INDIA’S FIVE YEAR PLANS

Introduction –Why it was needed ?

When India gained independence, its economy was groveling in dust.

The British had left the Indian economy crippled and the fathers of development formulated 5years plan to develop the Indian economy

Who Monitors It ?

The five years plan in India is framed, executed and monitored by the Planning Commission of India.

The Planning Commission was set up in March, 1950.

The draft of the first five-year plan was published in July 1951 and it was approved in December 1951.

With the Prime Minister as the ex officio Chairman.

The commission has a nominated Deputy Chairman, who has rank of a Cabinet minister.

First Five Year Plan (1951-1956)

The first Prime Minister, Jawaharlal Nehru presented the first plan to the Parliament of India on December 8, 1951.

Objectives The primary aim was to improve living standards

of the people of India. This was done by making use of India's natural

resources. The total outlay was worth Rs.2,069 crore. The target set for the growth in the GDP was

2.1percent every year.

In reality, GDP of 3.6 percent per annum was achieved .

The following Irrigation projects were started during that period:

Mettur Dam ,Hirakud Dam and Bhakra Dam. Rehabilitation of landless workers, whose main

occupation was agriculture. Soil conservation, was given importance. Effort in improving posts and telegraphs, railway

services, road tracks, civil aviation were taken. Sufficient fund were allocated for the industrial

sector. Measures were taken for the growth of the small scale industries.

What Was Achieved ?

The 2nd year plan, functioned on the basis of Mahalanobis model it was propounded by the famous statistician Prasanta Chandra Mahalanobis in the year 1953. His model addresses different issues pertaining to economic development.

The plan attempted to determine the optimal allocation of investment between productive sectors in order to maximize long-run economic growth .

Assumptions made by the Mahalanobis model: According to this model, it is assumed that the economy is

closed and has two segments.

1. Segment of consumption goods2. Segment of capital goods.

Second Five Year Plan(1956-1961)

Second Five Year Plan(1956-1961)

Objective The second five-year plan focused on industry,

especially heavy industry. The Indian government boosted manufacturing of

industrial goods in the country. This was done primarily to develop the public

sector.

Five steel mills at Bhilai , Durgapur, Rourkela and Jamshedpur were set up .

Hydroelectric power plants were formed .

Coal production was increased.

Railway lines were added in the north east.

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

Tata Institute of Fundamental Research was born.

What Was Achieved ?

Third Five Year plan(1961-1966)

Objective The third plan stressed on agriculture and improving

production of rice, but the brief Sino-Indian War in 1962 exposed weaknesses in the economy and shifted the focus towards defence.

The war led to inflation and the priority was shifted to price stabilization.

Increasing the national income by 5 percent per annum.

Minimizing rate of unemployment. Ensuring that people enjoy equal rights in the

country.

The construction of dams continued. Many cement and fertilizer plants were also built. Punjab begun producing an abundance of wheat. Many primary schools were started in rural areas. Panchayat elections were started and the states

were given more development responsibilities. State electricity boards and state secondary

education boards were formed.

What Was Achieved ?

Fourth Five Year plan(1969-1974)

Indira Gandhi was the Prime Minister. Objective India had to reform and restructure its expenditure

agenda, following the attack on India in the year 1962 and for the second time in the year 1965.

Due to recession, famine and drought, India did not pay much heed to long term goals.

The need for foreign reserves was felt.

The Indira Gandhi government nationalized 14 major Indian banks .

Funds earmarked for the industrial development had to be used for the war effort.

Green Revolution in India advanced agriculture. Food grains production increased to bring about

self sufficiency in production.

What Was Achieved ?

Fifth Five Year plan(1974-1979)

Objective The world economy was in a troublesome state

which had a negative impact on the Indian economy.

Therefore, priority was given to the food and energy sectors.

Improving the scope of self-employment through a well integrated program.

Reduce poverty Improving the agricultural condition by

implementing land reform measures.

Electricity Supply Act was enacted in 1975, which enabled the Central Government to enter into power generation and transmission.

Importance of a labor intensive production technology in India.

Increase in the supply of food grains and the export of minerals and oil reserve earned a good amount of foreign exchange to the Indian Economy.

Enhancing the import substitution in the spheres including chemicals, paper, mineral and equipment industries.

What Was Achieved ?

Sixth Five Year plan (1980-1985)

Objective 6th Five Year Plan is also referred to as the Janata

Government Plan which marked a reversal of the Nehruvian model.

Rajiv Gandhi was elected as the prime minister, He aimed for rapid industrial development, especially in the area of information technology.

Progress was slow, however, partly because of caution on the part of labour and communist leaders.

The Indian national highway system was introduced for the first time and many roads were widened to accommodate the increasing traffic.

