CDS Economics · Indian Economy
Planning and Farm Policy
The Five Year Plans and their themes, NITI Aayog, the minimum support price and the public distribution system, and the farm, livestock and fisheries schemes.
Why this matters
Fifteen CDS questions, four of them from 2026. Three ask about planning; the rest name a farm or food scheme and ask what it does, so the aim of each scheme is what to learn.
Concept 1 of 4: The Five Year Plans and NITI Aayog
From 1951 to 2017 India planned its economy in five-year blocks, each with a theme. Wars and droughts broke the sequence twice. In 2015 the Planning Commission gave way to NITI Aayog, which advises rather than allocates money.
Definition
The landmarks:
- Planning Commission: set up in 1950, chaired by the Prime Minister.
- Second Plan (1956 to 1961) followed the Mahalanobis model: heavy industry first.
- Plan holiday (1966 to 1969): three annual plans after the 1965 war and two droughts.
- Rolling plan (1978 to 1980): adopted by the Janata government.
- NITI Aayog replaced the Planning Commission on 1 January 2015. It is a think tank built on cooperative federalism: it designs strategies and long-term policy frameworks, but it does not allocate funds and does not impose policy on States.
| Plan | Years | Theme |
|---|---|---|
| First | 1951 to 1956 | Agriculture (Harrod-Domar model) |
| Second | 1956 to 1961 | Heavy industry (Mahalanobis model) |
| Third | 1961 to 1966 | A self-reliant, self-generating economy |
| Plan holiday | 1966 to 1969 | Three annual plansQ CDS 2017 (II): Mahalanobis model, then plan holiday, then rolling plan. |
| Fourth | 1969 to 1974 | Growth with stability and self-reliance |
| Fifth | 1974 to 1979 | Removal of poverty and self-reliance |
| Rolling plan | 1978 to 1980 | Janata government |
| Seventh | 1985 to 1990 | Food, work and productivity |
| Ninth | 1997 to 2002 | Growth with social justice and equality |
| Eleventh | 2007 to 2012 | Faster and more inclusive growth |
| Twelfth (the last) | 2012 to 2017 | Faster, more inclusive and sustainable growthQ |
Practice this concept4 quick reps
The same idea in a real exam question:
CDS · 2024 · CDS (II) 2024 — General Knowledge · Q94Moderate
Example 1 · Indian Economy · Planning and Farm Policy
Which one among the following was the focus of the Twelfth Five-Year Plan ?
NITI Aayog advises, it does not fund
Unlike the Planning Commission, NITI Aayog does not allocate money; transfers to States go through the Finance Ministry and the Finance Commission. It does not impose policy on States either.
Plan holiday before rolling plan
The plan holiday was 1966 to 1969; the rolling plan came later, 1978 to 1980. The Mahalanobis model (Second Plan, 1956) came before both.
Concept 2 of 4: Minimum support price and the food system
The government buys grain from farmers at a guaranteed price, stores it and sells it cheaply through ration shops. Three pieces make this work: the minimum support price, the Food Corporation of India and the public distribution system, with the National Food Security Act setting who is entitled.
Definition
The pieces:
- Minimum support price (MSP): recommended by the Commission for Agricultural Costs and Prices (CACP). It weighs cost of production, demand and supply, domestic and international price trends, inter-crop price parity, the terms of trade between farming and other sectors, and the effect on consumers. A cost of living index is not one of its factors.
- Food Corporation of India (1965): procures, stores and moves grain and makes the bulk allocation to the States.
- Public distribution system (PDS): run jointly by the Centre and the States. The States alone identify the beneficiaries and run the fair price shops; some add pulses and edible oil.
- National Food Security Act, 2013: covers up to 75 per cent of rural and 50 per cent of urban people, about two thirds (67 per cent) of the population, with 5 kg of grain per person a month. It has run in every State and Union Territory since November 2016.
| Item | Who or what | Key fact |
|---|---|---|
| MSP | CACP recommends | Cost of production, price trends, inter-crop parity; not a cost of living indexQ |
| Procurement and storage | Food Corporation of India | Moves grain to the States |
| Identifying beneficiaries | State governments | Not a joint task with the Centre |
| Food Security Act | 2013 | About 67 per cent of the population; all States and UTs since 2016 |
Practice this conceptself-check · 3 quick reps
The same idea in a real exam question:
CDS · 2023 · CDS (II) 2023 — General Knowledge · Q57Moderate
Example 2 · Indian Economy · Planning and Farm Policy
Consider the following statements about the Public Distribution System :
1. The Public Distribution System is operated under the joint responsibility of Centre and State/Union Territories.
2. Food Corporation of India has assumed the responsibility for procurement, storage and transportation of food grains to the State Governments.
