In line with the Soviet Union's approach, India's Planning Commission adopted a system of five-year plans (FYPs). The concept is straightforward: the Indian government formulates a comprehensive document outlining its financial projections and allocations for the next five years. This entails dividing the budgets of the central and state governments into two categories: the 'non-plan' budget, which covers annual routine expenditures, and the 'plan' budget, which is allocated over the course of five years based on predetermined priorities set by the plan. By implementing a five-year plan, the government gains the advantage of being able to focus on the broader perspective and make sustained interventions in the economy for long-term development.

What was the name of the young economist, involved in drafting the First Five-Year Plan?

K.N. Raj

K.N. Raj (Kakkadan Nandanath Rajan), a young economist involved in drafting the first five year plan, argued that India should ‘hasten slowly’ for the first two decades as a fast rate of development might endanger democracy. The plan was based on the Harrod-Domar model.