Five Year Plans , Latest Attempts at Urbanisation Policy Formulation in the Country

By Anumula Pavan Santhosh

India’s five-year plans have played a central role in shaping urbanization and city policy since independence, with more recent years seeing major policy reforms, new missions, and a shift toward integrated, sustainable urban development. The government’s latest attempts at urbanization policy formulation include comprehensive frameworks and transformative  schemes such as smart cities mission, AMRUT,PMAY, expanded metro systems, and innovative urban governance reforms.

ABSTRACT

India’s urban policy landscape is shaped by the legacy of Five-Year Plans and the recent shift to intregrated, mission-driven development frameworks. These strategies respond to complex realities housing shortages, infrastructure deficits, and social inequities-through participatory, evidence-based reforms. This essay traces the historical progression and the latest attempts at urbanization policy formulation, reviewing achievements, gaps, and contemporary solutions for resilient, equitable cites.

INTRODUCTION

Urbanization in India evolved gradually, influenced by the imperatives of economic modernization and demographic change. The Five-Year Plans laid the foundation, moving from limited urban intervention to systematic approaches in city planning, infrastructure upgrades, and governance. With cities recognized as engines of economic and social transformation, contemporary policies focus on technology, sustainability, and citizen participation to address the challenges and opportunities of rapid urban expansion

EVOLUTION THROUGH FIVE-YEAR PLANS

Early Five-Year Plan prioritized rural development, only marginally addressing urban issues like housing for refuges and basic amenities. The Third plan (1961-66) was pivotal, marking the first serious acknowledgment of urban challenges overcrowding, informal settlements, and inadequate infrastructure. Subsequent plans, decentralization, integrated development of smaller towns, and slum improvement.

The Tenth, Eleventh, and Twelfth Plans broadened their scope to encompass Sustainable cities, public transport, environmental protection, and public-private partnerships. The launch of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) signaled a strategic shift, focusing on comprehensive urban infrastructure, basic services for the urban poor, and accountability of urban local bodies.

The Five Year Plans Era: Foundation of Planned Development (1950-2017)

Historical Context and Institutional Framework

India’s Five Year Plans system was established in 1950 with the formation of the Planning Commission under the chairmanship of Prime Minister Jawaharlal Nehru. Drawing inspiration from the Soviet model of centralized planning, the Planning Commission became the architect of India’s post-independence economic strategy, formulating twelve comprehensive Five Year Plans between 1951 and 2017.

The Planning Commission functioned as an extra-constitutional body with sweeping powers over resource allocation and development planning. Its primary mandate included assessing national resources, formulating development plans, setting priorities, allocating funds to various sectors, and monitoring implementation across states and ministries. This centralized approach aimed to achieve balanced economic growth, reduce poverty, modernize key sectors, and promote social justice through systematic planning.

EVOLUTION THROUGH PLANS

The First Five Year Plan (1951-1956) prioritized agricultural development and infrastructure creation, successfully exceeding its growth target of 2.1% by achieving 3.6% GDP growth. Based on the Harrod-Domar model, it established crucial infrastructure including major dams like Bhakra Nangal and Hirakud.

The Second Plan (1956-1961) marked a shift toward industrialization, adopting the P.C. Mahalanobis model with emphasis on heavy industries. Despite falling short of its 4.5% growth target, it established foundational steel plants at Bhilai, Durgapur, and Rourkela.

Subsequent plans faced increasing challenges. The Third Plan (1961-1966) was disrupted by wars with China and Pakistan, while the Fourth and Fifth Plans grappled with inflation and political instability. The Sixth Plan (1980-1985) introduced the successful “Garibi Hatao” (Remove Poverty) program, while later plans increasingly emphasized liberalization and private sector participation.

The Twelfth Five Year Plan (2012-2017), the final plan, adopted the theme “Faster, More Inclusive and Sustainable Growth” with an 8% GDP growth target. It focused on poverty reduction, infrastructure development, and environmental sustainability while acknowledging the need for greater private sector involvement.

STRUCTURAL LIMITATIONS AND CRITICISM

By the early 2010s, the Five Year Plans approach faced mounting criticism for being incompatible with India’s liberalized economy. Key criticisms included excessive centralization undermining federalism, bureaucratic inefficiency, outdated rigid planning structures, lack of accountability in implementation, and disputes over discretionary resource allocation. The model of centralized planning was increasingly seen as unsuitable for a globalized economy requiring flexible, market-responsive policies

TRANSITION TO NITI AAYOG: PARADIGM SHIFT IN PLANNING APPROACH

Institutional Transformation (2014-2015)

In August 2014, Prime Minister Narendra Modi announced the abolition of the Planning Commission, citing the need for a more dynamic institution suited to contemporary economic challenges. On January 1, 2015, the National Institution for Transforming India (NITI Aayog) was established through a Union Cabinet resolution.

Unlike the Planning Commission, NITI Aayog functions as a policy think tank rather than a resource allocation body. It emphasizes cooperative and competitive federalism, involving states directly in policy formulation through its Governing Council comprising the Prime Minister, Chief Ministers, and Lieutenant Governors. This represents a fundamental shift from top-down planning to bottom-up, collaborative governance.

