Five year plan summary

Five Year Plan- Introduction

A five year plan formed the most basic unit of planning in India. Efforts towards economic planning in India began even prior to independence.

National Planning Committee (1938)

In 1938, Subhas Chandra Bose succeeded Nehru as the President of the Indian National Congress and presided over the 51st session at Haripura. He spoke about planned economic development of independent India on socialistic lines. Consequently National Planning Committee in was set up in 1938. The NPC under Nehru wanted to emphasise that India must work towards achieving the goal of an independent economy based on its own resources, its own market and, as far as possible, on its capital accumulation. The NPC put great emphasis on the promotion of scientific and technological research. Institutions were to be established to achieve this end. Latest technologies could be imported on selective basis but only to promote self-reliance in the years to come. Peasants were to be guaranteed remunerative prices for their products and a reasonable relation was to be established between the prices of agricultural products and manufactured goods. Radical land reforms were to be carried out. Minimum wages were to be guaranteed to landless labourers. The sub-committee on land policy pleaded for cooperative farming so that resources could be used rationally.

The Bombay Plan (1944)

In 1944 Eight Industrialists of Bombay viz. Mr. JRD Tata, GD Birla, Purshottamdas Thakurdas, Lala Shriram, Kasturbhai Lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together prepared what is known as “Bombay Plan”. Mr. J. R. D. Tata and Mr. G. D. Birla were primarily responsible for the initiation. It recommended a substantially interventionist state and an economy with a sizeable public sector. The objectives were a doubling of the output of the agricultural sector and a five-fold growth in the industrial sector over a 15 year period. Although Jawaharlal Nehru did not officially accept the plan, his policies and subsequent five year plans were very close to the recommendations of the Bombay Plan

People’s Plan(1945)

People’s Plan(1945) was drafted by MN Roy. It gave equal importance to both agriculture and industries. This plan was for ten years. It recommended nationalization of all agriculture and production. This plan was based on Marxist socialism It involved chalking out the priorities of an area by the ward sabhas comprising the entire electorate of the ward of a local self-government institution such as a Panchayat, Municipality or Corporation. The plan chalked out by the ward sabhas would be implemented by a committee selected by the ward sabha and its implementation would be scrutinised by the ward sabha from time to time.

Gandhian Plan (1944)

This plan was drafted by Sriman Nayaran, principal of Wardha Commercial College. It emphasized the economic decentralization with primacy to rural development by developing the cottage industries.

Sarvodaya Plan(1950)

Sarvodaya Plan as drafted by Jaiprakash Narayan. This plan itself was inspired by Gandhian Plan and Sarvodaya Idea of Vinoba Bhave. This plan emphasized on agriculture and small & cottage industries. It also suggested the freedom from foreign technology and stressed upon land reforms and decentralized participatory planning. The plan also recommended the Luddite approach and was pessimistic towards the usage of foreign technology.

Five Year Plan

Five-Year Plans (FYPs) are centralized and integrated national economic programs. Joseph Stalin implemented the first FYP in the Soviet Union in the late 1920s. Most communist states and several capitalist countries subsequently later adopted them. In India the process began after independence with setting up of Planning Commission in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community. The Planning Commission was charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.

Five Year Plan: Breaks

The first Five-year Plan was launched in 1951 and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year plan was started in 1969.

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992.

1st five year plan (1951 to 1956): Target Growth : 2.1 % Actual Growth 3.6 %

It was based on Harrod-Domar. Influx of refugees, severe food shortage & mounting inflation confronted the country at the onset of the first five year Plan. The primary aim of the 1st five year plan was to improve living standards of the people of India. This could be done by making judicious use of India’s natural resources. The Plan focussed on agriculture, price stability, power and transport

The following Irrigation projects were started during that period:

• Mettur Dam
• Hirakud Dam
• Bhakra Dam

The government had taken steps to rehabilitate the landless workers, whose main occupation was agriculture. These workers were also granted fund for experimenting and undergoing training in agricultural know how in various cooperative institutions. Soil conservation, was also given considerable importance. The Indian government also made considerable effort in improving posts and telegraphs, railway services, road tracks, civil aviation. Sufficient fund was also allocated for the industrial sector. In addition measures were taken for the growth of the small scale industries.

