What is a Plan?

Plan means thinking in advance what is to be done, how it is to be done and by whom it should be done.

What is a Plan in Economics?

A Plan is a list of goals an economy wants to achieve in a period of time

A plan spells out

How resources of a nation should be put to use

It has both general goals as well as specific objectives that are to be achieved over a period of time

Meaning of Economic Plans - Teachoo.JPG

How were Plans made by Indian Govt?

In India

Government made Plans for 5 year duration

These were called 5 Year plans


India's plans did not specify each and every good that had to be produced

This was neither possible nor necessary

It specified only sectors where government will play a key role

Example - Power Generation Sector etc

Difference between 5 Year Plan and Perpective Plans - Teachoo.JPG

What are Perspective Plans?

These were plans which specified long term objectives of economy over a period of 20 years

Our plan documents till 2017 not only specified what is to be achieved over next 5 years but also what were the

objectives to be achieved over the next 20 years

These 5 year plans formed the basis of perspective plans


When did 5 year Plans start in India

Five year Plan Duration

First 1951-56

Second 1956-61 -->This was called PC Mahanobis Model

Third 1961-66

Plan Holiday 1966-69

Fourth 1969-74


What was Plan Holiday

Plan Holiday Period was 1966-69

The government had to declare "plan holidays" (from 1966 to 1969) due to miserable failure of the Third Plan.


Which agency devised these 5 years Plans in India?

Planning Commission which was set up in 1950

Its Chairperson was the Prime Minister


National Development Council was established on 6 August 1952 to strengthen and consolidate national efforts

and resources to fund the Five Year Plan of the Planning Commission.


What was P.C. Mahalanobis Model?

This model of plan was Indianized from old Russian Model by scientist and statistician PC Mahalanobis in 1953

Mahalanobis model was used as framework for India's Second Five-Year Plan in 1955

Objective was to Industrialize the country by Govt investment in industry


What were the Goals of 5 Year Plans?

Goals of 5 Year plans were

1. Growth

It means increase in capacity to produce goods and service


2. Modernization

It means use of New technology for Increase in Output


3. Self Reliance

It means using own resources instead of resources imported from other nations


4. Equity

It means social justice and fairness to all sectors of society

Different Goals of 5 Year Plans-Growth Modernisation Self Reliance Equity - Teachoo.JPG

Condition of Indian Economy at the time of Independence - Teachoo.JPG


Lets learn about these in Detail one by one


NCERT Questions

Question 1

Define a plan.

View Answer


Question 2

Why did India opt for planning?

View Answer


Question 3

Why should plans have goals?

View Answer


MCQ Other Books

In the following questions, select the correct answers:

Question 1

When was the Planning commission set up?

  1. 1949
  2. 1950
  3. 1956
  4. 1850
View Answer


Question 2

Which of the following is a goal of five year plan?

  1. Growth
  2. Green Revolution
  3. Land Reforms
  4. Modernization
View Answer


Question 3

The first five year plan was launched for a period from ______.

  1. 1948 - 1953
  2. 1959 - 1954
  3. 1951 - 1956
  4. 1955 - 1960
View Answer


Question 4

What was the Period of Plans prepared by the Planning Commission?

  1. 3 years
  2. 4 years
  3. 5 years
  4. 6 years
View Answer


Question 5

Indian Planning Commission was constituted in:

  1. 1947
  2. 1950
  3. 1951
  4. 1971
View Answer


Question 6

National Development Council has been Constituted in:

  1. 1950
  2. 1947
  3. 1951
  4. 1952
View Answer


Question 7

First Five Year Plan was started on:

  1. 15th August, 1947
  2. 1st April, 1951
  3. 2nd October, 1956
  4. 1st July, 1962
View Answer


Question 8

Plan Holiday Period was:

  1. 1961-64
  2. 1966-69
  3. 1972-75
  4. 1978-81
View Answer


Question 9

Mahalanobis Model was adopted in Indian Planning in:

  1. First Plan
  2. Second Plan
  3. Third Plan
  4. Fourth Plan
View Answer


Question 10

Which of the following statements is not true about the Planning commission?

  1. The Planning Commission of India was established on 15th March, 1952.
  2. Its objective was to evaluate the physical, capital and human resources and on this basis make programmes for the Plan Development and its evaluation.
  3. The Planning Commission of India has now been dissolved in 2015.
  4. It was replaced by National Institution for Transforming India (NITI) Aayog.
View Answer

Question 11

Match the following items in Column A to those in Column B and choose the correct alternative:

Column A  Column B  
1. Prime  Minister   (a) Chairperson of Planning  Commission  
2. GDP  (b) Quantity of goods that can  be imported  
3. Quota  (c) The money value of all final  goods and services produced within the economy  in one year  
4. Land  Reforms   (d) Improvements in the field  of agriculture to increase its  productivity  


  1. 1 – (a)
  2. 2 – (b)
  3. 3 – (c)
  4. 4 – (d)
View Answer


“After Independence, Govt Made Plans for Economic Development” What is Plan? Plan of a Person List of Goals a person expects to achieve over a period of time Can be Short Term Plans Long Term Plans Plans are made by Person or his Family or Friends Plan of Government List of Goals an economy expects to achieve over a period of time In India, Plans are Long Term Plans (5 Year Plans and Perspective Plans) In India, Plans are made by Planning Commission (Setup in 1950) Headed by Prime Minister as Chairperson Types of Plans of Indian Govt 5 YEAR PLANS Plan for Next 5 years It specifies sectors where Govt will play a key role PERSPECTIVE PLANS Plan for Next 20-25 years It specifies long term objectives which govt plan to achieve Note-Both are long term plans 5 Year Plans provided basis for perspective Plans What were the Goals of 5 Year Plans Economy at the time of Independence Poverty Old Technology Dependence on Imports High Inequality Goal of 5 Year Plans after Independence Increase in capacity to produce goods and service Growth Modernisation Use of New technology to Increase in Output Self Reliance Using own resources instead of resources imported from other nations Equity Social justice and fairness to all sectors of society

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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo