Planning in IndiaPlanning in India

Focus - 11Focus - 11thth 5 year Plan 5 year Plan

ECONOMIC PLANNINGECONOMIC PLANNING

Refers to that process wherein-Refers to that process wherein- 1) a Central planning authority1) a Central planning authority 2) keeping in view the resources 2) keeping in view the resources

of the countryof the country 3) makes an attempt to regulate 3) makes an attempt to regulate

economic factorseconomic factors 4) with a view to achieve pre-4) with a view to achieve pre-

determined objectives within a determined objectives within a specified given period of timespecified given period of time

The Emergence of PlanningThe Emergence of Planning In India,In India,Sir M.VishveshwaryaSir M.Vishveshwarya, eminent , eminent

engineer,in his book,“engineer,in his book,“Planned Economy for Planned Economy for India”(1934)India”(1934) -for 1 -for 1stst time laid stress on time laid stress on scientific planning for economic recontruction scientific planning for economic recontruction of India-gave priority to Industrialisation.of India-gave priority to Industrialisation.

1938– Congress 1938– Congress appointedappointed National Planning National Planning CommitteeCommittee.(NPC).(NPC) Congress President – Congress President – S. C BoseS. C Bose Chairman – Chairman – Jawaharlal NehruJawaharlal Nehru

1944 – Bombay Plan:Aim at doubling per 1944 – Bombay Plan:Aim at doubling per capita income in 15 yearscapita income in 15 years A blue print for economic development after A blue print for economic development after

independenceindependence Worked out by 8 Top industrialists Worked out by 8 Top industrialists

The Emergence of PlanningThe Emergence of Planning 1950 : Establishment of 1950 : Establishment of

Planning CommissionPlanning CommissionMain Task were to make an Main Task were to make an

assessment of material & capitalassessment of material & capitalEffective utilization of the Effective utilization of the

resourcesresourcesWithin 15 months of inception Within 15 months of inception

presented draft of First five year presented draft of First five year plan to govt. on July1951.plan to govt. on July1951.

History of Economic Planning History of Economic Planning in Indiain India

1947 – 1950 : Preparatory phase 1947 – 1950 : Preparatory phase in planning & developmentin planning & development

1950 -1960 : Rapid 1950 -1960 : Rapid IndustrializationIndustrialization

1960 – 1970 : Focus on 1960 – 1970 : Focus on AgriculturalAgricultural

1980 – 1991 : Liberalization1980 – 1991 : Liberalization 1991 to now : LPG1991 to now : LPG

The Planning CommissionThe Planning Commission

The Commission comprises 8 The Commission comprises 8 membersmembersPrime Minister – ChairmanPrime Minister – Chairman4 full time members (including 4 full time members (including

deputy chairmandeputy chairmanMinister of PlanningMinister of PlanningMinister of FinanceMinister of FinanceMinister of DefenceMinister of Defence

The National Development The National Development CouncilCouncil

Working as the highest national Working as the highest national forum for economic planning in forum for economic planning in India since August 6, 1952.- Act India since August 6, 1952.- Act as advisory council.as advisory council.

NDC composed of following NDC composed of following members:members:The Prime Minister of IndiaThe Prime Minister of IndiaAll state CMAll state CMMember of Planning CommissionMember of Planning Commission

Objective of Planning in IndiaObjective of Planning in India

Attainment of higher rate of Attainment of higher rate of economic growtheconomic growth

Reduction of economic inequalitiesReduction of economic inequalities Achieving full employmentAchieving full employment Attaining economic self relianceAttaining economic self reliance Modernization of various sectorsModernization of various sectors Redressing imbalances in the Redressing imbalances in the

economyeconomy

In India , Progress of PlansIn India , Progress of Plans

Plan Period Total Outlay Actual Net in Public Sector(Rs. Croregrowth%p.a

First Five Year Plan 1951-56 1960 3.7

Second Five Year Plan1956-61 4672 4.1

Third Five Year Plan 1961-66 8577 2.5

Three One-YearPlans 1966-69 6625 3.9

Fourth Five year Plan 1969-74 15779 3.3

Fifth Five Year Plan 1974-78 39426 5

Sixth Five Year Plan 1980-85 1,10,467 5.4

Seventh Five Year Plan1985-90 2,21436 5.8

Two Annual Plans 1990-92 1,23,120 3.3

Eighth Five Year Plan 1992-97 4,85,457 6.7

Ninth Five Year Plan 1997-2002 8,59,200 5.5

Tenth Five Year Plan 2002-07 15,92,300 7.8

11stst 5 years plan : 1951 - 1956 5 years plan : 1951 - 1956

The first Indian The first Indian Prime Minister, Jawaharlal Prime Minister, Jawaharlal NehruNehru presented the first five-year plan to the presented the first five-year plan to the Parliament of India on Parliament of India on December 8, 1951December 8, 1951. .

