Exam-useful questions from this chapter, grouped by marks, each with a full model answer. Try writing the answer yourself first, then check it against this one.
1 1-Mark Questions
Q. When was the Planning Commission set up, and by what?
Answer: It was set up in March 1950, by a simple resolution of the Government of India, and not by the Constitution or by any law.
Q. Who was the Chairperson of the Planning Commission?
Answer: The Prime Minister was its Chairperson.
Q. In which year was the Bombay Plan drafted, and by whom?
Answer: It was drafted in 1944 by a section of the big industrialists, who got together and produced a joint proposal for setting up a planned economy in the country.
Q. When was the actual First Five Year Plan Document released?
Answer: In December 1951. The Plan itself covered the period 1951 to 1956.
Q. Under whose leadership was the Second Five Year Plan drafted?
Answer: Under the leadership of P. C. Mahalanobis, who led the team of economists and planners that drafted it.
Q. Where did the Congress pass the resolution declaring ‘socialist pattern of society’ to be its goal?
Answer: At its session held at Avadi, near the then Madras city, before the Second Five Year Plan was finalised.
Q. What did K.N. Raj mean by saying that India should ‘hasten slowly’?
Answer: He argued that India should develop slowly for the first two decades, because a fast rate of development might endanger democracy.
Q. What bias did critics find in the plan strategies from the Third Plan onwards?
Answer: They pointed out that the plan strategies from that time around displayed an unmistakable “urban bias”.
Q. What is the full form of NITI Aayog, and when did it come into existence?
Answer: NITI Aayog stands for the National Institution for Transforming India, and it came into existence on 1 January 2015.
Q. Which large-scale project is named as an example of the First Five Year Plan’s huge allocations?
Answer: The Bhakhra Nangal Dam.
2 2-Mark Questions
Q. What was the Bombay Plan, and why does the chapter find it surprising?
Answer: In 1944 a section of the big industrialists got together and drafted a joint proposal for setting up a planned economy in the country, and it was called the Bombay Plan. It wanted the state to take major initiatives in industrial and other economic investments.
The chapter finds it surprising because we commonly assume that private investors such as industrialists and big business entrepreneurs are averse to planning and seek an open economy without any state control in the flow of capital. Here they asked for the opposite, which is how the chapter shows that from left to right, planning was the most obvious choice for India after Independence.
Q. Why does the chapter say that the Planning Commission was not a constitutional body?
Answer: Because it was not one of the many commissions and other bodies set up by the Constitution. It was set up in March 1950 by a simple resolution of the Government of India, which is why the Class 11 book Constitution at Work carried no reference to it at all.
Its status followed from that origin: it had an advisory role, and its recommendations became effective only when the Union Cabinet approved them.
Q. What replaced the Planning Commission, and what does the chapter tell you about it?
Answer: The Government of India replaced the Planning Commission with a new institution named NITI Aayog, the National Institution for Transforming India, which came into existence on 1 January 2015.
The NCERT chapter gives only that much, and asks the student to find out the objectives and composition of NITI Aayog from its own website, http://niti.gov.in. The CBSE 2026-27 curriculum adds a reference note (classroom reading, not assessed in the Board examination): the Prime Minister is NITI Aayog’s ex-officio Chairman, its first Vice Chairperson was Arvind Panagariya, and it works as a think tank of the Union Government with a ‘Bottom-Up Approach’, in the spirit of cooperative federalism.
Q. Name the industries the chapter says were developed in the public sector in this period, and say why they could be.
Answer: The chapter names electricity, railways, steel, machineries and communication.
They could be developed in the public sector because savings and investment were growing in this period, and because the government had imposed substantial tariffs on imports to protect domestic industries, which created a protected environment in which both public and private sector industries grew.
Q. What did the tribal population and the environmentalists fear in the Orissa case?
Answer: The tribal population feared that the setting up of industries would mean displacement from their home and livelihood, since the iron ore resources lie in some of the most underdeveloped and predominantly tribal districts of the state.
The environmentalists feared that mining and industry would pollute the environment.