It was a successful plan primarily because of good harvests in the last two years of the plan. Objectives of rehabilitation of refugees, food self sufficiency & control of prices were more or less achieved.

2nd Five year plan (1956 to 1961): Target Growth: 4.5% Actual Growth: 4.3%

Second plan was conceived in an atmosphere of economic stability. It was felt agriculture could be accorded lower priority. Industries got more importance in the 2nd five year plan. The focus was mainly on heavy industries. The Indian government boosted manufacturing of industrial goods in the country. This was done primarily to develop the public sector. The Plan Focussed on rapid industrialization- heavy & basic industries . Advocated huge imports through foreign loans. The Industrial Policy 1956 was based on establishment of a socialistic pattern of society as the goal of economic policy. Acute shortage of forex led to pruning of development targets , price rise was also seen ( about 30%) vis a vis decline in the earlier Plan & the 2nd FYP was only moderately successful.

Mahalanobis Model: The 2nd year five year plan, functioned on the basis of Mahalanobis model. The Mahalanobis model was propounded by the famous Prasanta Chandra Mahalanobis in the year 1953.

As many as five steel plants including the ones in Durgapur, Jamshedpur as well as Bhilai were set up as per the 2nd five year plan. Hydroelectric power plants were formed during the tenure of the 2nd five year plan. There was considerable increase in production of coal. The North eastern part of the country, witnessed increase in the number of railway tracks.

During the term of the 2nd five year plan, Atomic Energy Commission came into being. The Commission was established in the year 1957. During the same period, Tata Institute of Fundamental Research was born. The institute conducted several programs to search for talented individuals. These individuals would eventually be absorbed into programs related to nuclear power.

Acute shortage of forex led to pruning of development targets , price rise was also seen ( about 30%) vis a vis decline in the earlier Plan & the 2nd FYP was only moderately successful.

3rd five year plan (1961 to 1966): Target Growth: 5.6% Actual Growth: 2.8%

At its conception, it was felt that Indian economy has entered a “takeoff stage”. Therefore, its aim was to make India a ‘self-reliant’ and ‘self-generating’ economy. Based on the experience of first two plans (agricultural production was seen as limiting factor in India’s economic development) Hence agriculture was given top priority to support the exports and industry. However, with the short lived Sino Indian War of 1962 India diverted its attention to the safety of the country. Again, during the period 1965 to 1966, owing to Green Revolution, once again agriculture attracted attention.

Due to the Sino Indian War, India witnessed increase in price of products. The resulting inflation was cost push in nature. Many dams were constructed during this period. It may be recalled, that when the 1st five year plan was tabled, construction of Hirakud dam, Mettur dam and Bhakra dam had taken place. Along with dams, India got many fertilizer plants and cement making plants. Abundant production of wheat took place in Punjab.

Role of the states increased and they were given more prominence. Many primary schools had started functioning in the village areas. Various bodies looking into matters related to secondary education were also formed. To promote democracy, there was commencement of the Panchayat elections.

There was formation of state electricity boards. The state governments were entrusted with the responsibility of constructing roads.

The Plan was thorough failure in reaching the targets due to unforeseen events – Chinese aggression (1962), Indo-Pak war (1965), severe drought 1965-66. Due to conflicts the approach during the later phase was shifted from development to defence & development.

Three Annual Plans (1966- 69): Plan Holiday

Failure of Third Plan that of the devaluation of rupee( to boost exports) along with inflationary recession led to postponement of Fourth FYP. Three Annual Plans were introduced instead. Prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans. During these plans a whole new agricultural strategy was implemented. It involving wide-spread distribution of high-yielding varieties of seeds, extensive use of fertilizers, exploitation of irrigation potential and soil conservation. During the Annual Plans, the economy absorbed the shocks generated during the Third Plan It paved the path for the planned growth ahead.