The total plan The total plan budget budget of 206.8 billion INR of 206.8 billion INR was was allocated to seven broad areasallocated to seven broad areas:: Irrigation and energy (27.2 %),Irrigation and energy (27.2 %), Agriculture and community development Agriculture and community development

(17.4 percent)(17.4 percent) Transport and communications (24 percent)Transport and communications (24 percent) IndustryIndustry (8.4 percent), (8.4 percent), Social services (16.64 percent), Social services (16.64 percent), Land rehabilitation 4.1 percent), Land rehabilitation 4.1 percent), Other (2.5 percent). Other (2.5 percent).

22ndnd 5year Plan : 1956 - 1961 5year Plan : 1956 - 1961

The second five-year plan focused The second five-year plan focused on on industryindustry, , especially heavy especially heavy industry.industry. Domestic production of Domestic production of industrial products was encouraged, industrial products was encouraged, particularly in the development of the particularly in the development of the public sector. public sector.

The plan followed the The plan followed the Mahalanobis Mahalanobis ModelModel, an economic development , an economic development model developed by the Indian model developed by the Indian statistician statistician Prasanta Chandra Prasanta Chandra Mahalanobis in 1953. Mahalanobis in 1953.

33rdrd 5year Plan : (1961-1966) 5year Plan : (1961-1966)

The third plan stressed on The third plan stressed on agricultureagriculture, but , but the brief Sino-Indian War in 1962 exposed the brief Sino-Indian War in 1962 exposed weaknesses in the economy and shifted weaknesses in the economy and shifted the focus towards defence. the focus towards defence.

In In 1965-19661965-1966, the , the Green RevolutionGreen Revolution in in India advanced agriculture. The war led to India advanced agriculture. The war led to inflation and the priority was shifted to price inflation and the priority was shifted to price stabilization. stabilization.

44thth 5year Plan : (1969-1974) 5year Plan : (1969-1974) At this time At this time Indira GandhiIndira Gandhi was the Prime was the Prime

Minister. The Indira Gandhi government Minister. The Indira Gandhi government nationalized 19 major Indian banks. nationalized 19 major Indian banks.

In addition, the situation in East Pakistan In addition, the situation in East Pakistan (now independent Bangladesh) was (now independent Bangladesh) was becoming dire as the Indo-Pakistani War becoming dire as the Indo-Pakistani War of 1971 and Bangladesh Liberation War of 1971 and Bangladesh Liberation War took place.took place.

Funds earmarked for the industrial Funds earmarked for the industrial development had to be used for the war development had to be used for the war effort.effort.

55thth 5year Plan : (1974-1979) 5year Plan : (1974-1979)

Stress was laid on Stress was laid on employment, employment, poverty alleviation, and justicepoverty alleviation, and justice. .

The plan also focused on The plan also focused on self-self-reliance in agricultural reliance in agricultural production and defense. production and defense.

In 1978 the newly elected In 1978 the newly elected Morarji Desai government Morarji Desai government rejected the plan. rejected the plan.

66thth 5year Plan : (1980-1985) 5year Plan : (1980-1985) Called the Called the Janata government planJanata government plan, the , the

sixth plan marked a reversal of the sixth plan marked a reversal of the Nehruvian model.Nehruvian model.

Rajiv GandhiRajiv Gandhi, the young prime minister , the young prime minister aimed for aimed for rapid industrial development,rapid industrial development, especially in the area of especially in the area of information information technology.technology.

The The Indian national highway systemIndian national highway system was was introduced for the first time and many introduced for the first time and many roads roads were widenedwere widened to accommodate the to accommodate the increasing traffic. increasing traffic.

The sixth plan also The sixth plan also marked the beginning marked the beginning of economic liberalizationof economic liberalization. Price controls on . Price controls on prices was eliminated and ration shops prices was eliminated and ration shops were closed. were closed.

77thth 5year Plan : (1985-1989) 5year Plan : (1985-1989)

The Seventh Plan marked the The Seventh Plan marked the comeback of the comeback of the Congress Congress PartyParty to power. to power.

