# Five-year plans: the Planning Commission, the twelve plans and NITI Aayog

> These study notes explain Five-year plans for the Group 4 / VAO (Combined Civil Services Examination-IV) exam in plain language: the same reviewed notes the TNPSC Guide app shows, published by our editors with their source. Read the key points first, then practise the unit's questions. For exam facts such as dates and vacancies, always check tnpsc.gov.in.

Last updated: 2026-11-02 · By TNPSC Guide editorial team
URL: https://www.tnpscguide.com/exams/group-4/notes/gs-economy-five-year-plans

## Why the exam asks this

The syllabus asks plan models, their assessment, the Planning Commission and NITI Aayog. The 2024 paper asked who is the executive head of NITI Aayog (Q170). Each plan's years, model, aim, target and achieved growth suit questions. The targets and growth figures are the textbook's; keep them with their years.

## Beginnings of planning

Sir M. Visvesvaraya laid the foundation of planning in India (1934), describing a ten-year plan in Planned Economy for India. Other pre-independence plans: S.N. Agarwal's Gandhian Plan (1944), M.N. Roy's People's Plan (1945) and Jayaprakash Narayan's Sarvodaya Plan (1950). The 1948 industrial policy recommended a central planning body and a mixed economy. The Planning Commission was set up on 15 March 1950 with Jawaharlal Nehru as first chairman; the first plan period began on 1 April 1951. The main aim of planning is social welfare.

## Kinds of planning

Centralised planning is planning from above; decentralised planning by local bodies is planning from below. France ran indicative planning as the Monnet Plan from 1947 to 1950; China and Russia follow imperative planning. By length: one year is short-term, three to seven years medium-term (usually five), ten to thirty years long-term perspective planning. Hayek, in The Road to Serfdom, said central planning curbs people's economic freedom.

## The first three plans and the plan holiday

The First Plan (1951-1956), on the Harrod-Domar model, aimed at agriculture and beat its target with 3.6% growth. The Second (1956-1961), on Prof. P.C. Mahalanobis's model, aimed at industry: 4.1%. The Third (1961-1966), the Gadgil Plan, aimed at a self-reliant economy and missed its 5.6% target because of the China-India war. The India-Pakistan war and the Third Plan's failure led to the plan holiday of 1966-1969, with annual plans.

## The Fourth to the Seventh Plan

Fourth (1969-1974): stable growth and self-reliance; failed with 3.3% against 5.7%. Fifth (1974-1979): agriculture, industry and mining; 4.8% against 4.4%; drafted by D.P. Dhar, dropped a year early in 1978, followed by the Rolling Plan of 1978-79. Sixth (1980-1985): poverty removal and industrial self-reliance; 5.7% against 5.2%. Seventh (1985-1990): first to put the private sector above the public; 6.0% against 5.0%. Two annual plans followed (1990-91, 1991-92).

## The Eighth to the Twelfth Plan

Eighth (1992-1997): human resource development, the new economic policy; 6.8% against 5.6%. Ninth (1997-2002): growth with social justice; 5.6% against 7%. Tenth (2002-2007): aimed to cut poverty to 15% by 2012; 7.2% against 8.0%. Eleventh (2007-2012): faster, more inclusive growth; 7.9% against 8.1%. Twelfth (2012-2017): faster, more inclusive and sustainable growth; target 8%; the last plan.

**The twelve plans at a glance**

| | |
| --- | --- |
| First | 1951-1956; Harrod-Domar; agriculture; 3.6% (above target) |
| Second | 1956-1961; Mahalanobis; industry; 4.1% |
| Third | 1961-1966; Gadgil Plan; self-reliance; missed 5.6% |
| Plan holiday | 1966-1969; annual plans |
| Fourth | 1969-1974; target 5.7%, achieved 3.3% |
| Fifth | 1974-1979; target 4.4%, achieved 4.8%; dropped in 1978 |
| Rolling Plan | 1978-79 |
| Sixth | 1980-1985; poverty removal; target 5.2%, achieved 5.7% |
| Seventh | 1985-1990; private sector first; target 5.0%, achieved 6.0% |
| Annual plans | 1990-91, 1991-92 |
| Eighth | 1992-1997; human resources; target 5.6%, achieved 6.8% |
| Ninth | 1997-2002; growth with social justice; target 7%, achieved 5.6% |
| Tenth | 2002-2007; aim of cutting poverty to 15% by 2012; 8.0% target, 7.2% |
| Eleventh | 2007-2012; inclusive growth; target 8.1%, achieved 7.9% |
| Twelfth | 2012-2017; sustainable too; target 8% |

