FIVE YEAR PLAN IN INDIA AND

ITS APPROACHES

SUBMITTED BY :NILOFAR SAIFI2ND SEMDYNAMICS OF DEVELOPMENTM.EKISTICS

FACULTY OF ARCHITECTURE & EKISTICS, JAMIA MILLIA ISLAMIA

CONTENT

1. INTRODUCTION2. PLANNING COMMISSION OF INDIA3. ABOUT THE PREVIOUS MASTER PLANS4. 12th Five Year Plan5. STRATEGIC CHALLENGES6. 12th Five Year Plan SECTORS7. NITI AAYOG8. NITI AAYOG WILL COMPRISE9. KEY HIGHLIGHTS OF NITI AAYOG 10. MERITS OF NITI AAYOG11. DEMERITS OF NITI AAYOG12. CONCLUSION

INTRODUCTION It should have some general goals as well as specific objectives which are to be

achieved within specific period of time. A plan spells out how the resources of a nation should be put to use. In India, plans are of five year duration and are called FIVE YEAR PLAN.

WHAT IS PLAN?

PLANNING COMMISSION OF INDIA It was Set up on 15 Mar, 1950 with prime minister Jawaharlal Nehru as the chairman. The economy of India is based on planning through its five-year plans, developed,

executed and monitored by the Planning Commission ORGANIZATIONAL SET UP

Chairman ( Prime Minister) Deputy Chairman Secretary Joint Secretary Four Members

Some of the problems necessitated need for an immediate plan: Vicious circle of poverty , Low Per Capita Income High Rate of Growth of Population., Low Level of Literacy. Backward Technology, Foreign Trade. Need for Rapid industrialization

WHY TO PLAN ?

WHAT IS PLAN AND NON-PLAN EXPENDITURE?

PLAN EXPENDITURE: ANY EXPENDITURE THAT IS INCURRED OR EARNED ON PROGRAMMERS WHICH ARE DETAILED UNDER THE CURRENT (FIVE YEAR) PLAN IS CALLED PLAN EXPENDITURE. Items of plan expenditure are:

(i) expenditure on electricity generation(ii) irrigation and rural developments(iii) construction of roads, bridges, canals and(iv) science, technology, environment, etc. NON-PLAN EXPENDITURE:

THIS REFERS TO THE ESTIMATED EXPENDITURE PROVIDED IN THE BUDGET FOR SPENDING DURING THE YEAR ON ROUTINE FUNCTIONING OF THE GOVERNMENT.

For this, the government has to spend on police, Judiciary, military, etc. Similarly, the government has to incur expenditure on normal running of government departments and on providing economic and social services

Industrial sector (8.4 percent) National income increased more than the per capita income due to rapid population growth.

ABOUT THE PREVIOUS MASTER PLANS(AS PER OUR PREVIOUS TOPICS)

SECOND PLAN (1956-1961) The second five-year plan focused on industry, especially heavy industry. Domestic production of industrial products was encouraged, particularly in the development of the

public sector. Coal production was increased. THIRD 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.

Many cement and fertilizer plants were also built.

Reducing rate of Unemployment both in Urban & Rural sectors Encourage Self-employment Encourage growth of Small scale industries

FIFTH FIVE YEAR PLAN (1974 TO 1979)

FIRST PLAN (1951-1956)

THREE ANNUAL PLANS (1966-69) 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.

ROLLING PLAN (1978–1980)

THE JANATA PARTY GOVERNMENT REJECTED THE FIFTH FIVE-YEAR PLAN (1974-1979) AND INTRODUCED A NEW SIXTH FIVE-YEAR PLAN (1978–1980). THIS PLAN WAS AGAIN REJECTED BY THE INDIAN NATIONAL CONGRESS GOVERNMENT IN 1980.

DEFINITION-A plan which runs for a period of time and is updated regularly for the same period. I.e. every year the performance of the plan will be assessed and a new plan will be made next year based upon this assessment.

IN THE ROLLING PLANS THERE ARE THREE KIND OF PLANS. First is the plan for the current year which comprises the annual budget. Second is a plan for a fixed number of years, which may be 3, 4 or 5 years. Third is a perspective plan which is for 10, 15 or 20 years.

CONTED………..

SIXTH PLAN (1980-1985) Increase national income Aimed for rapid Industrial Development

SEVENTH PLAN (1985-1989) The plan lay stress on improving the productivity level of industries by up gradation of technology. To generate more scope of employment The Plan expected a growth in labor force of 39 million people and employment was expected to grow at

the rate of 4 percent per year.