Tourism also expanded. The sixth plan also marked the beginning of

economic liberalization. Family Planning was implemented for the first time

in India . Price controls were eliminated and ration shops

were closed. This led to an increase in food prices and an increased cost of living.

What Was Achieved ?

Seventh Five Year plan(1985-1989)

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

Social Justice Introduction and application of modern technology Agricultural development Anti-poverty programs Assuring the essentials of food, shelter and clothing

to the people Increasing productivity of small and large scale

farmers Making India an Independent Economy

India strove to bring about a self-sustained economy in the country with valuable contributions from voluntary agencies and the general populace.

Care was taken to establish a harmony in all the sectors that are contained in an economy.

Spread education among girls, enhance telecommunication within the country.

The government of India also strove to maintain a balance in the economy and by striking a balance within export and import.

What Was Achieved ?

In 1991, India faced a crisis in Foreign Exchange (Forex) reserves.

P.V. Narasimha Rao was the twelfth Prime Minister, and led the most important administrations in India's modern history overseeing a major economic transformation and several incidents affecting national security.

Dr. Manmohan Singh launched India's free market reforms that brought the nearly bankrupt nation back from the edge.

It was the beginning of privatisation and liberalisation in India.

Period between 1989-91

This plan can be termed as Rao and Manmohan model of

Economic development.

Objective

Modernization of industries was a major highlight of the

Eighth Plan

Containing population growth, poverty reduction.

Employment generation, strengthening the

infrastructure, Institutional building.

Human Resource development

Eight Five Year plan(1992-1997)

Production of food increased to 176.22 million from

51 million which was a huge in comparison to the

previous years.

Energy was given priority with 26.6% of the outlay.

India became a member of the World Trade

Organization on 1 January 1995

An average annual growth rate of 6.7% against the

target 5.6% was achieved.

What Was Achieved ?

Ninth Five Year Plan (1997 - 2002)

Objective To prioritize agricultural sector and on the rural development To generate employment opportunities and promote poverty

reduction To stabilize the prices in order to accelerate the growth rate

of the economy To ensure food and nutritional security To provide for the basic facilities like education for all, safe

drinking water, primary health care, transport, energy To check the growing population To encourage social issues like women empowerment,

conservation of certain benefits for the Special Groups of the society

To create a liberal market for increase in private investments

It was tool for solving the economic and social

problems existing in the country.

The growth rate was 5.35 per cent, A percentage

point lower than the target GDP growth of 6.5 per

cent

What Was Achieved ?

Objective Reduction in Poverty ratio by 5 % points by 2007; Gender gaps in literacy and wage rates by at least 50% by

2007; Decadal rate of population growth between 2001 and 2011 to

16.2%; Infant mortality rate (IMR) to 45 per 1000 live births by 2007

and to 28 by 2012; Maternal Mortality Ratio (MMR) to 2 per 1000 live births by

2007 and to 1 by 2012; Increase in Literacy Rates to 75 per cent Forest and tree cover to 25% by 2007 and 33% by 2012;

Tenth Five Year Plan(2002-2007)

All villages to have sustained access to potable drinking water

Cleaning of all major polluted rivers by 2007 Economic Growth further accelerated during this

period and crosses over 8% by 2006 Providing gainful and high-quality employment at

least to the addition to the labour force; All children in India in school by 2003; and to

complete 5 years of schooling by 2007;

Tenth Five Year Plan(2002-2007)

 Eleventh Five Year Plan (2007-2012)

Objective Objective to increase GDP growth to 10%. Increase agricultural GDP growth to 4% per year to

ensure a wider spread of benefits. Create 70 million new work opportunities. Augment minimum standards of education in primary

school. Reduce infant mortality rate to 28 and malnutrition

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

Ensure electricity connection to all villages and increase forest and tree cover by five percentage points.

INDIA’S GROWTH PERFORMANCE DURING THE PLANS

012345678

2.1

4.5

5.6 5.7

4.45.2 5

5.66.5

8

3.64.21

2.722.05

4.835.846.02

6.68

5.5

7.2

TargetActual

Trends in Per capita NNP at factor cost

Average (1951 to 2000) :- 2.2

Firs

t Pla

n (1

951-

1956

)

Third

Pla

n (1

961-

66)

Fifth

Pla

n (1

974-

79)

Seve

nth

Plan

(198

5-90

)

Ninth

Pla

n (1

997-

02)

0

2

4

6

2.61.7

0.40.8

2.63.13.3

4.53.3

6.1

NNP at factor Cost

NNP at factor Cost

Conclusions

Lack of consistency.

Monsoon-a dominant factor.

Modest growth rate.

Foreign capital.

Less impressive.

Objectives remain unfulfilled.

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