4th five year plan(1969 to 1974): Target Growth: 5.7% Actual Growth: 3.3%

Refusal of supply of essential equipments and raw materials from the allies during Indo Pak war resulted in twin objectives of “ growth with stability “ and “progressive achievement of self reliance “ for the Fourth Plan. Main emphasis was on growth rate of agriculture to enable other sectors to move forward . First two years of the plan saw record production. The last three years did not measure up due to poor monsoon. Implementation of Family Planning Programmes were amongst major targets of the plan.

Influx of Bangladeshi refugees before and after 1971 Indo-Pak war was an important issue along with price situation deteriorating to crisis proportions and the plan is considered as big failure.

5th five year plan (1974-1979): Target Growth: 4.4% Actual Growth: 4.8%

The world economy was in a troublesome state when the fifth five year plan was chalked out. This had a negative impact on the Indian economy. Prices in the energy and food sector skyrocketed and as a consequence inflation became inevitable. Therefore, the priority in the fifth five year plan was given to the food and energy sectors.

The final Draft of fifth plan was prepared and launched by D.P. Dhar in the backdrop of economic crisis arising out of run-away inflation fuelled by hike in oil prices and failure of the Govt. takeover of the wholesale trade in wheat. It proposed to achieve two main objectives: ‘removal of poverty’ (Garibi Hatao) and ‘attainment of self reliance’ Promotion of high rate of growth, better distribution of income and significant growth in the domestic rate of savings were seen as key instruments

Due to high inflation, cost calculations for the Plan proved to be completely wrong and the original public sector outlay had to be revised upwards. After promulgation of emergency in 1975, the emphasis shifted to the implementation of Prime Ministers 20 Point Programme. FYP was relegated to the background and when Janta Party came to power in 1978, the Plan was terminated.

Rolling Plan (1978 – 80)

There were 2 Sixth Plans. Janta Govt. put forward a plan for 1978- 1983 emphasising on employment, in contrast to Nehru Model which the Govt criticised for concentration of power, widening inequality & for mounting poverty. However, the government lasted for only 2 years. Congress Govt. returned to power in 1980 and launched a different plan aimed at directly attacking on the problem of poverty by creating conditions of an expanding economy.

6th five year plan(1980-1985): Target Growth: 5.2% Actual Growth: 5.7%

6th Five Year Plan is also referred to as the Janata Government Plan and it was revolutionary since it marked a change from the Nehruvian model of Five Year Plans. The sixth five year plan has changed a lot of things in India. On one hand it had improved the tourism industry in India and on the other hand it aimed at development in the Information Technology sector.

Issues within the 6th Five Year Plan

The 6th Five Year Plan started from 1980 and covered a timespan of another five years that is till 1985. During this time the Prime Minister was Rajiv Gandhi and hence industrial development was the emphasis of this plan. His idea about the betterment of the industrial sector was welcomed by some and opposed by lot others specially the communist groups. The Plan focussed on Increase in national income, modernization of technology, ensuring continuous decrease in poverty and unemployment through schemes for transferring skills(TRYSEM) and seets(IRDP) and providing slack season employment (NREP), controlling population explosion etc. Broadly , the sixth Plan could be taken as a success as most of the target were realised even though during the last year (1984-85) many parts of the country faced severe famine conditions and agricultural output was less than the record output of previous year.

Transport and Communication System

The transport and communication system also improved under this Plan. The National Highways were all built during this time. Apart from the construction of new highways, the condition of the roads were meliorated. This helped in the betterment of the traffic system in India. During this time the Indian currency was devalued and this led to a dramatic increase in the number of foreign travelers in India thus helping India to become a tourist destination.

New Introduction on the Economic Front

Economic Liberalization was introduced for the first time in India during this period. Ration shops were closed because government no more produced articles at a subsidized rate. Price control measures were no more useful. As a consequence the prices of various goods increased leading to growth in the standard of living of the residents of India.

