economic planning babita

8/8/2019 Economic Planning Babita

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Presented by:-

Babita, Gaurav,Bhaskar,

Bhuwanehswar,

Durgesh, Deepak


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Planning may be defined asdeciding in advance what is to bedone in future. It is the process ofthinking before doing.

Definition :-

According to Henry fayol,planning is deciding the best

alternatives among others toperform different managerialoperations in order to achieve thepre-determined goals


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The government has to prepare andimplement a comprehensive economicplan integrating the private sector withthe public sector. It is for these reasonsthat we have been having economic

planning since 1951 when the first fiveyear plan was launched.

Definition:-

According to Dickinson, economic

planning is the making of all majoreconomic decisions by consciousdecisions of comprehensive survey ofthe economic system as a whole.


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Targets

Time schedule

Resource limits

Objectives

Overall planning

Undivided authority


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Increase in National Income

Full Employment

Reduction in Inequalities of

Income and Capital

Social Justice

Other Objectives:-

Removal of poverty, expansion ofindustries,improve the economicstandard of the people.


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The two major agencies which areresponsible for economic planning in Indiaare the Planning Commission and theNational Development Council

Planning Commission:

Set up in March 1950 and has the followingfunctions:

To formulate a plan for the most effectiveand balanced utilization of the countrys

resources India is a federal state and the Centre gives

money to the States. The PlanningCommission serves as an intermediary forthe allocation of funds to the States.


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Main Funtions

-To prescribe guidelines for the formulation ofthe National Plan.

-To consider the National Plan as formulatedby the Planning Commission

-To periodically review the working of thePlan.

-In addition every State has its own Planning

Board.


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The Prime Minister is the Chairman of

the Planning Commission, which works

under the overall guidance of the

National Development Council.


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Deputy Chairman

Shri. MV

Rajshekharan

Dr. Kirit Parikh

Prof. Abhijit Sen

MemberMember

Mr. Montex singh

Aahuwaliya


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Syeda Saiyidain

Hameed

Dr. Bhalchandra

Mungekar

Dr. VL Chopra


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Shri. B.K.

Chaturvedi

Shri. B.N.

Yugandhar


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- The First Five Year Plan was launched in 1951.

The process of implementation of the Five YearPlans was disrupted in 1966 and the Fourth FiveYear Plan was put off by three years due to thesevere drought in the country and aggressionsfrom China and Pakistan.

-The intervention period between the Third andFourth Five Year Plans had annual Plans. Thisperiod is referred to as Plan Holiday.

-On assuming power in 1977, the JanataGovernment introduced the Five Year Plan (1978-83) and introduced the concept of Rolling Plan.Under the rolling plan, when one year lapsesanother year is added to the planning horizon sothat there is always a five year plan. On comingto power in 1980, the Congress Governmentterminated the Plan and formulated the Sixth

Plan 1980-85


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The First Five Year Plan (1951-56):

The immediate objective of this plan wasrehabilitation of refugees, rapid agriculturalgrowth and control of inflation.

These objectives were by and large achieved.The production targets in the agricultural sectorwere more or less fulfilled largely due tofavorable climate.

The Second Five Year Plan (1956-61):

The Second Plan aimed at rapidindustrialization with emphasis on the

development of basic and heavy industriessuch as iron and steel, heavy engineering. TheIndustrial Policy was formulated in 1956.

The target of this plan could not be achieveddue to shortage of foreign exchange and risingprices.


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The Third Five Year Plan (1961-66): This Plan aimed at the establishment of a self

reliant and self generating economy.

High priority was assigned to the agriculturalsector and development of heavy industries.

However, the approach had to be shifted todefence due to conflicts with China (1962) andPakistan(1965).

The Fourth Five Year Plan (1969-74):

This Plan had the objectives of growth with

stability and progressive achievement of selfreliance.

It was successful during the first two years. Butit was hit by monsoon failure, power shortageand inflation in the remaining years.

.


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The Fifth Five Year Plan (1974-79):

Removal of poverty and self reliance were the

main objectives. It was drafted in late 1973 when crude oil prices

were rising rapidly.

The plan was subsequently approved in late1976 but was terminated at the end of 1977.

T

he fifth plan was in effect only one year.


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The Sixth Five Year Plan(1980-84):

There were two Sixth Plans.

One by the Janata Government and the other by

the Congress Government in 1980.

The objective was removal of poverty. Broadlyspeaking this plan was a success

The Seventh Five Year Plan (1985-90):

This aimed at accelerating the growth in foodgrains production, increasing employment and

raising productivity.

Gap between(1989-1991)-

1989-91 was a period of political instability in India

and hence no five year plan was implemented.