Q. What is meant by a ‘plan holiday’, and why did the government take one?
Answer: A plan holiday means a break in the sequence of five year plans, when the next plan does not begin as scheduled. The Fourth Plan was due to start in 1966, and the government decided to take a plan holiday instead.
The chapter gives two reasons. By that time the novelty of planning had declined considerably, and India was facing an acute economic crisis.
Q. Why did the First Five Year Plan treat land reforms as the key to the country’s development?
Answer: Because the Plan identified the pattern of land distribution in the country as the principal obstacle in the way of agricultural growth. If land was distributed in a way that held agriculture back, then changing that distribution came before anything else.
This fitted the Plan’s wider priority, which was the agrarian sector, including investment in dams and irrigation, since the agricultural sector had been hit hardest by Partition and needed urgent attention.
Q. Give the reasons the chapter offers for the worldwide support that the idea of planning enjoyed in the 1940s and 1950s.
Answer: The chapter gives three. The experience of the Great Depression in Europe, the inter-war reconstruction of Japan and Germany, and most of all the spectacular economic growth achieved against heavy odds in the Soviet Union in the 1930s and 1940s.
Together these convinced people that an economy could be rebuilt deliberately rather than left to itself, and that consensus is the background against which India set up its own Planning Commission.
3 4-Mark Questions
Q. Distinguish between the Left and the Right as the chapter defines them, and explain what the distinction is about.
Answer: What the terms are about. In the politics of most countries you come across references to parties and groups with a left or right ideology or leaning. The terms characterise the position of those groups or parties on two connected things: social change, and the role of the state in effecting economic redistribution.
The Left. The Left often refers to those who are in favour of state control of the economy. It prefers state regulation over free competition.
The Right. The Right refers to those who believe that free competition and market economy alone ensure progress, and that the government should not unnecessarily intervene in the economy.
Why it matters in this chapter. The whole argument of the chapter is about how much of a role the government should play in the economy, so this is the scale on which every position in it can be placed. The box itself asks you to do exactly that: to say which of the parties in the 1960s were Rightist and which were the Left parties, and where you would place the Congress party of that time.
Q. What is a five year plan? Explain the difference between the ‘plan’ and the ‘non-plan’ budget.
Answer: The idea. As in the USSR, the Planning Commission of India opted for five year plans. The idea is simple: the Government of India prepares a document that has a plan for all its income and expenditure for the next five years.
How the budget is then divided. Accordingly the budget of the central and all the State governments is divided into two parts. The ‘non-plan’ budget is spent on routine items on a yearly basis. The ‘plan’ budget is spent on a five year basis, as per the priorities fixed by the plan.
The advantage. A five year plan has the advantage of permitting the government to focus on the larger picture and to make long-term intervention in the economy, instead of deciding everything one year at a time.
Q. Explain the First Five Year Plan’s thinking on savings, and what actually happened to savings in the planned period.
Answer: The aim. One of the basic aims of the planners was to raise the level of national income, and that was possible only if people saved more money than they spent.
Why it was difficult. The basic level of spending was already very low in the 1950s, so it could not be reduced any further. The planners therefore sought to push savings up instead. That too was difficult, because the total capital stock in the country was rather low compared to the total number of employable people.
What happened. People’s savings did rise in the first phase of the planned process, until the end of the Third Five Year Plan. But the rise was not as spectacular as had been expected at the beginning of the First Plan.
The reversal. Later, from the early 1960s till the early 1970s, the proportion of savings in the country actually dropped consistently.
Q. What was the Avadi resolution, and how was it reflected in the Second Five Year Plan?
Answer: The resolution. Before the Second Plan was finalised, the Congress party at its session held at Avadi near the then Madras city passed an important resolution. It declared that ‘socialist pattern of society’ was its goal.
How the Plan reflected it. The chapter says this was reflected in the Second Plan. The government imposed substantial tariffs on imports in order to protect domestic industries, and that protected environment helped both public and private sector industries to grow.
