a critic’s eye on the indian five

8/9/2019 A Critics eye on the Indian Five

1/37

Prepared by-

Group 4

Abhirup Nag : 001

Dhara Badiani : 012

Gunjan Agrawal : 037

Chinmayee Dash : 018

Mukesh K. Singh : 003

Arindam Mitra : 002


2/37

y Lionel Charles Robbins, a British economist who wasnot a follower of Marshall but Jevons and Wickstead

y Wrote An Essay on the Nature and Significance of

Economic sciencey Coined the concept of The Great Depression caused

by under-saving

y Introduced The Robbins Principle


3/37

y Planning is, not a once-for all exercise for a fiveyear period, it requires a continual watch oncurrent or incipient trends, systematic observation

of technical, economic and social data andadjustments of programmes in the light of newrequirements.


4/37

yA development tool for the economy

y To overcome limitations of market mechanism

y The need for social justice

y Resource mobilization and allocation in thecontext of overall development progeamme


5/37

y Planning body

y Collection of data through survey

y Planning objectives

y Priorities

y Development strategy

y Balancing in the plan

yAdministrative efficiency


6/37

y Indian plans are comprehensive

y Unreliable data

y Physical planning


7/37

The 1st Five year plan (1951-56)

y Problems faced- influx of refugees, food shortageand mounting inflation

y Emphasized on- rehabilitation of refugees, rapidagricultural development and inflation control


8/37

yAgriculture was given a low priority.

y Development of heavy and basic industries of theeconomy

y Government introduced industrial policy 1956focussing on a socialistic form of economy andrapid industrialisation


9/37

y To focus on a self reliant and self generatingeconomy.

y To focus on agriculture sector again as it was

discovered that the rate of growth of agricultureproduction was the limiting factor towardseconomic growth.

yWars with china and pakistan made the countrydevote more to defence and development


10/37

y Original plan prepared by Ashok mehta wasabondoned on account of the pressure on the economydue to 2 years of drought, devaluation of the rupee and

inflation.y Ultimately it focused on growth with stability.

y Aimed at achieving 5.5% rate of growth in nationalincome and the garibi hatao mantra


11/37

y Was introduced when the country was reeling underan economic crisis out of a run away inflation, fuelledby the hike in oil prices

y

The original paper of subramanium was succeeded bythe plan by Dhar focussing on removal of poverty andattainment of self reliance.


12/37

y Janata party rejected nehru model of growth thoughthey applauded the achievements of the economy interms of self reliance and modernisation

y

The party believed that the nehru model wasresponsible for unemployment and inequality ofincome

y But the congress came to power and revived the nehru

model and focused on expanding the economy tocounter poverty


13/37

y Was based on the backdrop of the country enjoying agrowth rate of 5.4% over the previous plan.

y It focused on production of food grains, increase of

employment opportunities and rise in productivity.


14/37

y Country was going through a severe economic crisiscaused by balance of payments crisis, rising debtburden, widening budgetary deficits and inflation

y

Narasimha rao government focused on acceleratingthe economic growth and improving the life ofcommon man


15/37

y Focused on growth with social justice and equality.

y Gave priority to agriculture and rural development inan effort to reduce poverty

y Aimed at achieving a GDP growth rate of 7%


16/37

y Aimed at achieving a GDP growth rate of 8%

y To renovate the nation extensively, making itcompetent enough with some of the fastest growing

economies across the globe


17/37


18/37

y Agriculture and Irrigation

y Power programmes

y Industries and Minerals

y Transportation and Communicationy Social and Miscellaneous services


19/37

y The first plan (1951-56) was a great success. Productiontargets in the agricultural sector were more thanfulfilled

y The second plan (1956-61) could not be implementedfully because of the acute shortage of foreign exchange


20/37

y The third plan(1961-66) was a major fiasco becausethe country suffered from famines. Besides India

had to go through two major conflicts with Chinaand Pakistan

y

Plan holiday for three years (1996-99)

y The fourth plan (1969-74) failed because of failureof monsoons, power break downs in industries and

influx of refugees from Bangladesh and IndoPakistan war of 1972. Target GNP 5.5 but achieved3.4