## NITI Aayog

The government decided on 13 August 2014 to set up NITI Aayog (National Institution for Transforming India) in place of the Planning Commission; it was created by a cabinet resolution on 1 January 2015. The Prime Minister is chairman; the vice-chairman is the executive head; the first vice-chairman was Arvind Panagariya. It fosters cooperative and competitive federalism and bottom-up planning, monitors and evaluates schemes, ranks states, and works as the government's think tank.

## Bank nationalisation

In 1969 the government nationalised 14 large commercial banks with deposits above 50 crore, and in 1980 six banks with deposits above 200 crore. The main aim was social welfare: more credit for agriculture, small and cottage industry, and banking in villages.

**Key years**

| | |
| --- | --- |
| Visvesvaraya's planning book | 1934 (class 12, page 284) |
| Planning Commission; first plan begins | 15 March 1950; 1 April 1951 (class 12, page 284) |
| Monnet Plan (France) | 1947-1950 (class 12, page 290) |
| Plan holiday | 1966-1969 (class 11, page 215) |
| Rolling Plan | 1978-79 (class 11, page 216) |
| Bank nationalisation | 1969 (14 banks); 1980 (6 banks) (class 11, pages 213-214) |
| NITI decision; formation | 13 August 2014; 1 January 2015 (class 12, page 291) |
| Last five-year plan | the Twelfth, 2012-2017 (class 11, page 215) |

> **Exam tip:** Memory hooks
Models: one Harrod, two Mahalanobis, three Gadgil; the first plan farms, the second builds industry. Three breaks: plan holiday 1966-69, Rolling Plan 1978-79, annual plans 1990-92. The Seventh put the private sector first. NITI: the PM chairs, the vice-chairman runs it.

**Easy to confuse**

| | |
| --- | --- |
| First / Second Plan | Harrod-Domar, agriculture; Mahalanobis, industry |
| Plan holiday / Rolling Plan | 1966-1969; 1978-79 |
| Above target / missed target | First, Fifth, Sixth, Seventh, Eighth; Third, Fourth, Ninth, Tenth, Eleventh |
| Planning Commission / NITI Aayog | 15 March 1950, first chairman Nehru; 1 January 2015, chaired by the PM, first vice-chairman Arvind Panagariya |
| From above / from below | centralised; decentralised |
| Indicative / imperative planning | France (Monnet Plan); China, Russia |
| Nationalisation 1969 / 1980 | 14 banks, above 50 crore; 6 banks, above 200 crore |

> **Exam tip:** Quick check
1. When was the Planning Commission set up? Answer: 15 March 1950.
2. Which model was the Second Plan based on? Answer: P.C. Mahalanobis's.
3. Which plan was called the Gadgil Plan? Answer: the Third.
4. Who is NITI Aayog's executive head? Answer: its vice-chairman (the PM is chairman).
5. How many banks were nationalised in 1969? Answer: 14.

Source: பொருளியல், மேல்நிலை முதலாம் ஆண்டு, தமிழ் வழி (Economics, Standard XI, Tamil medium; Samacheer Kalvi) (11ஆம் வகுப்புப் பொருளியல், இயல் 8 (இந்தியப் பொருளாதாரம் விடுதலைக்கு முன்னரும் பின்னரும்), பக்கம் 213-217; 12ஆம் வகுப்புப் பொருளியல், இயல் 11 (பொருளாதார மேம்பாடும் திட்டமிடலும்), பக்கம் 284-293)

## Sources

- [Official syllabus page](https://www.tnpsc.gov.in/english/syllabus.html)
- [Notifications](https://www.tnpsc.gov.in/English/Notification.aspx)