3. Both Centre and State have the joint responsibility to identify eligible beneficiaries.
4. Some States also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oil, etc.
Which of the statements given above are correct ?
CACP recommends, it does not decide
The CACP only recommends the MSP; the government announces it. And a cost of living index is not among the factors the CACP weighs.
Concept 3 of 4: Farm schemes
Each farm scheme fixes one problem: water, soil, risk, credit or a crop the country imports. If you know which problem a scheme's name points at, you can rule out the options that belong to another scheme.
Definition
The schemes:
- Pradhan Mantri Krishi Sinchayee Yojana (PMKSY, 2015): irrigation. 'Har Khet Ko Pani', 'More crop per drop': convergence of irrigation investment, more land under assured irrigation, better on-farm water use.
- Paramparagat Krishi Vikas Yojana (PKVY, 2015-16): organic farming in clusters.
- Pradhan Mantri Fasal Bima Yojana (PMFBY, 2016): crop insurance against non-preventable natural risks; its aims include steady farm income and the flow of credit to agriculture. It continues, as does the Restructured Weather Based Crop Insurance Scheme (both extended to 2025-26).
- PM Kisan Maandhan Yojana (2019): pension for small and marginal farmers. Modified Interest Subvention Scheme: cheaper short-term crop loans.
- National Mission on Edible Oils, Oil Palm (2021): focus on the North-East and the Andaman and Nicobar Islands.
- Ethanol blending: India reached 10 per cent blending in 2022, ahead of target; most fuel ethanol comes from sugarcane, so the sugar industry gains most.
- PM SVANidhi (2020) gives loans to urban street vendors: it is not a farm scheme.
| Scheme | Year | Aim |
|---|---|---|
| PMKSY | 2015 | Irrigation and water use efficiencyQ CDS 2018 (I): protecting farmers against crop failure is not a PMKSY aim. |
| PKVY | 2015-16 | Organic farming |
| PMFBY | 2016 | Crop insurance; continued, not discontinuedQ Asked twice: CDS 2025 (II) and 2026 (I). The ₹2 lakh death cover belongs to a different scheme. |
| Oil palm mission | 2021 | Edible oil; North-East and Andaman and NicobarQ |
| Ethanol blending | 10 per cent reached in 2022 | Helps the sugar industryQ |
| PM SVANidhi | 2020 | Loans to urban street vendors; not for farmingQ |
Practice this concept4 quick reps
The same idea in a real exam question:
CDS · 2025 · CDS (I) 2025 — General Knowledge · Q109Moderate
Example 3 · Indian Economy · Planning and Farm Policy
The Paramparagat Krishi Vikas Yojana (PKVY) launched in 2015 – 16 by the Central Government is aimed to :
Insurance is PMFBY, not PMKSY
PMKSY is about irrigation; protection against crop failure is PMFBY. Two similar names, two different jobs.
Accident cover is not crop insurance
A ₹2 lakh cover for death or total disability belongs to Pradhan Mantri Suraksha Bima Yojana, an accident insurance scheme, not to PMFBY.
Concept 4 of 4: Livestock and fisheries
Animals and fish give farm families income that does not depend on one harvest. The newer schemes push small businesses and startups in these sectors, not just higher output.
Definition
The schemes:
- National Livestock Mission (2014, restructured 2021-22): more output of meat, egg, goat milk, wool and fodder; entrepreneurship in small ruminants (sheep, goats), poultry, piggery and fodder; risk management and livestock insurance.
- Department of Fisheries (Ministry of Fisheries, Animal Husbandry and Dairying): the Fisheries Startup Grand Challenge (startups for productivity, sustainability and market access), the Matsya Manthan lecture series, and business incubation centres for fisheries startups.
