Economic planning means thinking ahead and organizing resources to meet clear goals for growth and welfare within a set time. In India, planning combines goal-setting (what), strategy (how), resource use (with what), and implementation/monitoring (by whom, when). Before independence, several influential blueprints—Visvesvaraya Plan, Congress/NPC Plan, Bombay Plan, Gandhian Plan, People’s Plan, and Sarvodaya Plan—shaped India’s later Five-Year Plans.

Economic planning in India was designed to address socio-economic challenges like poverty, unemployment, inequality, and underdevelopment. It aims at achieving growth, modernisation, self-reliance, and social justice. Over time, planning evolved into different models—democratic vs totalitarian, centralised vs decentralised, directive vs indicative, financial vs physical, functional vs structural, comprehensive vs partial—each reflecting different approaches to organising and managing resources.

Central Plans are nationwide plans formulated and funded by the Union Government. India used three major central plan instruments: Five-Year Plans, the Twenty-Point Programme, and MPLAD. Among these, Five-Year Plans were the backbone of India’s development strategy—setting goals, choosing sectors to prioritise, allocating resources, and tracking outcomes.

After the early Five-Year Plans, India’s central planning moved through the Rolling Plan, the reform years of the 6th–8th Plans, consolidation in the 9th–10th, ‘inclusive growth’ in the 11th, and ‘inclusive & sustainable growth’ in the 12th. The period saw major shifts: from rigid five-year blueprints to flexible rolling targets, from state-led industry to liberalisation, and from input targets to measurable outcomes.

The Twenty-Point Programme (1975, restructured later) was a central poverty alleviation and rural quality-of-life initiative, while the MPLADS (1993) scheme empowers Members of Parliament to recommend development projects in their constituencies. Both aimed to improve basic services, but faced criticisms on effectiveness, misuse, and conflict with democratic principles.

India’s planning built core capacity (infrastructure, industry, irrigation, human capital) but struggled with weak long-term perspective, regional imbalance, over-centralisation, job-poor strategies, PSU dominance, and an industry-first bias over agriculture. Post-1991 reforms and the 73rd/74th Amendments nudged planning toward decentralisation, private participation, outcome-based monitoring, and inclusion—yet gaps remain in data quality, local finance, accountability, and execution.

Multi-level Planning (MLP) means planning is not only done at the Centre; it happens at every tier—nation, state, district, block and village—with each level both guiding the level below and learning from the level above. It aims to make plans locally relevant, faster to execute, and more accountable through function sharing, fiscal and administrative decentralisation, and people’s participation.

Decentralised planning means decisions about development are taken closer to the people—by local governments (Panchayats/Urban Local Bodies) with community participation. It aims to make plans more relevant, faster to execute, and accountable by sharing functions, funds, and functionaries across tiers, especially after the 73rd/74th Constitutional Amendments.

The Planning Commission was set up by a Union Cabinet resolution on March 15, 1950 as an extra-constitutional, advisory body to steer India’s planned development. Chaired by the Prime Minister with a full-time Deputy Chairman (cabinet rank), it assessed resources, set priorities, prepared Five-Year Plans, and worked with the National Development Council (NDC) for approval and coordination. Over time it was criticised for centralisation, delays, and weak federal accommodation.

NITI Aayog, or the National Institution for Transforming India, was established in 2015 as the government’s premier policy think tank to replace the Planning Commission. Unlike the Planning Commission, which followed a centralised command economy model, NITI Aayog focuses on cooperative and competitive federalism, evidence-based policymaking, and providing strategic advice to both the Centre and States. It is an executive body, not a constitutional or statutory institution.

Since its creation in 2015, NITI Aayog has moved away from the top-down, fund-allocating approach of the Planning Commission. Instead, it has focused on outcome-based monitoring, cooperative and competitive federalism, innovation promotion, and providing evidence-based advice. Its initiatives have covered education, health, water, agriculture, innovation, digital payments, and more, making it a central think tank for India’s developmental journey.

While NITI Aayog was envisioned as a dynamic think-tank for policy innovation, it has often been criticized for acting more like a mouthpiece of the government rather than an independent advisory body. In contrast, the Economic Advisory Council to the Prime Minister (EAC-PM) functions as a more neutral body providing independent economic advice.

The economic reforms of 1991 marked a turning point in India's economic history. Facing a severe balance of payments crisis, India shifted from a state-controlled, centrally planned economy to a more open, market-oriented system. These reforms were based on three pillars – Liberalisation, Privatisation, and Globalisation (LPG).

After the 1991 crisis, India introduced wide-ranging reforms in multiple sectors such as industry, finance, taxation, foreign exchange, trade, and investment. The focus was to increase efficiency, reduce government control, promote private participation, and integrate India into the global economy.

Privatisation refers to transferring ownership or management of government enterprises to private hands, often through disinvestment or strategic sale. Globalisation is the process of increasing interdependence and integration of economies, societies, and cultures across borders. Both processes became central features of India's economic reforms after 1991.

Economic reforms in India progressed in stages after 1991. Second-generation reforms (2000 onwards) focused on dismantling price controls, improving PSUs, and reforming government institutions. Third-generation reforms (2002–07) emphasized inclusive growth and strengthening Panchayati Raj institutions. Fourth-generation reforms (post-2014) highlighted digitisation and IT-enabled governance. These reforms collectively impacted GDP growth, employment, agriculture, industry, fiscal balances, and foreign trade.