New Planning Framework: Vision, Strategy, and Action Agenda

NITI Aayog introduced a three-tier planning framework replacing the rigid Five Year Plans. In 2017, it launched the Three Year Action Agenda (2017-2020), the first document in this new approach. This was designed to be part of a broader seven-year strategy and fifteen-year vision document, providing greater flexibility and responsiveness to changing economic conditions.

The Action Agenda emphasized ambitious yet achievable reforms across multiple sectors, including doubling farmers’ incomes by 2022, reducing fiscal deficit to 3% of GDP by 2018-19, and promoting manufacturing sector growth to 10%. It represented a departure from the previous approach by focusing on policy changes and institutional reforms rather than just resource allocation.

Latest Attempts at Urbanization Policy Formulation

After the Planning Commission was replaced by NITI Aayog in 2015, urban policy took a mission-driven, actionable approach. Key recent initiatives and frameworks include:

• Smart Cities Mission: Launched in 2015, focuses on creating 100+ model cities that leverage technology for improved governance, sustainability, and quality of life. Smart infrastructure, ICT integration, and citizen-centric services define this policy

• AMRUT (Atal Mission for Rejuvenation and Urban Transformation): Targets water supply, sewerage, green spaces, and urban mobility improvements in over 500 cities

• PMAY-Urban (Pradhan Mantri Awas Yojana): Aims to provide affordable, secure housing. Over 1.16 crore homes sanctioned, making a significant impact on low-income urban families.

• Expanded Metro & Transit Networks: Unprecedented metro construction, with the network growing fourfold in a decade and new regional rapid transit projects, strengthens sustainable urban mobility.

• National Urban Policy Framework (NUPF): Outlines a coherent, integrated approach for future urban growth, focusing on governance, technology, participation, and inclusive planning.

• Swachh Bharat Mission (SBM), Heritage City Development (HRIDAY), National Urban Livelihoods Mission (NULM): These target sanitation, historic core revitalization, and urban poverty, respectively, signaling a broader, multi-sectoral urban policy approach.

RECENT POLICY INNOVATIONS AND INSTITUTIONAL REFORMS

Urban and Regional Development Plan Formulation Guidelines

The Ministry of Housing and Urban Affairs issued revised Urban and Regional Development Plan Formulation and Implementation Guidelines in 2022, updating the 1996 framework. These guidelines emphasize integrated planning, climate considerations, and stakeholder participation while promoting modern tools like GIS and remote sensing.

Technology Integration and Digital Governance

Recent urbanization policies emphasize technology integration through Integrated Command and Control Centers, smart metering solutions, IoT-based infrastructure management, and citizen service portals. The Digital India initiative supports urban governance through e-governance platforms and mobile applications for citizen services.

Financial Innovations and Urban Finance Reforms

Addressing urban finance constraints, recent policies promote innovative financing mechanisms including municipal bonds, land value capture, public-private partnerships, and green financing instruments. The framework encourages cities to become financially self-reliant through property tax reforms, user charges, and value capture financing.

FUTURE TRAJECTORY: VISION 2070 AND BEYOND

India’s urban future requires unprecedented coordination between policy formulation and implementation. With urban population expected to nearly double by 2050, the country needs to build over 144 million new homes and associated infrastructure. This represents both an enormous challenge and a critical opportunity to build climate-resilient, sustainable cities from the ground up.

The transition from Five Year Plans to NITI Aayog’s framework, combined with comprehensive urbanization policy initiatives, reflects India’s adaptation to 21st-century governance challenges. However, success depends on effective implementation, adequate financing, institutional capacity building, and continued policy innovation to address the complex challenges of rapid urbanization while ensuring sustainable, inclusive development.

The evolution from centralized planning to collaborative federalism, coupled with recognition of cities as engines of economic growth, positions India to leverage urbanization for national development while addressing climate resilience and social inclusion challenges. The next decade will be critical in determining whether these policy frameworks can deliver on their ambitious promises of transforming India’s urban landscape.

ACHIEVEMENTS AND CHALLENGES

Achievements:

• Extensive growth in public transport infrastructure.

• Digitization of municipal services and improved local governance.

• Empowerment through housing, greenfield developments, and inclusive policy design.

• Robust community involvement and innovation in urban management.

Challenges:

• Infrastructure shortfalls and uneven development across regions.

• Persistent financial and human resource constraints in urban governance.

• Limited resilience to climate risks and social exclusion in fast-growing cities.

• Continued capacity gaps among urban planners and regulatory sluggishness.

CONCCLUSION

India’s urbanization journey reflects a shift from centralized Five-Year Plans to dynamic, integrated, and locally-driven policies. Landmark missions like Smart Cities and AMRUT, together with the NUPF, represent ambitious, forward-thinking approaches to city development. Future success will depend on strengthening urban governance, building local capacity, and embedding sustainability and inclusivity as core principles in all urban strategies

References

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