Economic planning

economic planningin india

Economic Planning Economic planning is to make decision with

respect to the use of resources. In communist countries the government

makes both micro and macro economic decisions.

Microeconomic decisions include what goods and services to produce, the qualities to produce, the prices to charge, and the wages to pay.

Macroeconomics decisions include the rate of investment and the extent of foreign trade.

Need for Economic Planning

Mess Poverty And Low Per Capital Income.High Rate Of Growth Of Population.Industrial Growth Was Negligible.Low Level Of LiteracyBackward TechnologyTraditional Attitude.Social And Economic Problem Created By

Partition Of Country.

Objective of Economic Planning

Economic growthReduction of economic in equalitiesBalanced regional development ModernizationReduction of unemployment

Planning commission of IndiaPlanning commission of India was setup in

March 1950 by government of India. The task before planning commission of India are:-

Effective utilization of resources.Prepare five year plan along with its

objective.Coordination with state government of India

for execution of planDetermination of priorities, stages of plan

and propose of allocation of resources for due completion of stages.

Five year plansFirst Five-Year Plan (1951-1956)The 1st five year plan was presented by

Jawaharlal Nehru, who was the Prime Minister during that period. It was formulated for the execution of various plans between 1951 to 1956. The Planning Commission was responsible for working out the plan

The primary aim of the 1st five year plan was to improve living standards of the people of India

The target set for the growth in the gross domestic product was 2.1percent every year.

Second Five-Year Plan (1956–1961)The second five-year plan focused on industry,

especially heavy industry. This plan particularly focused in the development of the Public Sector.

Target Growth:4.5% Growth achieved:4.0%

Third Five-Year Plan (1961–1966)The third plan stressed on agriculture and

improvement in the production of wheat, but the brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards the ‘Defense industry or Indian army’.

Target Growth: 5.6% Actual Growth: 2.4%

Fourth Five-Year Plan (1969–1974) Indira Gandhi was the Prime Minister. The

Indira Gandhi government nationalized 14 major Indian banks and the Green Revolution in India advanced agriculture


Fifth Five-Year Plan (1974–1979) The plan focused on

employment, poverty alleviation, justice and self-reliance in agricultural production and defense


Sixth Five-Year Plan (1980–1985)The sixth plan marked the beginning

of economic liberalization. Price controls were eliminated and ration shops were closed.


Seventh Five-Year Plan (1985–1990)The main objectives of the 7th five-year plans

were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment.


Eighth Five-Year Plan (1992–1997)1989–91 was a period of economic instability in

India and hence no five-year plan was implemented. Between 1990 and 1992, there were only Annual Plans.

the country took the risk of reforming the socialist economy and launched India's free market reforms.


Ninth Five-Year Plan (1997–2002) Main objective was to prioritize agricultural sector

and emphasize on the rural development, to generate adequate employment opportunities and promote poverty reduction, to stabilize the prices.


Tenth Five-Year Plan (2002–2007)Reduction of poverty rate by 5 percentage

points by 2007.Providing gainful and high-quality

employment at least to the addition to the labor force.

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

Target growth:8.1% Growth achieved:7.7%

Eleventh Five-Year Plan (2007–2012)

INCOME AND POVERTYAccelerate growth rate of GDP 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.

Reduce educated unemployment to below 5%.

Raise real wage rate of unskilled workers by 20%

EDUCATIONReduce dropout rates of children from

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

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

Lower gender gap in literacy to 10% points.Increase the percentage of each cohort going

to higher education from the present 10% to 15% by the end of the 11th plan.

HealthProvide clean drinking water for all by 2009

and ensure that there are no slip-backs by the end of the 11th plan.

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

Reduce anemia among women and girls by 50% by the end of the 11th Plan.

Women and ChildrenEnsure that at least 33% 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.

InfrastructureEnsure electricity connection to all villages

and BPL households by 2009 and round-the-clock power by the end of the plan.

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

Environment Increase forest and tree cover by 5% points.Attain WHO standards of air quality in all

major cities by 2011-12Treat all urban waste water by 2011-12 to

clean river waters.Increase energy efficiency by 20% points by

2016-17.

ConclusionEconomic planning help in mobilizing and

allocating the resources in desired manner.Objective of economic planning is to reduce

inequality, economic growth, balanced regional growth, modernization.

Each five year plan aims to achieving certain target. Five year plan constitute the steps toward the fulfillment of objectives of economic planning.

the 12th Plan has taken off, it is yet to be formally approved with the aim of the growth rate at 8%.

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Economic planning