The plan lay stress on improving The plan lay stress on improving the productivity level of the productivity level of industriesindustries by upgradation of by upgradation of technology. technology.

Period between 1989-91 Period between 1989-91 1989-911989-91 was a period of was a period of political instability political instability

in India and hence in India and hence no five year plan no five year plan was was implemented. implemented.

P.V. Narasimha Rao - Father of Indian P.V. Narasimha Rao - Father of Indian Economic Reforms, led one of the most Economic Reforms, led one of the most important administrations in India's modern important administrations in India's modern history overseeing a major economic history overseeing a major economic transformation and several incidents transformation and several incidents affecting national security.affecting national security.

At that time Dr. Manmohan Singh launched At that time Dr. Manmohan Singh launched India's free market reforms that brought the India's free market reforms that brought the nearly bankrupt nation back from the edge. nearly bankrupt nation back from the edge. It was the beginning of privatization and It was the beginning of privatization and liberalization in India. liberalization in India.

88thth 5year Plan : (1992-1997) 5year Plan : (1992-1997)

Modernization of industriesModernization of industries was a was a major highlight of the Eighth Plan. major highlight of the Eighth Plan.

Under this plan, the gradual opening Under this plan, the gradual opening of the Indian economy was of the Indian economy was undertaken to correct the fiscal undertaken to correct the fiscal deficit and foreign debt. deficit and foreign debt.

Meanwhile Meanwhile India became a member India became a member of the World Trade Organization on 1 of the World Trade Organization on 1 January 1995. January 1995.

99thth 5year Plan : (1997-2002) 5year Plan : (1997-2002)

During the Ninth Plan period, During the Ninth Plan period, the growth rate was 5.35 per the growth rate was 5.35 per cent, a percentage point lower cent, a percentage point lower than the target GDP growth of than the target GDP growth of 6.5 per cent. 6.5 per cent.

1010thth 5year Plan (2002-2007) 5year Plan (2002-2007)

The main objectives of the 10th Five-The main objectives of the 10th Five-Year Plan are:Year Plan are: Reduction of poverty by 5 percentage Reduction of poverty by 5 percentage

points by 2007; points by 2007; All children in India in school by 2003; all All children in India in school by 2003; all

children to complete 5 years of children to complete 5 years of schooling by 2007; schooling by 2007;

Reduction in gender gaps in literacy and Reduction in gender gaps in literacy and wage rates by at least 50% by 2007; wage rates by at least 50% by 2007;

Increase in Literacy Rates to 75 per cent Increase in Literacy Rates to 75 per cent within the Tenth Plan period (2002-3 to within the Tenth Plan period (2002-3 to 2006-7); 2006-7);

1010thth 5year Plan (2002-2007) 5year Plan (2002-2007)

The main objectives of the 10th Five-The main objectives of the 10th Five-Year Plan are:Year Plan are: Reduction of Maternal Mortality Ratio Reduction of Maternal Mortality Ratio

(MMR) to 2 per 1000 live births by 2007 (MMR) to 2 per 1000 live births by 2007 and to 1 by 2012; and to 1 by 2012;

Increase in forest and tree cover to 25 Increase in forest and tree cover to 25 per cent by 2007 and 33 per cent by per cent by 2007 and 33 per cent by 2012; 2012;

Cleaning of all major polluted rivers by Cleaning of all major polluted rivers by 2007 and other notified stretches by 2007 and other notified stretches by 2012; 2012;

Economic Growth further accelerated Economic Growth further accelerated during this period and crosses over 8% during this period and crosses over 8% by 2006. by 2006.

Eleventh Five Year Plan (2007-2012)Eleventh Five Year Plan (2007-2012) Entitled- “ Towards Faster and More Entitled- “ Towards Faster and More

Inclusive Growth”- Approved by Inclusive Growth”- Approved by Planning CommissionPlanning Commission

Priority Areas- Agriculture, irrigation Priority Areas- Agriculture, irrigation and Water Resources, and Water Resources, education,Health, Infrastructure, education,Health, Infrastructure, Employment, Programmes for Employment, Programmes for upliftment of SC/ST, other backward upliftment of SC/ST, other backward classes, minorities, women and classes, minorities, women and children children

Emphasis on Social JusticeEmphasis on Social Justice

Sectoral Growth Targets of 11Sectoral Growth Targets of 11thth PlanPlan

Area Growth Rate(% p.a)