The public sector. As savings and investment were growing in this period, a bulk of the industries like electricity, railways, steel, machineries and communication could be developed in the public sector, which is the practical form the socialist pattern took.
The verdict. The chapter says that such a push for industrialisation marked a turning point in India’s development.
Q. What problems did the strategy of rapid industrialisation run into?
Answer: Technology had to be bought. India was technologically backward, so it had to spend precious foreign exchange to buy technology from the global market.
Agriculture lost out. Industry attracted more investment than agriculture, so the possibility of food shortage loomed large.
The balance was hard to strike. The Indian planners found balancing industry and agriculture really difficult, and the Third Plan was not significantly different from the Second.
The criticisms. Critics pointed out that the plan strategies from this time around displayed an unmistakable “urban bias”. Others thought that industry was wrongly given priority over agriculture. There were also those who wanted the focus to be on agriculture-related industries rather than heavy ones.
Q. What did ‘development’ and ‘modernisation’ mean in the first decade after Independence, and what vocabulary did that idea produce?
Answer: The West as the standard. It was common then, as it is even now, for people to refer to the ‘West’ as the standard for measuring development. Development was about becoming more modern, and modern was about becoming more like the industrialised countries of the West. This is how common people as well as the experts thought.
What modernisation was believed to involve. It was believed that every country would go through the process of modernisation as in the West, which involved the breakdown of traditional social structures and the rise of capitalism and liberalism.
What it was associated with. Modernisation was also associated with the ideas of growth, material progress and scientific rationality.
The vocabulary it produced. This kind of idea of development allowed everyone to talk about different countries as developed, developing or underdeveloped, that is, to rank countries on a single ladder.
4 6-Mark Questions
Q. “Decisions about development are political decisions, not technical ones.” Explain this with the Orissa example given in the chapter.
Answer: The case. As global demand for steel increased, Orissa, which has one of the largest reserves of untapped iron ore in the country, came to be seen as an important investment destination. The State government signed Memoranda of Understanding with both international and domestic steel makers, hoping to cash in on the demand.
The interests in conflict. The government believed this would bring in necessary capital investment and provide a lot of employment opportunities. But the iron ore resources lie in some of the most underdeveloped and predominantly tribal districts of the state. The tribal population feared that setting up industries would mean displacement from their home and livelihood. The environmentalists feared that mining and industry would pollute the environment. The central government felt that if industry were not allowed, it would set a bad example and discourage investments in the country.
Why no expert can settle it. These questions cannot be answered by an expert. Decisions of this kind involve weighing the interests of one social group against another, and the present generation against future generations.
What a democracy requires. In a democracy such major decisions should be taken, or at least approved, by the people themselves. It is important to take advice from experts on mining, from environmentalists and from economists, but advice is not the decision.
Whose decision it is. The final decision must be a political decision, taken by people’s representatives who are in touch with the feelings of the people.
Why this belongs in a politics book. After Independence the country had to make a whole series of decisions like this, bound together by a shared vision or model of economic development. Each of them had political consequences and required consultation among political parties and the approval of the public, which is why the process of development is studied as part of the history of politics in India.
Q. What were the two models of development before India at Independence, and what did India’s leaders agree and disagree about?
Answer: The two models. On the eve of Independence, India had before it two models of modern development: the liberal-capitalist model as in much of Europe and the US, and the socialist model as in the USSR.
Where Indian opinion leaned. There were many in India who were deeply impressed by the Soviet model of development. These included not just the leaders of the Communist Party of India, but also those of the Socialist Party and leaders like Nehru within the Congress. There were very few supporters of the American style capitalist development.
What everyone agreed on. A broad consensus had developed during the national movement. The economic concerns of the government of free India would have to be different from the narrowly defined commercial functions of the colonial government. Poverty alleviation and social and economic redistribution were seen primarily as the responsibility of the government. Development had to mean both economic growth and social and economic justice, and it could not be left to businessmen, industrialists and farmers themselves.
The one further agreement. Development could not be left to private actors: there was a need for the government to develop a design or plan for development.