Measures against Population Explosion

Family Planning was implemented for the first time in India. Family Planning helped to create awareness among the Indians regarding population. However, this measure to control population was not accepted across India. It was readily accepted by the people residing in the developed areas of the country but the mass of the less developed areas refused to accept the plan and never implemented it.

 

7th five year plan (1985-1989): Target Growth: 5.0% Actual Growth: 6.0%

The 7th Five Year Plan started off on a string ground since the foundation for economic development was laid by the 6th Five Year Plan. The Sixth Five Year Plan had already paved the way for economic development by increasing the production in the agricultural and industrial sector, curbing the rate of inflation and maintaining a balance in the transaction of goods, services and money. Therefore, the 7th Five Year Plan had a strong base on which it could built the superstructure of industrial development for the betterment of India’s economic position. This plan strove to achieve socialism and expand the production of energy. The primary aim of the five year plan was to upgrade the industrial sector and enable India to establish itself as one of the developed countries of the world. This Plan was released under the National Development Council of India.The objective of the 7th Five Year Plan was to generate more scope of employment for the people of India, to produce more in terms of food which would lead to an overall increase in productivity.

The basic issues on which this plan put stress were:

• Introduction and application of modern technology
• Justice meted out to people from various social stratas
• Improving the position of the weak in the Indian society
• Development of agriculture
• Reducing poverty in India
• Assuring the essentials of food, shelter and clothing to the people
• Striving to achieve independence as per the Indian economy is concerned
• Help the small as well as the large farmers to increase their productivity

This time Indian government was adamant to achieve self-sufficiency in the economic and production sector. They endeavoured to develop on the factors that ensure a persistent growth in the economy. The rate of employment was anticipated to rise by 4% every year and the labour force was anticipated to grow by 39 million at the end of fifth year. The plan was very successful as the economy recorded 6% growth rate against the targeted 5% with the decade of 80’s struggling out of the’ Hindu Rate of Growth’.

8th five year plan(1992-1997): Target Growth 5.6 % Actual Growth 6.8%

The eighth plan was postponed by two years because of political uncertainty at the Centre. Worsening Balance of Payment position, rising debt burden, widening budget deficits, recession in industry and inflation were the key issues during the launch of the plan. The plan undertook drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6% through introduction of fiscal & economic reforms including liberalisation under the Prime Minister ship of Shri P V Narasimha Rao. Through this plan the reduction of deficit and foreign debt was aimed at. During this period only India received a coveted opportunity to become a member of the World Trade Organization on January 1st 1995. Some of the main economic outcomes during eighth plan period were rapid economic growth (highest annual growth rate so far – 6.8 %), high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit. High growth rate was achieved even though the share of public sector in total investment had declined considerably to about 34 %.

9th five year plan(1997-2002): Target Growth: 6.5% Actual Growth: 5.4%

Passed after 50 years of Indian independence, the 9th Five Year Plan was formulated to act as a tool for solving the economic and social problems existing in the country. The Plan in fact, was born out of the government’s realization that the latent economic reserves of the country which were still not explored, should be utilized for the overall development and benefit of the Indian economy in the coming five years. The Plan prepared under United Front Government focussed on “Growth With Social Justice & Equality “ Ninth Plan aimed to depend predominantly on the private sector – Indian as well as foreign (FDI) & State was envisaged to increasingly play the role of facilitator & increasingly involve itself with social sector viz education , health etc and infrastructure where private sector participation was likely to be limited. It assigned priority to agriculture & rural development with a view to generate adequate productive employment and eradicate poverty

10th five year plan (2002-2007): Target Growth 8 % Actual Growth 7.6 %

Recognising that economic growth cant be the only objective of national plan, Tenth Plan had set ‘monitorable targets’ for few key indicators (11) of development besides 8 % growth target. The targets included reduction in gender gaps in literacy and wage rate, reduction in Infant & maternal mortality rates, improvement in literacy, access to potable drinking water cleaning of major polluted rivers, etc. Governance was considered as factor of development & agriculture was declared as prime moving force of the economy. States role in planning was to be increased with greater involvement of Panchayati Raj Institutions. State wise break up of targets for growth and social development sought to achieve balanced development of all states.