EIGHTH PLAN (1992-1997) Modernization of Industrial Sector employment generation

NINTH PLAN (1997 - 2002) Ninth Five Year Plan of India runs had the main aim of attaining objectives like speedy industrialization,

human development, full-scale employment, poverty reduction, and self-reliance on domestic resources.

TENTH FIVE YEAR PLAN (2002 - 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.

ELEVENTH FIVE YEAR PLAN (2007 - 2012) Create 70 million new work opportunities and reduce educated unemployment to below 5%. Raise real wage rate of unskilled workers by 20 percent.

PREVIOUS FIVE YEAR PLANS

Sixth plan 1980-85 5.2 5.54Seventh plan 1985-90 5.0 6.02Eight plan 1992-97 5.6 6.68

Ninth Plan 1997-02 6.5 5.55Tenth plan 2002-07 8.0 7.8Eleventh plan 2007-12 9.0 7.9Twelfth plan 2012-17 9.0 -

Five year plan Period Target growth rate of GDP (%)

Achievement (%)

First plan 1951-56 2.1 3.6Second plan 1956-61 4.5 4.21Third plan 1961-66 5.6 2.72Fourth plan 1969-74 5.7 2.05Fifth plan 1974-79 4.4 4.83

12th Five Year Plan(2012-2017)

THE GOVERNMENT ON 4TH OCTOBER APPROVED THE 12TH FIVE YEAR PLAN (2012-17) THAT SET AVERAGE GROWTH TARGET AT 8.2 PERCENT.

BASIC OBJECTIVE : Faster, More Inclusive, and Sustainable Growth. Faster creation of jobs, especially in manufacturing. Special plans for disadvantaged/backward regions. Growth rate at 8%. Reduce Poverty by 10% (29.8 % in year 2009-10). Improving the facilities of education, Infrastructure and

health. The plan aims towards achieving a growth of 4 percent in

agriculture. Aimed to attract private investments of up to US$1 trillion

in the infrastructural growth. 50m employment opportunities.

12th Five Year Plan :

Sectors

ECONOMIC GROWTH In 12th five year plan, 9% GDP growth is expected. Higher investment and fund

mobilization will induce market development and employment. Well regulated and integrated markets would generate enough jobs and live hood

opportunities. Development through efficient capital markets and public private partnership will further boost the economy and thus may sustain the growth rate of 9 %.

INDUSTRYNeed to grow at 11-12% per year to create 2 million additional jobs per

year.Growth in 11th Plan is in 8%. Tune-up FDI and trade policies to attract quality investment in critical areas.Better consultation and co-ordination in industrial policy making.AGRICULTUE Target at least 4% growth for agriculture. Cereals are on target for 1.5 to 2% growth. Land and water are the critical constraints. Technology must focus on land

productivity and water use efficiency.

GROWTH RATE TARGETS

ENVIRONMENT :

Expenditure on health by Centre and States to increase from 1.3% of GDP to at least 2.0%, and perhaps 2.5% of GDP by end of 12th Plan .

Environmental degradation and ecological imbalance are the two aspects which result out of development initiatives at local and global levels. Growth of economy without compromising on environment is a key issue to be addressed as, sustainable growth is essential now.

EDUCATION AND SKILL DEVELOPMENT :

Must aim at raising the Gross Enrolment Ratio (GER) in Higher Education to 20 percent by 2017 and 25 percent by 2022.

Must aim at significant reduction in social, gender and regional gaps in education. Research and innovation in higher education must be encouraged with cross-

linkages between institutions and industry. HEALTH:

Improve bus services/public transport in smaller cities, towns and districts.

Even after 65 years of Independence, we have 45% of households do not have electricity connections.

The share of private investment in total investment in infrastructure rose from 22% in Tenth Plan to 36.6% in 11th Plan. it will have to increase to 48% in 12th plan to meet infrastructure investment target.

More than 40% of household avail no banking facility at all in country. insurance premia account for less than 1% of GDP, which is just one third of international average.

Just two cities, Delhi and Mumbai, which generate 17% of country’s urban sewage have about 40% of total installed capacity.

ANALYSIS ON INFRASTRUCTURE

NITI AAYOG “NITI” MEANING "POLICY" IN HINDI. "AAYOG” IS THE HINDI WORD FOR "COMMISSION". NATIONAL INSTITUTION FOR TRANSFORMING INDIA AAYOG (niti aayog,

Policy Commission) is a Government of India policy think-tank established by Prime Minister Narendra Modii after his having dissolved the Planning Commission. The Union Government of India announced formation of NITI Aayog on 1 January 2015.

