Indian Economy Planning and NITI Aayog UPSC Practice Questions

Planning and NITI Aayog — Practice Questions

UPSC Prelims-pattern practice questions on planning in India with full explanations: Five-Year Plans, plan holiday, pre-independence plans and NITI Aayog.

5 Questions Updated Oct 2026 #upsc#practice-questions#economy

Questions

These are original UPSC-pattern practice questions. Attempt each one before revealing the answer.

UPSC Practice · Prelims GS I Qplp-1

Consider the following pairs:

Five-Year PlanStated objective
1Fourth PlanGrowth with stability
2Seventh PlanFood, Work and Productivity
3Ninth PlanGrowth with social justice and equality
4Eleventh PlanFaster, more inclusive and sustainable growth

How many of the pairs given above are correctly matched?

  1. A Only one
  2. B Only two
  3. C Only three
  4. D All four
Solution

Pairs 1, 2 and 3 are correct. Pair 4 is wrong: the Eleventh Plan (2007-12) was “Towards faster and more inclusive growth”; adding “sustainable” gives the Twelfth Plan (2012-17). So three pairs are correct.

Answer: C

UPSC-pattern practice question
UPSC Practice · Prelims GS I Qplp-2

The period of the “Plan holiday” in India, when three Annual Plans were implemented instead of a Five-Year Plan, was:

  1. A 1966-69
  2. B 1978-80
  3. C 1990-92
  4. D 1962-65
Solution

The Third Plan was derailed by the 1962 and 1965 wars and the droughts of the mid-1960s, so three Annual Plans were run in 1966-69. 1978-80 was the Rolling Plan; 1990-92 saw Annual Plans during a political and balance of payments crisis; 1962-65 lies inside the Third Plan.

Answer: A

UPSC-pattern practice question
UPSC Practice · Prelims GS I Qplp-3

Consider the following statements about NITI Aayog:

  1. Its Chief Executive Officer is appointed by the Prime Minister in the rank of Secretary to the Government of India.
  2. Its Vice-Chairperson is appointed by the Prime Minister.
  3. It has the power to allocate central plan funds to States.

Which of the statements given above is/are correct?

  1. A 1 only
  2. B 2 and 3 only
  3. C 1 and 3 only
  4. D 1 and 2 only
Solution

Statements 1 and 2 follow the Cabinet resolution of 1 January 2015. Statement 3 is wrong: NITI Aayog is a policy think tank with no fund-allocation role. Tax devolution is decided by the Finance Commission (Article 280), and scheme funds flow through Union ministries.

Answer: D

UPSC-pattern practice question
UPSC Practice · Prelims GS I Qplp-4

The People’s Plan of 1945 was prepared by:

  1. A S.N. Agarwal
  2. B M.N. Roy
  3. C M. Visvesvaraya
  4. D Jayaprakash Narayan
Solution

M.N. Roy drew up the People’s Plan (1945). S.N. Agarwal wrote the Gandhian Plan (1944); M. Visvesvaraya wrote Planned Economy for India (1934); Jayaprakash Narayan proposed the Sarvodaya Plan (1950).

Answer: B

UPSC-pattern practice question
UPSC Practice · Prelims GS I Qplp-5

Which one of the following is not an index prepared by NITI Aayog?

  1. A SDG India Index
  2. B Composite Water Management Index
  3. C Human Development Index
  4. D Export Preparedness Index
Solution

The Human Development Index is published by the UNDP in its Human Development Report (first released in 1990). The other three are NITI Aayog indices that rank States, a tool of competitive federalism.

Answer: C

UPSC-pattern practice question
UPSC Practice · Mains GS III 10 marks · 150 words Qplp-m1

Is there still a case for medium-term planning in a market-driven Indian economy? Discuss.

Solution

Introduction: India ran twelve Five-Year Plans between 1951 and 2017. Since 2015, NITI Aayog has replaced plan-making with policy advice, indices and evaluation. The question is whether markets alone can set priorities.

Body:

  • Case for planning: long-gestation infrastructure (power, railways, urban transit) needs multi-year commitments; climate goals and energy transition require coordinated pathways; human capital investment pays off over decades; regional imbalances do not correct themselves.
  • Case against old-style planning: top-down, uniform schemes ignored State diversity; plan targets were often missed; resource allocation by a central body crowded out States and markets.
  • Middle path: indicative planning that sets direction and builds consensus with States; outcome budgets and independent evaluation; sectoral long-term roadmaps rather than a single all-encompassing plan.

Conclusion: India no longer needs a command plan, but it does need a medium-term strategic framework, built with States, that links budgets to measurable outcomes.

UPSC-pattern practice question