- Pradhan Mantri Matsya Sampada Yojana (2020): the main scheme for fisheries growth.
| Scheme or initiative | What it does |
|---|---|
| National Livestock Mission | Output, entrepreneurship and insurance in livestock |
| Fisheries Startup Grand Challenge | Finds startups with solutions for productivity, sustainability and market accessQ |
| Matsya Manthan | Lecture series to build innovation in fisheries |
| Pradhan Mantri Matsya Sampada Yojana | Fisheries production and infrastructure, from 2020 |
Practice this concept3 quick reps
The same idea in a real exam question:
CDS · 2026 · CDS (II) 2026 — General Knowledge · Q25Moderate
Example 4 · Indian Economy · Planning and Farm Policy
Which of the following statements relating to objectives of National Livestock Mission are correct ?
1. Promoting risk management measures including livestock insurance for farmers
2. Increase in production of meat, egg, goat milk, wool and fodder
3. Employment generation through entrepreneurship development in small ruminant, poultry and piggery sector & fodder sector
Select the answer using the code given below :
Livestock schemes now include insurance
The National Livestock Mission covers risk management and livestock insurance as well as output and jobs. An option leaving insurance out is incomplete.
Summary — formulas & gotchas at a glance
A revision cheat-sheet for the formulas and gotchas above. Click any concept name to jump back to its full explanation.
Reference tables (4)
The Five Year Plans and NITI Aayog11 rows
| Plan | Years | Theme |
|---|---|---|
| First | 1951 to 1956 | Agriculture (Harrod-Domar model) |
| Second | 1956 to 1961 | Heavy industry (Mahalanobis model) |
| Third | 1961 to 1966 | A self-reliant, self-generating economy |
| Plan holiday | 1966 to 1969 | Three annual plansQ CDS 2017 (II): Mahalanobis model, then plan holiday, then rolling plan. |
| Fourth | 1969 to 1974 | Growth with stability and self-reliance |
| Fifth | 1974 to 1979 | Removal of poverty and self-reliance |
| Rolling plan | 1978 to 1980 | Janata government |
| Seventh | 1985 to 1990 | Food, work and productivity |
| Ninth | 1997 to 2002 | Growth with social justice and equality |
| Eleventh | 2007 to 2012 | Faster and more inclusive growth |
| Twelfth (the last) | 2012 to 2017 | Faster, more inclusive and sustainable growthQ |
Minimum support price and the food system4 rows
| Item | Who or what | Key fact |
|---|---|---|
| MSP | CACP recommends | Cost of production, price trends, inter-crop parity; not a cost of living indexQ |
| Procurement and storage | Food Corporation of India | Moves grain to the States |
| Identifying beneficiaries | State governments | Not a joint task with the Centre |
| Food Security Act | 2013 | About 67 per cent of the population; all States and UTs since 2016 |
Farm schemes6 rows
| Scheme | Year | Aim |
|---|---|---|
| PMKSY | 2015 | Irrigation and water use efficiencyQ CDS 2018 (I): protecting farmers against crop failure is not a PMKSY aim. |
| PKVY | 2015-16 | Organic farming |
| PMFBY | 2016 | Crop insurance; continued, not discontinuedQ Asked twice: CDS 2025 (II) and 2026 (I). The ₹2 lakh death cover belongs to a different scheme. |
| Oil palm mission | 2021 | Edible oil; North-East and Andaman and NicobarQ |
| Ethanol blending | 10 per cent reached in 2022 | Helps the sugar industryQ |
| PM SVANidhi | 2020 | Loans to urban street vendors; not for farmingQ |
Livestock and fisheries4 rows
| Scheme or initiative | What it does |
|---|---|
| National Livestock Mission | Output, entrepreneurship and insurance in livestock |
| Fisheries Startup Grand Challenge | Finds startups with solutions for productivity, sustainability and market accessQ |
| Matsya Manthan | Lecture series to build innovation in fisheries |
| Pradhan Mantri Matsya Sampada Yojana | Fisheries production and infrastructure, from 2020 |
Watch out for (6)
- NITI Aayog advises, it does not fund→ The Five Year Plans and NITI Aayog
- Plan holiday before rolling plan→ The Five Year Plans and NITI Aayog
- CACP recommends, it does not decide→ Minimum support price and the food system
- Insurance is PMFBY, not PMKSY→ Farm schemes
- Accident cover is not crop insurance→ Farm schemes
- Livestock schemes now include insurance→ Livestock and fisheries
Test yourself on Indian Economy
15 past CDS questions from this chapter, timed at 15 minutes and marked the way the exam marks it. You see your score and every answer the moment you finish. Free to start.