GDP 9Agriculture 4.1Industry 10.5Service 9.9Export(in US$) 16.4Imports( in US$) 12.5

1111thth 5year Plan 5year Plan

The eleventh plan has the The eleventh plan has the following key concernfollowing key concern Income & PovertyIncome & PovertyEducation Education Health Health Women and Children Women and Children Infrastructure Infrastructure Environment Environment

Income & PovertyIncome & Poverty Accelerate GDP growth from 8% to 10%Accelerate GDP growth from 8% to 10%

and then maintain at 10% in the 12th Plan and then maintain at 10% in the 12th Plan in order to double per capita income by in order to double per capita income by 2016-17 2016-17

Increase Increase agricultural GDP growth rate to agricultural GDP growth rate to 4% per yea4% per year to ensure a broader spread of r to ensure a broader spread of benefits benefits

Create Create 70 million new work opportunities70 million new work opportunities. . Reduce Reduce educated educated unemploymentunemployment to to below below

5%. 5%. Raise real wage rate of unskilled workersRaise real wage rate of unskilled workers

by by 20 percent.20 percent. ReducReduce the headcount ratio of e the headcount ratio of

consumption consumption poverty by 10 percentagepoverty by 10 percentage points. points.

EducationEducation Reduce dropout rates of childrenReduce dropout rates of children from from

elementary school elementary school from 52.2% from 52.2% in 2003-04 in 2003-04 to 20%to 20% by 2011-12 by 2011-12

Develop Develop minimum standards of educationalminimum standards of educational attainment in elementary school, and by attainment in elementary school, and by regular testing monitor effectiveness regular testing monitor effectiveness of of education to ensure quality education to ensure quality

Increase literacy rateIncrease literacy rate for persons of age 7 for persons of age 7 years or more to years or more to 85% 85%

Lower gender gap in literacyLower gender gap in literacy to to 1010 percentage points percentage points

IncreaseIncrease the percentage of each the percentage of each child child going to higher educationgoing to higher education from the present from the present 10% to 15%10% to 15% by the end of the plan by the end of the plan

HealthHealth

Reduce infant mortality rateReduce infant mortality rate to to 28 28 and and maternal mortality rate maternal mortality rate to 1 per 1000 live births to 1 per 1000 live births

Reduce Total Fertility Rate to Reduce Total Fertility Rate to 2.1 2.1

Provide Provide clean drinking waterclean drinking water for for all all by 2009by 2009 and ensure that and ensure that there are no slip-backs there are no slip-backs

Reduce malnutritionReduce malnutrition among among children of children of age group 0-3 to half age group 0-3 to half its present level its present level

Women and Children Women and Children Raise the sex ratio Raise the sex ratio for age group for age group 0-60-6

to to 935 by 2011-12935 by 2011-12 and to and to 950 by 950 by 2016-17 2016-17

Ensure that Ensure that at least 33 percent of at least 33 percent of the the direct and indirect direct and indirect beneficiaries of all beneficiaries of all government schemes are women government schemes are women and girl children and girl children

Ensure that all Ensure that all children enjoy a safe children enjoy a safe childhood,childhood, without any compulsion to without any compulsion to work work

Infrastructure Infrastructure

Ensure electricity connection to all villages Ensure electricity connection to all villages and BPL households by 2009 and round-and BPL households by 2009 and round-the-clock power. the-clock power.

Ensure all-weather road connection to all Ensure all-weather road connection to all habitation with population 1000 and above habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation ensure coverage of all significant habitation by 2015 by 2015

Connect every village by telephone by Connect every village by telephone by November 2007 and provide broadband November 2007 and provide broadband connectivity to all villages by 2012 connectivity to all villages by 2012

Provide homestead sites to all by 2012 and Provide homestead sites to all by 2012 and step up the pace of house construction for step up the pace of house construction for rural poor to cover all the poor by 2016-17 rural poor to cover all the poor by 2016-17

Environment Environment

Increase Increase forest and tree cover forest and tree cover by 5 percentageby 5 percentage points. points.

Attain Attain WHO standards of air WHO standards of air qualityquality in all major cities by in all major cities by 2011-12. 2011-12.

Treat all Treat all urban waste water by urban waste water by 2011-12 to clean river waters2011-12 to clean river waters. .

Increase Increase energy efficiency by 20 energy efficiency by 20 percentage percentage points by 2016-17. points by 2016-17.