NITI will include leaders of India's 29 states and seven union territories.

WHY DID GOVT. INTRODUCED NITI AAYOG ,WHERE WE ALREADY HAVE PLANNING COMMISSION OF INDIA? The stated aim for NITI Aayog's creation is to foster involvement and participation in

the economic policy-making process by the State Governments of India. It has adopted a "bottom-up" approach in planning which is a remarkable contrast to the Planning Commission's tradition of "top-down" decision-making.

One of the important mandates of NITI Aayog is to bring cooperative competitive federalism and to improve centre state relation .

NITI Aayog will provide opportunities, that the previous Planning Commission structure lacked, to represent the economic interests of the State Governments and Union Territories of India.

POSITION PLANNING COMMISSION NITI AAYOG

INTRODUCED •1950, March 15th •died in 2014, August after Modi became PM.

2015, January 1st

CHAIRMAN Prime minister sameVICE CHAIRMA Last Dy.Chairman was Montek Singh Ahluwalia

(Cabinet minister rank).Free market economist Arvind Panagriya. He was the Chief economist of Asian Development bank, and the the brain behind Rajasthan’s land-labour reform

CEO •Member-Secretary (IAS) •Sindhushree Khullar (IAS) •A secretary level bureaucrat with fixed tenure. •Same Ms. Sindhushree Khullar is the first CEO.

EX-OFFICIO MEMBERS

•Finance Minister •Planning minister

PM can nominate four-Union ministers. Modi has nominated following:1.Home 2.Finance 3.Railway 4.Agriculture

FULL TIME MEMBERS

4-7 full time members, who enjoy “Minister of State” rank.

•Bibek Debroy (Free market economist) •Dr. V.K. Saraswat (technocrat, missile scientist and Ex-DRDO chief.)

SPECIAL INVITEES Union ministers for1.Transport 2.HRD 3.Social Justice +PM can invite other experts as and when needed.

PART-TIME MEMBERS

Tech experts from research institutes. Currently none declared. Rotational posts.

GOVERNING COUNCIL

REGIONAL COUNCILS

•Chairman: Prime minister •Chief ministers of all states •Lieutenant governors of all Union territories.

Will have CMs of states that fall in the region. They’ll be dealing with specific issue concerning a group of states for example irrigation, naxal-problem, infrastructure etc.

ORGANIZATIONAL SET UP: Planning Commission vs Niti aayog

FUNCTIONAL COMPARISON: Planning Commission vs Niti aayog

MERITS OF NITI AAYOG MERITS OF NITI AAYOG Improving relationship between state and center

government Planning commission used to monitor of human

development in the States, Sub-plans for women, SC and ST. Niti Aayog doesn’t say how they’ll do it.

Paying special attention to the backward areas and villages.

It has been suggested that allocation of Plan resources could be tasked to the Finance Commission, which is required to make recommendations regarding the sharing of Union taxes, principles governing grants-in-aid to states and transfer of resources to local bodies, and any other issue that has a bearing on Centre-state financial relations.

This will be great help for involving PPP (public private partnership) projects in infrastructure which are lacking behind.

Niti Aayog should have been created through a legal/Constitutional amendment. There should be a perspective plan spanning for 15 to 20 years.

Its focus on infrastructure development with ministries and implementation delays.

Niti Aayog will conflict with Cabinet Secretariat (for inter-ministerial coordination) and constitutional body Inter State Council (for coordination with states).

Though it found resources to speed up social sector development (education) and for social security by expanding centrally-sponsored schemes, the next round of results are less likely to come from more of the same approach.

At present we’ve 60+ centrally sponsored schemes. Modi aims to combine them into just 10 schemes. Thus, poor and marginalized communities will suffer.

CONCLUSION The economy will enter the 12th plan period in an environment of great

promise but also one that presents major challenges. India has done well on the growth front, but not so well on inclusion. Much of what needs to be done to accelerate GDP growth to 9% so will be done by the private sector, but the central and state governments have a crucial role to play in providing a policy environment that is seen as investor friendly and is supportive of inclusive growth

. Finally, the efficiency in implementation of projects on the ground needs to be greatly improved.

The NITI Aayog took place of planning commission on the principals of cooperative federalism, giving states a more free hand in planning and implementation of schemes, but the contribution and role of five year plan in development of India as a nation and as an economy will always be revered.