Chief Objectives of the 10th Five Year Plan:

• The Tenth Five Year Plan proposes schooling to be compulsory for children, by the year 2003.
• The mortality rate of children must be reduced to 45 per 1000 livings births and 28 per 1000 livings births by 2007 and 2012 respectively
• All main rivers should be cleaned up between 2007 and 2012
• Reducing the poverty ratio by at least five percentage points, by 2007
• Making provision for useful and lucrative employments to the population, which are of the best qualities
• According to the Plan, it is mandatory that all infants complete at least five years in schools by 2007.
• By 2007, there should be a decrease in gender discriminations in the spheres of wage rate and literacy, by a minimum of 50%
• Taking up of extensive afforestation measures, by planting more trees and enhance the forest and tree areas to 25% by 2007 and 33% by 2012
• Ensuring persistent availability of pure drinking water in the rural areas of India, even in the remote parts
• The alarming rate at which the Indian population is growing must be checked and fixed to 16.2%, between a time frame of 2001 and 2011
• The rate of literacy must be increased by at least 75%, within the tenure of the Tenth Five Year Plan
• There should be a decrease in the Maternal Mortality Ratio (MMR) to 2 per 1000 live births by 2007. The Plan also intended to bring down the Maternal Mortality
• Ratio to 1 per 1000 live birth by the year 2012.

11th five year plan(2007-2012): Target Growth 9 % Actual Growth 8%

Eleventh Plan was aimed “Towards Faster & More Inclusive Growth “after UPA rode back to power on the plank of helping Aam Aadmi (common man). India had emerged as one of the fastest growing economy by the end of the Tenth Plan. The savings and investment rates had increased , industrial sector had responded well to face competition in the global economy and foreign investors were keen to invest in India. But the growth was not perceived as sufficiently inclusive for many groups , specially SCs , STs & minorities as borne out by data on several dimensions like poverty, malnutrition, mortality, current daily employment etc. The broad vision for 11th Plan included several inter related components like rapid growth reducing poverty & creating employment opportunities , access to essential services in health & education, specially for the poor, extension if employment opportunities using National Rural Employment Guarantee Programme , environmental sustainability , reduction of gender inequality etc. Accordingly various targets were laid down like reduction in unemployment( to less than 5 % among educated youth ) & headcount ratio of poverty ( by 10 %), reduction in drop out rates , gender gap in literacy , infant mortality , total fertility , malnutrition in age group of 0-3 ( to half its present level), improvement in sex ratio, forest & tree cover, air quality in major cities, , ensuring electricity connection to all villages & BPL households (by 2009) & reliable power by end of 11th Plan , all weather road connection to habitations with population 1000& above (500 in hilly areas) by 2009, connecting every village by telephone & providing broad band connectivity to all villages by 2012. The Eleventh Plan started well with the first year achieving a growth rate of 9.3 per cent, however the growth decelerated to 6.7 per cent rate in 2008-09 following the global financial crisis. The economy recovered substantially to register growth rates of 8.6 per cent and 9.3 per cent in 2009-10 and 2010-11 respectively. However, the second bout of global slowdown in 2011 due to the sovereign debt crisis in Europe coupled with domestic factors such as tight monetary policy and supply side bottlenecks, resulted in deceleration of growth to 6.2 per cent in 2011-12. Consequently, the average annual growth rate of Gross Domestic Product (GDP) achieved during the Eleventh Plan was 8 per cent, which was lower than the target but better than the Tenth Plan achievement.