21/37

y The Fifth plan(1974-79) cost calculations failedbecause of inflation and the public sector outlay

had to be revised upwards

y

The sixth plan originally introduced by janataparty for the period 1978-83 but was replaced by anew sixth plan period 1980-85. Achieved growthrate of 5.5 of GNP


22/37

y The seventh plan (1985-90) was a great success asIndian Economy recorded growth of 6% as against

the target of 5%

y

The Eighth plan postponed for two years.Implemented for (1992-97). India registeredhighest growth rate of 6.8%. Economic reformsand liberalization took place


23/37

y The Ninth plan (1997-02) approved growth rate of7% but achieved 6.5%. Banking sector reforms and

capital market reforms undertaken

y

The Tenth plan(2002-07) achieved growth rate of8%. Service sector showed a major growth


24/37

1. Domestic Budgetary Resources-

y Surplus from current revenues

y Contribution of public enterprisesy Mobilization of internal private savings

2. Foreign assistance

3. Deficit financing


25/37


26/37

y Taxationy Direct taxes

y Merit : could be used to control inflation in india

y Demerit : Fall heavily on the higher income groups and aresteeply progressive. Adversely affect the ability and

willingness to work, save and invest

y Indirect taxesy Merit : major source of revenue to government

y

Demerit : burden falls on lower income group duringinflationary trends


27/37

y Profits of public undertakings: Depreciation and

profits of public enterprises could be used to financeexpansion of these enterprises

y Merit: good source to finance development expenditure

by using internal resources

y Demerit: performance of PSUS has been poor and theyhad to depend on Government budgetary support


28/37

Market loans and small savings:

Merits: Does not meet the public opposition as it is voluntary

Government has captive institutions who subscribe to theloans floated by it. E.g.: LIC

Demerits: The Government has to pay interest and return the principal

also at a future date

These burdens will have to be borne by future generations inthe form of higher taxation


29/37

y Foreign Assistance:

y Merits:y Foreign loans and grants constitute an important source of

financing economic growth

y Demerits:y Lending countries may exert political pressure

y The debtor country will later have to find resources to pay offinterest and the principal


30/37

y Deficit financing:

y Merits:y Will raise the money supply in the country

y Will raise the demand for goods and services

y Demerits:y By raising money supply deficit financing raises prices

y Once adopted by government becomes cumulative, withevery passing year it increases in volume and creates

inflationary pressure


31/37

Achievements of Planning in India-

(i) Increase in national and per capita income(at 1993-94 prices)

Year NNP (Rs. Crores) Per capita (Rs.)

1950-51 132,367 3,687

1960-61 192,235 4,429

1970-71 270,597 5,0021980-81 363,417 5,352

1990-91 614,206 7,321

1996-97 852,085 9,007

2001-02 11,15,171 10,754


32/37

(ii) Progress in Agriculture

(m. tonnes) 1950-51 1970-71 2001-02 Increase (%)1951-2002

Foodgrains 51 108 213 317

Rice 21 42 93 343

Wheat 7 24 73 942

Oilseeds 5 10 21 320

Sugarcane 57 126 297 421

Cotton 3 5 10 233

Jute & mesta 3 6 12 300

Potatoes 2 5 24 1100


33/37

(iii) Progress in Industry

(m. tonnes) 1950-51 1970-71 2001-02

Coal 32 76 353

Iron ore 3 32 76

Fertilisers 0.02 1 15

Cement 3 14 107

Finished Steel 1 5 31

Aluminium 4 169 552

Petroleum,crude

0.3 7 32

Electricity 5 56 579


34/37

(iv) Development of economic infrastructure

(v) Diversification of exports and import substitution

(vi) Development of science and technology

(vii) Development of a huge educational system


35/37

(i) Failure to eliminate poverty

(ii) Failure to provide employment to all able bodied persons

(iii) Failure to reduce inequalities of income and wealth

(iv) Failure to check the growth of black money(v) Failure to reduce concentration of economic power

(vi) Failure to implement land reforms


36/37

Questions please


37/37

a critic’s eye on the indian five

Documents