The Five Year Plan was a deep-rooted sys­tem in India. Sys­tem­atic plan­ning began in 1951, and twelve plans were com­pleted before the plan era ended in 2017. The salient fea­tures of Indi­a's Five Year Plans were these:

  1. Demo­c­ra­tic: The fore­most and first char­ac­ter­is­tic of Indian plan­ning is that it is purely demo­c­ra­tic in nature. India is the world's largest democ­racy, and every basic issue in its Five Year Plans was decided by a gov­ern­ment elected by the peo­ple. When a plan was drawn up, the views of the dif­fer­ent tiers of gov­ern­ment, busi­ness, insti­tu­tions and experts were given weight.
  2. Decen­tral­ized Plan­ning: From the ini­ti­a­tion of the First Plan, the impor­tance of decen­tral­ized plan­ning sys­tem was focused so as to bring active par­tic­i­pa­tion into the plan­ning process, but the real start up of decen­tral­ized plan­ning was made in India for the very first time in the period of the Sev­enth Plan. Decen­tralised plan­ning means plan­ning from the grass­roots, or from the bot­tom up. Under the sys­tem of decen­tral­ized plan­ning in India, focus has been made on the intro­duc­tion of dis­trict level plan­ning, sub-divi­sional level plan­ning and block-level plan­ning so as to reach finally the vil­lage level plan­ning suc­cess­fully and in a proper man­ner.
  3. Reg­u­la­tory Mech­a­nism: Another sig­nif­i­cant fea­ture was that plan­ning was directed by a cen­tral author­ity, the Plan­ning Com­mis­sion (replaced by the NITI Aayog in 2015), which guided and reg­u­lated the plan­ning sys­tem. Plan­ning deci­sions orig­i­nated in the Plan­ning Com­mis­sion and were finally approved by the National Devel­op­ment Coun­cil, and the Com­mis­sion also over­saw how plans were imple­mented.
  4. Exis­tence of Cen­tral Plan and State Plan: There is the co-exis­tence of both the Cen­tral Plan and State Plans in the coun­try. In every Five Year Plan of the nation, sep­a­rate out­lay plan is ear­marked both for the Cen­tral Level Plan as well as for the State Level Plans. Cen­tral Plan is under the exclu­sive con­trol of the Plan­ning Com­mis­sion and the Cen­tral Gov­ern­ment, whereas the State Plan is under the exclu­sive con­trol of State Plan­ning Board and State Gov­ern­ment which also needed the Plan­ning Com­mis­sion's approval. Within this frame­work, state gov­ern­ments drew up their own plans.
  5. Pub­lic Sec­tor and Pri­vate Sec­tor Plan: In each plan, a sep­a­rate out­lay is ear­marked both for pub­lic sec­tor under­tak­ings and the pri­vate sec­tor units. In each five year plan of the nation, the amount of pub­lic sec­tor invest­ment and the amount of pri­vate sec­tor invest­ment is sep­a­rately fixed, which com­prises the total invest­ment in each plan. As India is a mixed econ­omy, it was nat­ural to keep sep­a­rate invest­ment out­lays for the pub­lic and pri­vate sec­tors in each plan.
  6. Peri­odic Plan: India adopted plans of five years each, made up of five sep­a­rate Annual Plans. This type of peri­odic plan approach is quite suit­able for real­iz­ing its pre-defined tar­gets or goals.
  7. Basic Objec­tives: Each and every plan is influ­enced by cer­tain basic or fun­da­men­tal goals which are almost com­mon in most of our five year plans. Basic goals con­sid­ered to be included in eco­nomic plan­ning in India are:

(a) Achiev­ing of higher rate of eco­nomic growth in the nation.

(b) Decrease in the eco­nomic inequal­i­ties spe­cially in the back­ward areas.

(c) Attain­ing the tar­get of full employ­ment.

(d) Achiev­ing the con­cept of eco­nomic self reliance.

(e) Mak­ing mod­ern­iza­tion of var­i­ous sec­tors of the econ­omy.

(f) Remov­ing the regional and eco­nomic imbal­ances in the econ­omy.

Broadly, Growth with social jus­tice is the basic aim of eco­nomic plan­ning.

  1. Unchang­ing Pri­or­i­ties: Indi­a's Five Year Plans set their pri­or­i­ties accord­ing to the needs of the nation, and gave steady pref­er­ence to indus­try, power and agri­cul­ture with only minor changes. So there was no notice­able change in the pat­tern of pri­or­i­ties, although later plans also stressed poverty erad­i­ca­tion and employ­ment gen­er­a­tion.
  2. Bal­anced Regional Devel­op­ment: Five year plans stressed on bal­anced regional devel­op­ment. Growth and devel­op­ment of rural and back­ward regions is one of the sig­nif­i­cant aims of Indian plan­ning. Plan­ning sys­tem in India has even iso­lated some states under the cat­e­gory of spe­cial states so as to chan­nel­ize addi­tional resources to these rural and back­ward states for their rapid growth and devel­op­ment. Spe­cial bud­get pro­vi­sions gave relief in the form of tax hol­i­day or tax relief for set­ting up indus­tries into back-ward regions of the nation.
  3. Per­spec­tive Plan­ning on Basic Issues or Prob­lems: Plan­ning in India has adopted the sys­tem of per­spec­tive plan­ning on some basic issues or prob­lems of the nation, for a period of 15 to 20 years on the basis of manda­tory fore­cast­ing pro­vi­sions.
  4. Pro­gramme Imple­men­ta­tion and Eval­u­a­tion: The sys­tem of Indian plan­ning is basi­cally sup­ported by pro­gramme imple­men­ta­tion machin­ery that plays a very sig­nif­i­cant role. Pro­gramme imple­men­ta­tion machin­ery com­prises dif­fer­ent depart­ments of the Gov­ern­ment which are usu­ally involved for the imple­men­ta­tion of the plans. There is an eval­u­a­tion and adju­di­ca­tion machin­ery which usu­ally con­ducts pre-project eval­u­a­tion and post-project eval­u­a­tion of every plan­ning project of the econ­omy.
  5. Short­falls in Tar­get Real­iza­tion: There was a short­fall in tar­get/aim real­iza­tion in the five year plans. No doubt the tar­gets are fixed for every plan in respect of rate of growth of national income, increase in employ­ment oppor­tu­ni­ties, decreas­ing the rate of pop­u­la­tion growth, increas­ing the pro­duc­tion of some neces­sity based items etc. But in most cases, apart from a few, these tar­gets were not fully met. Such short­falls led to projects spilling over into the next plan and to cost over­runs.