Between 1990 and 1992, there were only Annual Plans.


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The Tenth Five Year Plan (2002-07): This Plan was introduced in April 2002. The Plan was launched when there were both

positive and negative features. Positive being, GDP growth rate was at 6.5% p.a.

Population growth had declined to less than 2%.Percentage of people below the poverty line wasdecreasing.

Literacy rate increased to 65% in 2001. Softwareand IT Services emerged as new sectors ofstrength.

Negatives were that growth had generated lessthan expected employment. The infant mortality rate had stagnated and there

was acute shortage of drinking water.


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A major advantage in formulating the 11th. Plan is that

Indias economic fundamentals have improvedenormously and we now have the capacity to make adecisive impact on the quality of life, especially on thepoor and marginalized.

The objective of the Plan is Towards faster and moreinclusive growth.

The 11th Plan aims to increase the average economicgrowth to nine per cent from 7.6 per cent in the Tenth

Plan.

The 11th Plan also proposes to increase farm sectorgrowth rate to four per cent from 2.13 per cent in theprevious Plan.

The Plan, which has been formulated with the aim of

making economic growth more inclusive, proposes toreduce poverty by ten percentage points

This Plan aims to generate seven crore newemployment opportunities and reduce unemploymentamong educated persons to less than five per cent.

Extend access to essential public services such ashealth, education, clean drinking water and sanitation.


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.

The Plan will also focus on the educationsector by increasing the outlay to 19 percent of the Central budgetary support fromless than eight per cent in the previousPlan.

Literacy rate to be increased to 85% and thegender gap in literacy to be reduced to 10percentage points.

Create an enabling environment for thesocio, political and economic empowermentof women.

Protection of the environment. Forest coverto be increased by 5 percentage points andessential requirement to clean up ourrivers.

Pay special attention to the needs andrequirements of the SC / STs and other

excluded groups and bring them on par


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Growth of National and Per Capita Income:There has been an increase in both but not to theextent the planners expected. NY increased bynearly 6.4 times.

Growth in Employment: There has beenconsiderable increase in employment opportunities

during the Plans. But these proved inadequate. Slowgrowth in agriculture and industry, theconcentration of investment in the capital goodsindustries have been responsible for the failure tomeet the needs of the rising labor force.

Distributive Justice: The role of Zamindars has been considerably reduced. However there have been no material change in the distribution ofincome or wealth in rural India. In the industrialsector too the economic power of the large businesshouses has been increasing. Much still remains to bedone.


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Self-reliance: Considerable progress hasbeen made towards the achievement of thisgoals but a sizeable portion(10%) of ourdevelopment expenditure comes fromforeign sources. Moreover the central

objective of self-reliance now is not selfsufficiency but internationalcompetitiveness.

Industrial Progress: A major accomplishment has been thediversification of industries and expansionof industrial capacity. The country is selfsufficient in consumer goods. The growthof capital production has been quiteimpressive.


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Growth performance in the five year plan

(percent per

annum)

Target Actual

1)First plan(1951-56) 2.1 3.61

2)Second plan(1956-61) 4.5 4.27

3)Third plan(1961-66) 5.6 2.84

4)Fourth plan(1969-74) 5.7 3.30

5)Fifth plan(1974-79) 4.4 4.80

6)Sixth plan(1980-85) 5.2 5.66

7)Seventh plan(1985-90) 5.0 6.01

8)Eight plan(1992-97) 5.6 6.78

10)Tenth plan(2002-07) 8.0 -

9)Ninth plan(1997-02) 6.5 5.4


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Target GDP growth rate in

11th

plan

7.0% 8.0% 9.0%

Average investment rate 29.1 32.0 35.1

Average CAD at % of GDP 2.0 2.4 2.8

Domestic savings rate: of

which

27.1 29.6 32.3

a) household 20.1 20.5 21.0

b)corporate 5.0 5.5 6.1

C)PSEs 3.1 3.1 2.8

d)Government -1.1 0.5 2.4


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Rivalries of state

Neglect of private sector

Political set up of the country Too much emphasis on public sector

Lack of preparation

Dependence on foreign collaboration

No consideration for rising prices Unrealistic plan

Low priority to industry

Lack of Co-ordination


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On the bases of facts and figures Economic

Planning is very important for everycountry. Because of excellent economic

planning now we are one of the parts of

developing countries. On the bases of need

in certain sectors government introducedfive years plan for better development. Now

Indias GDP growth is very high as compare

with other countries and that is because of

better planning. After introduced 1991

policy the growth of India became veryfaster because of liberalization and licensing

in different sectors. Because of liberalization

the rate Foreign Direct Investment

increased after 1991.


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economic planning babita

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