Where they disagreed. On the kind of role the government must play in ensuring growth with justice. Was it necessary to have a centralised institution to plan for the entire country? Should the government itself run some key industries and business? How much importance was to be attached to the needs of justice if it differed from the requirements of economic growth?
A further disagreement. Among the nationalist leaders themselves, for some industrialisation seemed to be the preferred path, while for others the development of agriculture, and in particular the alleviation of rural poverty, was the priority.
Q. Describe the Planning Commission: how it was set up, what its status and role were, what its founding resolution said, and what replaced it.
Answer: How it was set up. The Planning Commission was not one of the commissions and other bodies set up by the Constitution. It was set up in March 1950 by a simple resolution of the Government of India, which is why the Class 11 book Constitution at Work carried no reference to it.
Its status. It had an advisory role, and its recommendations became effective only when the Union Cabinet approved them.
Its weight nonetheless. The Prime Minister was its Chairperson, and it became the most influential and central machinery for deciding what path and strategy India would adopt for its development.
What the founding resolution said. The resolution defined the scope of its work by pointing to the Fundamental Rights guaranteed by the Constitution and to the Directive Principles of State Policy, in particular that the State shall strive to promote the welfare of the people by securing and protecting a social order in which there is justice, social, economic and political. The resolution then quotes three of the things the State is to direct its policy towards securing: that citizens, men and women equally, have the right to an adequate means of livelihood; that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.
What it actually did. As in the USSR, it opted for five year plans, and it produced the First Plan document in December 1951, the Second in 1956 and the Third in 1961.
What replaced it. The Government of India replaced the Planning Commission with a new institution named NITI Aayog, the National Institution for Transforming India, which came into existence on 1 January 2015.
Q. Why did the idea of planning command support right across the political spectrum in India? Explain.
Answer: The one point of consensus. Despite the various differences about what development should mean, there was a consensus on one point: development could not be left to private actors, and there was a need for the government to develop a design or plan for development.
The worldwide mood. The idea of planning as a process of rebuilding the economy earned a good deal of public support in the 1940s and 1950s all over the world. Three experiences produced that consensus: the Great Depression in Europe, the inter-war reconstruction of Japan and Germany, and most of all the spectacular economic growth achieved against heavy odds in the Soviet Union in the 1930s and 1940s.
The Left’s reasons. Those in favour of state control of the economy, who preferred state regulation over free competition, wanted planning as a matter of principle. Many Indian leaders were deeply impressed by the Soviet model, among them the leaders of the Communist Party of India and the Socialist Party and leaders like Nehru within the Congress.
The surprise from the other side. We commonly assume that private investors are averse to planning and seek an open economy without any state control in the flow of capital. That is not what happened here. In 1944 a section of the big industrialists got together and drafted a joint proposal for setting up a planned economy, the Bombay Plan, which wanted the state to take major initiatives in industrial and other economic investments.
The result. Thus, from left to right, planning for development was the most obvious choice for the country after Independence. Soon after India became independent, the Planning Commission came into being, with the Prime Minister as its Chairperson.
How far the consensus went. The draft of the First Five Year Plan and then the actual Plan Document, released in December 1951, generated a lot of excitement in the country, and people from all walks of life, academics, journalists, government and private sector employees, industrialists, farmers and politicians, discussed and debated the documents extensively.
Q. “The push for rapid industrialisation marked a turning point in India’s development, but it was not without its problems.” Discuss.
Answer: The strategy. The Second Five Year Plan stressed on heavy industries. It was drafted by a team of economists and planners under the leadership of P. C. Mahalanobis, who was a scientist and statistician of international repute, the founder of the Indian Statistical Institute in 1931, and a supporter of rapid industrialisation and an active role for the public sector.
Its temper. If the first plan had preached patience, the second wanted to bring about quick structural transformation by making changes simultaneously in all possible directions.
The political backing. Before the plan was finalised, the Congress at its Avadi session declared that ‘socialist pattern of society’ was its goal, and this was reflected in the Second Plan.
