Thiruvananthapuram, Feb 10 (IANS) Veteran economist K.N. Raj died at a private hospital here Wednesday, an official said. He was 86.

Raj was ailing for some time. His last rites would be conducted Thursday, said a spokesperson of the Centre for Development Studies (CDS) which Raj founded.

Raj shot to fame soon after independence when he was invited by then prime minister Jawaharlal Nehru to reorganise the states and lay the country's economic foundation. He took the lead and established the planning commission in 1950.

He was also vice-chancellor of Delhi University and a member of the prime minister's economic advisory council for several years.

In 1971, C. Achutha Menon, then chief minister of Kerala, asked Raj to set up an academic research institution. Raj took up the challenge and with Rs.3 million from the state government laid the foundation of CDS, often referred to as Raj's institute, though he never took up the post of CDS director.

In 2000, Raj was awarded the Padma Vibhushan in literature and education.

Some of Raj's well-known students at CDS are Kerala Finance Minister Thomas Isaac, veteran journalists Ram Manohar Reddy (editor, Economic and Political Weekly), Sanjaya Baru (former press secretary to Prime Minister Manmohan Singh), planning commission member Mihir Shah and several senior officials serving the World Bank and Asian Development Bank.