance: Plans prioritized public sector enterprises (PSUs) in core sectors like steel, coal, power. Industrial Policy Resolution 1956 reserved 17 industries exclusively for the state, creating giants like SAIL, BHEL, HAL.
• Import Substitution Industrialization (ISI): Strategy to reduce dependence on imports by producing goods domestically. High tariff walls protected nascent industries but also reduced competitiveness and quality.

Watch out for

• Confusing Mahalanobis with Harrod-Domar: Students often mix up models. The First Plan used the Harrod-Domar growth model (capital-output ratio focus); the Second Plan used the Mahalanobis model (sectoral focus on heavy industry). Remember: Mahalanobis = heavy industry = Second Plan.
• Attributing Green Revolution to Second Plan: The Second Plan was about industrialization. Green Revolution came in the Fourth Plan (late 1960s–early 1970s). Don't confuse industrial revolution with agricultural revolution.
• Forgetting Plan Holidays: The period 1966-69 had no Five-Year Plan—only Annual Plans due to crises. Students assume plans ran continuously; they didn't.

Quick reference

• Planning Commission (1950): Top advisory body for formulating Five-Year Plans; dissolved 2015.
• First Plan (1951-56): Agriculture focus, Harrod-Domar model; successful.
• Second Plan (1956-61): Mahalanobis model, heavy industry, steel plants, IPR 1956.
• Third Plan (1961-66): Wars and droughts; called the plan that failed.
• Fourth Plan (1969-74): Green Revolution, bank nationalization, self-reliance.

Check yourself: 3 questions

This lesson is cut from the topic's note, not rewritten. Fact-checked on 17 Oct 2026: an AI-assisted check of this note against cited sources; the errors it found were corrected that day. Some errors may remain. The questions are from Shishya's validated question bank.

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