What it achieved. The government imposed substantial tariffs on imports in order to protect domestic industries, and that protected environment helped both public and private sector industries to grow. As savings and investment were growing, a bulk of the industries like electricity, railways, steel, machineries and communication could be developed in the public sector. The chapter says such a push for industrialisation marked a turning point in India’s development.
The problems. India was technologically backward, so it had to spend precious foreign exchange to buy technology from the global market. Industry attracted more investment than agriculture, so the possibility of food shortage loomed large, and the planners found balancing industry and agriculture really difficult.
The criticisms. The Third Plan was not significantly different from the Second. Critics pointed out an unmistakable “urban bias” in the plan strategies from this time on; others thought industry was wrongly given priority over agriculture; and some argued for agriculture-related industries rather than heavy ones.
Q. “Development has different meanings for different sections of the people.” Explain with reference to this chapter.
Answer: The claim. Very often the contestation in politics involves the very idea of development itself. It is not enough to say that everyone wants development, because development means different things to different sections of the people.
The chapter’s own three examples. Development would mean one thing to an industrialist who is planning to set up a steel plant, another to an urban consumer of steel, and another again to the Adivasi who lives in the region where the ore is mined.
What follows from it. Any discussion on development is therefore bound to generate contradictions, conflicts and debates, and the first decade after Independence witnessed a great deal of debate around exactly this question.
The Orissa case as an illustration. The State government saw investment and employment. The tribal population saw displacement from home and livelihood. The environmentalists saw pollution. The central government saw the signal that a refusal would send to investors. All four were talking about the same project and about development.
The dominant meaning at the time. It was common then, as now, to refer to the ‘West’ as the standard for measuring development. Development meant becoming modern, and modern meant becoming like the industrialised countries of the West, which involved the breakdown of traditional social structures and the rise of capitalism and liberalism, and was associated with growth, material progress and scientific rationality. That idea allowed everyone to speak of countries as developed, developing or underdeveloped.
The question the chapter leaves open. The margin of the chapter asks whether we have to be western in order to be modern, and whether it is possible to be one without the other. The chapter does not answer it, because the answer is a political choice and not a technical finding.
5 Case Studies
(A) 1 mark Why is Orissa being seen as an important investment destination?
Answer: Because global demand for steel is increasing and Orissa has one of the largest reserves of untapped iron ore in the country.
(B) 1 mark What does the State government hope to gain from the Memoranda of Understanding it has signed?
Answer: It believes they would bring in the necessary capital investment and provide a lot of employment opportunities.
(C) 2 marks Identify the interests in conflict in this case, and say who the passage suggests should finally decide.
Answer: Four interests are in conflict: the State government, which wants investment and employment; the tribal population of the underdeveloped districts where the ore lies, which fears displacement from home and livelihood; the environmentalists, who fear that mining and industry would pollute the environment; and the central government, which fears that refusing the industry would set a bad example and discourage investment in the country.
The chapter says such a question cannot be answered by an expert, because it involves weighing one social group’s interests against another’s and the present generation against future generations. Advice should be taken from experts on mining, environmentalists and economists, but the final decision must be a political decision, taken by people’s representatives who are in touch with the feelings of the people.
(A) 1 mark What did the First Five Year Plan seek to do, and over what period did it run?
Answer: It sought to get the country’s economy out of the cycle of poverty, and it ran from 1951 to 1956.
(B) 1 mark Why did K.N. Raj argue that India should ‘hasten slowly’?
Answer: Because a fast rate of development might endanger democracy. He said this should hold for the first two decades.
(C) 2 marks Which sector did the Plan address mainly, and why? What did it identify as the principal obstacle to growth in that sector?
Answer: It addressed mainly the agrarian sector, including investment in dams and irrigation, because the agricultural sector had been hit hardest by Partition and needed urgent attention. Huge allocations were made for large-scale projects like the Bhakhra Nangal Dam.
It identified the pattern of land distribution in the country as the principal obstacle in the way of agricultural growth, and therefore focused on land reforms as the key to the country’s development.