Economic Planning Final

8/8/2019 Economic Planning Final

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PLANNING IN INDIA BY:

Asif HAsan


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Planning Process in India:

The planning process in India has both ahierarchic and interactive character since weoperate within the framework of a federal

democratic political structure. The plan, as it isformulated, has three distinctive components: Along term perspective plan A Perspective Plan:The main purpose is to indicateT five year plan

Annual plan the desired directions of economicactivities to serve as pointers in formulating theoperational targets that go into five year plans.


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The perspective plan formulated along

two principal lines: (a) the part that deals with the overall strategy; also

indicates the magnitude and type of resourcemobilization that will be called for as well as with the

question of external financing that may be necessary. (b) The other and more detailed part dealing with

projected developments in a number of key sectors ofthe economy which have significant backward andforward linkages. Once, key sectors are laid, the

perspective plan also tries to indicate a certain timephasing of activities that will be called for if theseobjectives are to be realized.


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Economic PlanningEconomic Planning is to make decision with respect to the

use of resources.

In communist countries the government makes both micro-

and macroeconomic decisions.

Microeconomic decisions include what goods and services

to produce, the quantities to produce, the prices to charge,

and the wages to pay.

Macroeconomic decisions include the rate of investment

and the extent of foreign trade.

Economic planning in India was stared in 1950 is necessaryfor economic development and economic growth.


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Mess Poverty And Low Per Capita Income

High Rate of Growth of Population.

Industrial Growth Was Negligible.

Low Level of Literacy.

Backward Technology.

Traditional Attitude.

Social And Economic Problem Created ByPartition Of Country.

Need For Economic Planning


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Economic Growth.

Reduction OfEconomic In

Equalities.

Balanced Regional Development.

Modernization.

Reduction Of Unemployment.

Objective ofEconomic Planning


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Planning commission of India was setup in March1950 by government of India. The task beforeplanning commission of India are:-

Effective Utilization of Resources.Prepare Five Year Plan Along With its Objective.

Co-ordination with State Government of India ForExecution of Plan.

Determination Of Priorities, Stages Of Plan andPropose of Allocation Of Resources For DueCompletion Of Stages.

Planning commission of India


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Chairman- Dr. Manmohan Singh

Prime Minister

Deputy Chairman- Shri Montek singh

Ahluwalia

Member Secretary- Shri Rajeev Ratna

Shah

Planning commission of in India

members are


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Income & Poverty

Accelerate 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 percent.

11th Five Year Plan Target


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Reduce dropout rates of children from elementaryschool 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 percentage points.

Increase the percentage of each cohort going tohigher education from the present 10% to 15% by

the end of the 11th Plan.

Education


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Provide 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.

Health


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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

Women and Children


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Ensure electricity connection to all villages and BPLhouseholds by 2009 and round-the-clock power by the end

of the Plan.

Ensure all-weather road connection to all habitation withpopulation 1000 and above (500 in hilly and tribal areas)by 2009, and ensure coverage of all significant habitationby 2015.

Connect every village by telephone by November 2007 andprovide broadband connectivity to all villages by 2012.

Provide homestead sites to all by 2012 and step up thepace of house construction for rural poor to cover all thepoor by 2016-17.

Infrastructure


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Increase forest and tree cover by 5 percentagepoints.

Attain WHO standards of air quality in allmajor cities by 2011-12.

Treat all urban waste water by 2011-12 toclean river waters.

Increase energy efficiency by 20 percentagepoints by 2016-17

Environment


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Conclusion

Economic Planning help in mobilizing andallocating the resources in desired manner.

Objective of economic planning is to reduceinequality, economic growth, balanced regionalgrowth, modernization.

Each five year plan aims at achieving certaintarget. Five year plan constitute the steps towardthe fulfillment of objectives of economic

planning.


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Five year plan:

That is the plan document constructed on the basis ofrecommendations made by a large number of workinggroups which deal with the major sector of economicactivities. Lays down broad strategies, objectives,

growth rate, sectoral targets, etc. Because of ourfederal nature, every five year plan has : A centralcomponent A state component (social services,agriculture, irrigation, infrastructural activities such asAnnual Plan: That isTpower, roads etc. figure

prominently in state component). the importantoperational instrument of the five year plans. Itprovides an occasion for stocktaking and assessingprogress of the plan from year to year.


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Indias leaders adopted the principles of formaleconomic planning after independence as aneffective way to intervene in the economy tofoster growth and social justice. The planningcommission was established in 1950. Responsibleonly to the Prime minister, the commission isindependent of the cabinet. A staff draftsnational plans under the guidance of the

commission; draft plans are presented forapproval to the National Development Council,which consist of the planning commission and thechief ministers of the states.


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The council can make changes to the draft

plan. After the council's approval, the draft is

presented to the cabinet and subsequently to

parliament, whose approval makes the plan

an operating document for central and state

government.


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ORGANIZATION OF THE PLANNING

COMMISSION

The Prime Minister is the chairman of the

Planning Commission, which works under the

overall guidance of the NDC. The deputy

chairman and the full time members of the

commission, as a composite body, provide

advice and guidance to the subject divisions

for the formulation of five year plans, annualplans, state plans, monitoring plan progress.


