five year plans in indian economy

7/29/2019 Five Year Plans in Indian Economy

1/26

Five Year Plans in Indian

Economy


2/26

A PLAN A Plan is a deliberate attempt to spell out how the

resources of a country should be put to use. It has some general and specific goals, which are

to be achieved within a specific period of time.

The general goals of a Plan are growth,

modernization, full employment, self-reliance andequity. But all Plans may not give equalimportance to all of them.

Each Plan can have some specific goals like

improvement of agriculture. For example our firstfive-year plan was geared to improving the stateof agriculture and the second to improvingIndustry.


3/26

Planning commission of India

The Planning Commission was set up in March,

1950 by a Resolution of the Government of India. The economy of India is based on planning

through its five-year plans, developed, executed

and monitored by the Planning Commission .With the Prime Minister as the ex officia

Chairman, the commission has a nominated

Deputy Chairman, who has rank of a Cabinet

minister. Montek Singh Ahluvaliya is currentlythe Deputy Chairman of the Commission. The

tenth plan completed its term in March 2007 and

the eleventh plan is currently underway.


4/26

First plan (1951-1956)1. The first Indian Prime Minister, Javaharlal Nehru

presented the first five-year plan to the Parliament ofIndia on December 8, 1951.

2. The first plan sought to get the country's economy outof the cycle of poverty.

3. The plan addressed, mainly, the agrarian sector,

including investments in dams and irrigation.Agricultural sector was hit hardest by partition andneeded urgent attention.

4. The total plan budget of 206.8 billion INR (23.6

billion USD in the 1950 exchange rate) was allocatedto seven broad areas: irrigation and energy (27.2percent), agriculture and community development(17.4 percent), transport and communications (24percent), industry (8.4 percent), social services (16.64

percent), land rehabilitation (4.1 percent), and other(2.5 percent).


5/26

4. The target growth rate was 2.1 percent annual grossdomestic product (GDP) growth; the achieved growth

rate was 3.6 percent.5. During the first five-year plan the net domestic product

went up by 15 percent.

6. The monsoon was good and there were relatively high

crop yields, boosting exchange reserves and the percapita income, which increased by 8 percent.

7. National income increased more than the per capitaincome due to rapid population growth.

8. Many irrigation projects were initiated during thisperiod, including the Bhakra Dam and Hirakud Dam.

9. The World Health Organization, with the Indiangovernment, addressed children's health and reducedinfant mortality, indirectly contributing to population

growth.


6/26


7/26

Second plan (1956-1961)1. The second five-year plan focused on industry,

especially heavy industry.2. Domestic production of industrial products was

encouraged, particularly in the development of thepublic sector.

3. The plan followed the Mahalanobis model, aneconomic development model developed by the Indianstatistician Prasanta Chandra Mahalanobis in 1953.

4. It used the existing art techniques of operation and

research as well as the novel applications of statisticalmodels developed at the Indian Statiatical Institute.

5. The plan assumed a closed economy in which the maintrading activity would be centered on importing capital

goods.


8/26

6. Hydroelectric power projects and five steel mills atBhilai, Durgapur, and Rourkela were established.

7. Coal production was increased.

8. More railway lines were added in the north east.

9. The Atomic Energy Commission was formed in 1957with Homi J. Bhabha as the first chairman.

10.The Tata Institute of Fundamental Research wasestablished as a research institute.

11.In 1957 a talent search and scholarship program wasbegun to find talented young students to train for workin nuclear power.


9/26

Third plan (1961-1966)1. The third plan stressed on agriculture and improving

production of rice.

2. The Sino-Indian war led to inflation and the prioritywas shifted to price stabilization.

3. The construction of dams continued.

4. Many cement and fertilizer plants were also built.

5. Punjab began producing an abundance of wheat.

6. Many primary schools were started in rural areas.

7. Panchayat elections were started and the states were

given more development responsibilities.8. State electricity boards and state secondary education

boards were formed.

9. State road transportation corporations were formed and

local road building became a state responsibility


10/26

Fourth plan (1969-1974)

1. The Indira Gandhi government nationalized 14 major

Indian banks and the Green Revolution in Indiaadvanced agriculture.

