The Planning Commission of India

For 65 years, one body decided how much money each Indian state got, without ever being named in the Constitution. That was the Planning Commission. This article covers the Commission itself: its founding, its structure, and the constitutional question that helped end it.

Must Know

• The Planning Commission was set up on 15 March 1950, to guide India’s economic and social development.
• It was created by a Government of India resolution. It was never a constitutional or a statutory body.
• Its main tool was the Five Year Plan, a top-down national plan setting targets and allocating funds.
• The Prime Minister served as its ex-officio Chairman. Jawaharlal Nehru held this role from the start.
• A Deputy Chairman was the Commission’s real, day-to-day executive head, ranked equal to a Cabinet Minister.
• Gulzarilal Nanda was the Commission’s first Deputy Chairman, serving from 1953 to 1963.
• Other full-time Members were subject experts: economists, scientists, and specialists in agriculture and industry.

Good to Know

• The Commission’s power went beyond just writing plans. It also allocated central funds directly to states.
• This fund-allocating role gave it huge practical leverage over state finances, for over six decades.
• Critics called its top-down model unsuited to a large, diverse federal economy like India’s.
• Its relevance also declined after 1991, when economic liberalisation shifted India toward market-driven growth.
• On 15 August 2014, PM Narendra Modi announced his intent to dissolve it, in his Independence Day speech.
• The Commission was formally replaced by NITI Aayog on 1 January 2015. See Polity0122 — NITI Aayog: Founding, Structure, and Mandate for that story.

Test Yourself

Please wait…

1. On what date was India’s Planning Commission established?

26 January 1950

15 March 1950

15 August 1947

1 April 1951

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Great to Know

• The strongest critique of the Planning Commission was not about policy, but about the Constitution itself.
• Article 280 already names the body meant to handle fiscal transfers between the Centre and states: the Finance Commission.
• The Planning Commission had no such constitutional mandate, yet it controlled major fund flows to states anyway.
• Critics argued this let a non-constitutional body do a constitutional body’s job, without the same checks.
• This is the deeper reason its dissolution mattered: it was not just a rename, but a return of that power.
• NITI Aayog deliberately does not allocate funds this way, partly to avoid repeating this same tension.

Current Affairs

• The Planning Commission itself has been dissolved since 2015 and has no current-affairs angle of its own. For NITI Aayog’s latest developments, see SciTech0012 — NITI Aayog.