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ORGANIZATION OF THE PLANNING

COMMISSION

The planning commission functions through

several divisions, each headed by a senior

officer (as): Chairman Dy. Chairman Minister

of state Members Member secretary Senior

officials Grievance officers


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FUNCTIONS OF PLANNING

COMMISSION :

THE 1950 RESOLUTION SETTING UP THE PlanningCommission outlined its functions as under: Make anassessment of the material, capital and humanresources of the country, including technical personnel.

Formulate a plan for the most effective and balancedutilisation of the countrys resources. On adetermination of priorities, define the stages in whichthe plan should be carried out and propose theallocation of resources for the due completion of each

stage. Determine the nature of the machinery whichwill be necessary for securing the successfulimpementation of each stage of the plan.


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A Review of Indian Plans :

First Five Year Plan (1951-55): Indias first five

year plan was a moderate document It said

that detailed planning to be attempted only

for a few selected industries which India

lacked. A Review of Indian Plans


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Objectives

To correct the disequilibrium in the Indianeconomy caused by the second world war andthe partition of the country. To achieve self

sufficiency in foodgrains production and toimprove availability of To attempt to provide forTo control inflationary tendencies raw materialsan all round balanced development which would

ensure a rising, national income and a steadyimprovement in living standards over a period offive years. Objectives:


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Second Plan: (1956-60) Objectives: To secure anincrease in national income by about 25 percentover five years. To initiate rapid industrialization

with special emphasis on basic and heavyindustries. To generate more employmentopportunities To reduce the growing inequalitiesin the distribution of income and wealth. To

increase the rate of investment from 7 percent ofNational income to 11 percent of Nationalincome by 1960-61.


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to secure aThird Plan (1961-65) Objectives: toachieve self growth in National Income of over 5percent per annum sufficiency in foodgrains andto increase agricultural production to meet theto expand basicrequirements for industrialdevelopment and export promotion industrieslike steel, chemicals, fuel, and power andmachine building capacity toso that future

industrial requirements can be satisfieddomestically. utilize manpower efficiently bygenerating more employment opportunities.


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Plan Holiday : 1966-69 1966 and 1968

: Famine years :

Economic difficulties disrupted the planning process in the mid1960s. In the 1960s, India faced two wars one with china in 1962and then with pakistan in 1965. This come as a huge set back to theeconomy as defence expenditure increased sharply and there wasnegative impact on industrial and agriculture growth. Three annual

plans guided development between FY 1966 and FY 1968 while planpolicies and strategies were reevaluated. Plan Holiday : 1966-691966 and 1968 : Famine years

to attain aFourth Plan (1969-73) Objectives: to bring abouteconomic5.5 percent growth in national income per annum toachieve social justice and equality to achieve self reliance

stability toto utilize Panchayati Raj institutions in local andregional planning. recognize the management of public enterprises.


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to Fifth Five Year Plan (1974-78) Objectives: to achievean adequate expansion of remove poverty and achieve selfreliance to achieve developmentemploymentopportunities particularly in rural areas. without

stimulating further inflationary pressures by introducingfiscal and monetary measures.

Sixth Plan (1980-84) Objectives to remove widespreadpoverty particularly in rural areas to have an appreciablestep up in the rate of growth of the economy to strengthenthe impulses of modernization for economic and

technological self reliance to provide basic needs of thepeople (drinking water, elementary education, health, etc.)to reduce inequalities of income and wealth throughredistribution in favour of the poor


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to achieveSeventh Plan (1985-89) Objectivesgrowth, equity, social justice, self reliance andimproved efficiency and to increase employment toaccelerate production of foodgrains productivity

toto lessen agricultural constraints on industrialdevelopment opportunities initiate rapid expansionof scientific and technological capabilities.

Eighth Plan (1992-96)The eighth plan is a plan formanaging the change, for managing the transition from

a centrally planned economy to a market led economy,without fearing our socio-cultural fabric.


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The Ninth Plan prepared under the United Front Government wasreleased in March 1998. The same was modified and approved bythe National Development Coun-cil in February 1999, nearly twoyears after its implementa-tion from April 1, 1997. 1. OBJECTIVE OFTHE NINTH PLAN The Ninth Plan was developed in the context of

four important dimensions of state policy, viz. Quality of life,generation of productive employment, regional balance and self-reliance The Ninth Plan focused on accelerated growth, recognisinga special role for agriculture for its stronger poverty reducing andemployment generating effects, which will be carried out over a 15year period. The focus of the Ninth Plan was on: "Growth with

Social Justice andE

quality'. The objectives of the Ninth Plan asapproved by the National Development Council are as follows:


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Tenth Five Year Plan (2002-2006) :

OBJECTIVES, TARGETS AND STRATEGY Background of Developmentsin 1990's The Tenth Plan (2002-07) was prepared against a backdropof high expectations arising from some aspects of the recentperformance. GDP growth in the post-reforms period improved toan average of about 6.1 per cent in the Eighth and Ninth Plans from

an average of about 5.7 percent in the 1980s, making India one ofthe ten fastest growing developing countries. Encouraging progresswas also made The percentage of population in poverty continuedto decline, even if not as much as was targeted. Population growthdecelerated below 2 per cent for the first time in four decades.Literacy increased from 52 per cent in 1991 to 65 per cent in 2001

and the improvement was evident in all States. Sectors such assoftware services and IT enabled services have emerged as newsources of strength creating confidence about India's potential tobe competitive in the economy Tenth Five Year Plan (2002-2006)

Documents

Economic Planning Final