12th five year plan(2012-2017):

The Twelfth Plan commenced at a time when the global economy was going through a second financial crisis, precipitated by the sovereign debt problems of the Eurozone which erupted in the last year of the Eleventh Plan. The crisis affected all countries including India. Our growth slowed down to 6.2 percent in 2011-12 and the deceleration continued into the first year of the Twelfth Plan, when the economy is estimated to have grown by only 5 percent . The Twelfth Plan therefore emphasizes that our first priority must be to bring the economy back to rapid growth while ensuring that the growth is both inclusive and sustainable. The broad vision and aspirations which the Twelfth Plan seeks to fulfil are reflected in the subtitle: ‘Faster, Sustainable, and More Inclusive Growth’. Inclusiveness is to be achieved through poverty reduction, promoting group equality and regional balance, reducing inequality, empowering people etc whereas sustainability includes ensuring environmental sustainability ,development of human capital through improved health, education, skill development, nutrition, information technology etc and development of institutional capabilities , infrastructure like power telecommunication, roads, transport etc.

Monitorable Targets of the Plan :

Twenty Five core indicators listed below reflect the vision of rapid, sustainable & more inclusive growth of the twelfth Plan:

Economic Growth

1. Real GDP Growth Rate of 8.0 per cent.
2. Agriculture Growth Rate of 4.0 per cent.
3. Manufacturing Growth Rate of 10.0 per cent.
4. Every State must have an average growth rate in the Twelfth Plan preferably higher than that achieved in the Eleventh Plan.

Poverty and Employment

5. Head-count ratio of consumption poverty to be reduced by 10 percentage points over the preceding estimates by the end of Twelfth FYP.
6. Generate 50 million new work opportunities in the non-farm sector and provide skill certification to equivalent numbers during the Twelfth FYP.

Education

7. Mean Years of Schooling to increase to seven years by the end of Twelfth FYP.
8. Enhance access to higher education by creating two million additional seats for each age cohort aligned to the skill needs of the economy.
9. Eliminate gender and social gap in school enrolment (that is, between girls and boys, and between SCs, STs, Muslims and the rest of the population) by the end of Twelfth FYP.

Health

10. Reduce IMR to 25 and MMR to 1 per 1,000 live births, and improve Child Sex Ratio (0–6 years) to 950 by the end of the Twelfth FYP.
11. Reduce Total Fertility Rate to 2.1 by the end of Twelfth FYP.
12. Reduce under-nutrition among children aged 0–3 years to half of the NFHS-3 levels by the end of Twelfth FYP.

Infrastructure, Including Rural Infrastructure

13. Increase investment in infrastructure as a percentage of GDP to 9 per cent by the end of Twelfth FYP.
14. Increase the Gross Irrigated Area from 90 million hectare to 103 million hectare by the end of Twelfth FYP.
15. Provide electricity to all villages and reduce AT&C losses to 20 per cent by the end of Twelfth FYP.
16. Connect all villages with all-weather roads by the end of Twelfth FYP.
17. Upgrade national and state highways to the minimum two-lane standard by the end of Twelfth FYP.
18. Complete Eastern and Western Dedicated Freight Corridors by the end of Twelfth FYP.
19. Increase rural tele-density to 70 per cent by the end of Twelfth FYP.
20. Ensure 50 per cent of rural population has access to 40 lpcd piped drinking water supply, and 50 per cent gram panchayats achieve Nirmal Gram Status by the end of Twelfth FYP.

Environment and Sustainability

21. Increase green cover (as measured by satellite imagery) by 1 million hectare every year during the Twelfth FYP.
22. Add 30,000 MW of renewable energy capacity in the Twelfth Plan
23. Reduce emission intensity of GDP in line with the target of 20 per cent to 25 per cent reduction over 2005 levels by 2020.

Service Delivery

24. Provide access to banking services to 90 per cent Indian households by the end of Twelfth FYP.
25. Major subsidies and welfare related beneficiary payments to be shifted to a direct cash transfer by the end of the Twelfth Plan, using the Aadhar platform with linked bank accounts.

For more economic schemes of the government visit: https://pscprep.com/important-government-schemes/

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