2. In addition, the situation in East Pakistan (nowindependent Bangladesh) was becoming dire as the

Indo-Pakistani War of 1971 and Bangladesh LiberationWar took place. Funds earmarked for the industrialdevelopment had to be used for the war effort.

3. India also performed the Smiling Buddha underground

nuclear test in 1974, partially in response to the UnitedStates deployment of the Seventh Fleet in the Bay ofBengal to warn India against attacking West Pakistanand widening the war.


11/26

Fifth plan (1974-1979)

1. Stress was laid on employment, povertyalleviation, and justice.

2. The plan also focused on self-reliance in

agricultural production and defense.3. Electricity Supply Act was enacted in 1975,

which enabled the Central Government to

enter into power generation and transmission4. In 1978 the newly elected Morarji Desai

government rejected the plan.


12/26

Sixth plan (1980-1985)1. When Rajiv Gandhi was elected as the prime minister, the

young prime minister aimed for rapid industrialdevelopment, especially in the area of informationtechnology.

2. The Indian national highway system was introduced for thefirst time and many roads were widened to accommodatethe increasing traffic.

3. Tourism also expanded.

4. The sixth plan also marked the beginning of economicliberalization. Price controls were eliminated and rationshops were closed. This led to an increase in food prices

and an increased cost of living.5. Family planning also was expanded in order to preventoverpopulation. More prosperous areas of India adoptedfamily planning more rapidly than less prosperous areas,which continued to have a high birth rate.


13/26

Seventh plan (1985-1989)1. The Seventh Plan marked the comeback of the Congress Party to

power.2. The plan lay stress on improving the productivity level of

industries by upgradation of technology.

3. The thrust areas of the 7th Five year plan have been enlisted below:

Social Justice Removal of oppression of the weak

Using modern technology

Agricultural development

Anti-poverty programs Full supply of food, clothing, and shelter

Increasing productivity of small and large scale farmers

Making India an Independent Economy


14/26

Based on a 15-year period of striving towards steady growth,the 7th Plan was focused on achieving the pre-requisites ofself-sustaining growth by the year 2000.

5. The Plan expected a growth in labor force of 39 millionpeople and employment was expected to grow at the rate of 4percent per year.

6. Some of the expected outcomes of the Seventh Five Year PlanIndia are given below:

Balance of Payments (estimates): Export - Rs. 33thousand crore, Imports - (-)Rs.54 thousand crore, TradeBalance - (-)Rs.21 thousand crore

Merchandise exports (estimates): Rs. 60,653 crore

Merchandise imports (estimates): Rs. 95,437 crore

Projections for Balance of Payments: Export - Rs.60.7thousand crore, Imports - (-) 95.4 thousand crore, Trade

Balance- (-) Rs.34.7 thousand crore


15/26

Period between 1989-911. 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.2. In 1991, India faced a crisis in Foreign Exchange (Forex)reserves, left with reserves of only about $1 billion (US).Thus, under pressure, the country took the risk ofreforming the socialist economy.

3. P.V. Narasimha Rao (28 June 1921

23 December 2004),also called Father of Indian Economic Reforms, was thetwelfth Prime Minister of the Republic of India and head ofCongress Party, and led one of the most importantadministrations in India's modern history overseeing amajor economic transformation and several incidentsaffecting national security.

4. At that time Dr. Manmohan Singh launched India's freemarket reforms that brought the nearly bankrupt nationback from the edge. It was the beginning of privatizationand liberalization in India.


16/26

Eighth plan (1992-1997)1. Modernization of industries was a major highlight of the

Eighth Plan.

2. Under this plan, the gradual opening of the Indianeconomy was undertaken to correct the burgeoning deficitand foreign debt.

3. Meanwhile India became a member of the World TradeOrganization on 1 January 1995.This plan can be termed asRao and Manmohan model of Economic development.

4. The major objectives included, containing populationgrowth, poverty reduction, employment generation,strengthening the infrastructure, Institutional building,Human Resource development, Involvement of Panchayat

raj, Nagarapalikas, N.G.OSand Decentralisation andpeoples participation.

5. Energy was given prority with 26.6% of the outlay.

6. An average annual growth rate of 6.7% against the target5.6% was achieved.

Ni h Pl (1997 2002)


17/26

Ninth Plan (1997 - 2002)1. Ninth Five Year Plan of India runs had the main aim of

attaining objectives like speedy industrialization, human

development, full-scale employment, poverty reduction, andself-reliance on domestic resources.

