An Overview of Economic Planning and Policy Formulation in the Pre-liberalisation Period in India (1950–1990)

Economic planning in India was aimed at activating the stagnated economy by promoting private initiative with state guidance and animating the market forces to promote saving, investment, augmenting supplies for domestic and export needs. Increasing the extent of resource use was treated as essential for bridging the gap between demand and supply to stabilise the prices. To attain the goal of socialist pattern of society, comprehensive planning was found appropriate. This needed sociocultural and structural changes. In some sectors, planning by direction and regulatory planning was recommended. India adopted indicative planning under state guidance. A typical admixture of planning design was introduced including planning by inducement and decentralise 3D planning as against centralised planning in socialist models. The intended objective was to reach planning from below. Strong efforts had been made to follow Mahalanobis model on emphasising our industrial growth, infrastructure, transport and services. Basic industry promotion and small sector growth were emphasised.