2. Ninth Five Year Plan was formulated amidst the backdrop ofIndia's Golden jubilee of Independence.

3. The main objectives of the Ninth Five Year Plan India are: to prioritize agricultural sector and emphasize on the rural

development

to generate adequate employment opportunities andpromote poverty reduction

to stabilize the prices in order to accelerate the growth rateof the economy

to ensure food and nutritional security


18/26

to provide for the basic infrastructural facilities likeeducation for all, safe drinking water, primary health care,transport, energy

to check the growing population increase

to encourage social issues like women empowerment,conservation of certain benefits for the Special Groups ofthe society

to create a liberal market for increase in privateinvestments

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

T th l (2002 2007)


19/26

Tenth plan (2002-2007)1. The main objectives of the 10th Five-Year Plan were:

Reduction of poverty ratio by 5 percentage points by

2007;

Providing gainful and high-quality employment at least to

the addition to the labour force;

All children in India in school by 2003; all children to

complete 5 years of schooling by 2007;

Reduction in gender gaps in literacy and wage rates by at

least 50% by 2007;

Increase in Literacy Rates to 75 per cent within the Tenth

Plan period (2002 to 2007);

Reduction in the decadal rate of population growth

between 2001 and 2011 to 16.2%;


20/26

Reduction of Infant mortality rate (IMR) to 45 per 1000

live births by 2007 and to 28 by 2012;

Reduction of Maternal Mortality Ratio (MMR) to 2 per

1000 live births by 2007 and to 1 by 2012;

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

and 33 per cent by 2012;

All villages to have sustained access to potable drinking

water within the Plan period;

Cleaning of all major polluted rivers by 2007 and other

notified stretches by 2012;

2. Economic Growth further accelerated during this period

and crosses over 8% by 2006.

El h l (2007 2012)


21/26

Eleventh plan (2007-2012) The eleventh plan has the following objectives:

1. Income & Poverty

Accelerate GDP growth from 8% to 10% and then

maintain at 10% in the 12th Plan in order to double per

capita income by 2016-17

Increase agricultural GDP growth rate to 4% per year to

ensure a broader spread of benefits

Create 70 million new work opportunities.

Reduce educated unemployment to below 5%.

Raise real wage rate of unskilled workers by 20 percent.

Reduce the headcount ratio of consumption poverty by

10 percentage points.


22/26

2.Education

Reduce dropout rates of children from elementaryschool from 52.2% in 2003-04 to 20% by 2011-12

Develop minimum standards of educational attainment

in elementary school, and by regular testing monitoreffectiveness of education to ensure quality

Increase literacy rate for persons of age 7 years orabove to 85%

Lower gender gap in literacy to 10 percentage pointsIncrease the percentage of each cohort going to higher

education from the present 10% to 15% by the end ofthe plan


23/26

3.Health

Reduce infant mortality rate to 28 and maternal

mortality ratio to 1 per 1000 live births

Reduce Total Fertility Rate to 2.1

Provide clean drinking water for all by 2009 and ensure

that there are no slip-backs

Reduce malnutrition among children of age group 0-3

to half its present level Reduce anaemia among women and girls by 50% by

the end of the plan


24/26

4.Women and Children

Raise the sex ratio for age group 0-6 to 935 by 2011-12

and to 950 by 2016-17

Ensure that at least 33 percent of the direct and indirect

beneficiaries of all government schemes are women and

girl children

Ensure that all children enjoy a safe childhood, without

any compulsion to work


25/26

5.Infrastructure

Ensure electricity connection to all villages and BPL

households by 2009 and round-the-clock power.

Ensure all-weather road connection to all habitation with

population 1000 and above (500 in hilly and tribal areas) by2009, and ensure coverage of all significant habitation by

2015

Connect every village by telephone by November 2007 and

provide broadband connectivity to all villages by 2012

Provide homestead sites to all by 2012 and step up the pace

of house construction for rural poor to cover all the poor by

2016-17


26/26

6.Environment

Increase forest and tree cover by 5 percentage points.

Attain WHO standards of air quality in all major cities

by 2011-12.

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

waters.

Increase energy efficiency by 20 percentage points by

2016-17.

five year plans in indian economy

Documents