Economic Planning in India An analysis

Economic Planning in India-An analysis

Project submitted to
Miss Eritriya Roy
(Faculty: Economics)

Project Submitted by
Vinay Kumar Sahu
(Sociology,Major)
Semester Three
Roll No - 169

HIDAYATULLAH NATIONAL LAW UNIVERSITY

RAIPUR, C.G.

Economic Planning in India An analysis

ACKNOWLEDGEMENTS
I am highly elated to carry out my research on this topic, Economic Planning in India An
analysis. I would like to give my deepest regard to my course teacher Ms. Eritriya Roy,
who held me with his immense advice, direction and valuable assistance, which enabled me
to march ahead with this topic. I thank my parents, who gave me moral and mental support. I
would like to thank my friends, who gave me their precious time for guidance and helped me
a lot in completing my project by giving their helpful suggestion and assistance. I would like
thanks to my seniors for their valuable support. I would also like to thank the library staff
and computer lab staff of my university for their valuable support and kind cooperation.

VINAY KUMAR SAHU

ROLL NO.-169
SEMESTER-3

Economic Planning in India An analysis

Table of Contents
Research methodology ....................................................................................................04
Objectives .........................................................................................................................04
Introduction .....................................................................................................................05

History ...................................................................................................................05
Planning Commission of India.............................................................................06
National Development Council of India .............................................................06
State Planning Board ...........................................................................................07
Objectives of Planning .........................................................................................07
First five year plan(1951-1956) ............................................................................07
Second five year plan(1956-1961) ........................................................................08
Third five year plan(1961-1966) ..........................................................................10
Three annual plans(1966-1969) ...........................................................................10
Fourth five year plan(1969-1974) .......................................................................11
Fifth five year plan(1974-1979) ...........................................................................11
Rolling plan(1978-1980) .......................................................................................12
Sixth five year plan(1980-1985) ...........................................................................12
Seventh five year plan(1985-1990) ......................................................................14
Eighth five year plan(1992-1997) ........................................................................16
Ninth five year plan(1997-2002) ..........................................................................17
Tenth five year plan(2002-2007) ..........................................................................19
Eleventh five year plan(2007-2012) .....................................................................21
Twelfth five year plan(2012-2017) .......................................................................23
Conclusion .............................................................................................................25
Bibliography ..........................................................................................................26

Economic Planning in India An analysis

RESEARCH METHODOLOGY

The researcher has followed the non doctrinal method for research design. The research is
based on both primary and secondary sources. Literature review has been done extensively in
order to make a comprehensive presentation. Books from the universitys library have been
used. Computer from the computer laboratory of the university has been used for the purpose
of secondary research and is the main source of project.

OBJECTIVES

To analyse the five years of economic planning in India.

To discuss about their objectives ,targets ,and achievements.

Economic Planning in India An analysis

Introduction
For the smooth functioning of any economy, planning plays an important role.
The Planning Commission has been entrusted with the responsibility of the creation,
development and execution of India's five year plans. India's five year plans are also
supervised by the Planning commission.The economy of India is based in part on planning
through its five-year plans, developed, executed and monitored by the Planning Commission.
With the Prime Minister as the ex officio Chairman, the commission has a nominated Deputy
Chairman, who has rank of a Cabinet minister. Montek Singh Ahluwalia is currently the
Deputy Chairman of the Commission. The tenth plan completed its term in March 2007 and
the eleventh plan is currently underway.The tenth plan completed its term in March 2007 and
the eleventh plan is currently underway. As Indias government prepares to submit its
approach paper for its 12th five-year plan (a plan which covers years 2012 to 2017).
History of planning in India

First attempt to initiate economic planning in India was made by Sir M.Visvesvarayya ,a
noted engineer and politician ,in 1934 through his book , planned economy for india .In
1938 National Planning Commission was set up under the chairmanship of Jawaharlal
Nehru by the Indian National Congress. Its recommendation could not be implemented
because of the beginning of the second world war and changes in the Indian Political
Situation.

In 1944 , Bombay Plan was presented by 8 leading industrialists of Bombay.

The Bombay Plan is the name commonly given to a World War II-era set of proposals
for the development of the post-independence economy of India. The plan, published
in 1944/1945 by eight leading Indian industrialists, proposed state intervention in the
economic

development

of

the nation after

independence

from

the United

Kingdom (which occurred in 1947). Although the Bombay Plan did not itself propose
a socialist agenda, "virtually all" commentators acknowledge "that there is a direct
line of continuity from the Bombay Plan of 1944-1945 to the First Five-Year Plan in
1950.

In 1944 , Gandhian Plan was given by S.N.Agrawal.

In 1945, Peoples Plan was given by M N Roy.

5

Economic Planning in India An analysis

In 1950, Sarvodaya Plan was given by J P Narayan. A few points of this plan were
accepted by the Government.

The Planning Commission of India

The Planning Commission was set up on March 15, 1950 under the chairmanship of
JL Nehru, by a resolution of Union Cabinet.

It is an extra constitutional, non statutory body.

It consists of Prime Minister as the ex officio Chairman, one Deputy Chairman

appointed by the PM and some full time members.

The tenure of its members and deputy chairman is not fixed. There is no definite
definition of its members also. They are appointed by the Government on its own
discretion. The number of members can also change according to the wishes of the
Government.

Functions

Assessment of material, capital and human resources of the country.

Formulation of plans for the most effective and balanced utilization of countrys
resources.

To determine the various stages of planning and to propose the allocation of resources
on the priority basis.

To act as an advisory body to the Union Government.

To evaluate from time to time the progress achieved in every stage of the plan and
also to suggest remedial measures.

To advise the Centre and the State Governments from time to time on special matters
referred to the Commission.

National Development Council in India

All the plans made by the Planning Commission have to be approved by National
Development Council first. It was constituted to build co operation between
the States and the Planning Commission for economic planning.

It is an extra constitutional and extra legal body.

Economic Planning in India An analysis

It was set up on August 6, 1952, by a proposal of the Government. The PM is the ex

officio chairman of NDC. Other members are Union Cabinet Ministers, Chief
Ministers and Finance Ministers of all States, Lt. Governors of Union Territories and
Governors of Centrally ruled States.

State Planning Board in India

Apex planning body at State level is generally a State Planning Body comprising the
Chief Minister as Chairman, Finance and Planning Ministers of that State and some
technical experts.

District Planning Committee is also there comprising both official and non official
members.

Objectives of Planning
Increase in National Income (NI) and Per Capita Income (PCI) ,Full Employment ,Poverty
Eradication via rapid economic growth ,reduction of inequalities of income and wealth
,socialistic pattern of society and absence of exploitation ,reduction in regional inequalities
,and attaining selfreliance.

First Five-Year Plan (19511956)

The first Indian Prime Minister, Jawaharlal Nehru presented the first five-year plan to the
Parliament of India on December 8, 1951.This plan was based on the Harrod-Domar model.
The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation.
The agricultural sector was hit hardest by the partition of India and needed urgent attention.
The total planned budget of 2069 crore was allocated to seven broad areas: irrigation and
energy (27.2 percent), agriculture and community development (17.4 percent), transport and
communications (24 percent), industry (8.4 percent), social services (16.64 percent), land
rehabilitation (4.1 percent), and for other sectors and services (2.5 percent). The most
important feature of this phase was active role of state in all economic sectors. Such a role
was justified at that time because immediately after independence, India was facing basic
problemsdeficiency of capital and low capacity to save.Community development program
was launched in 1952.
7

Economic Planning in India An analysis

The target growth rate was 2.1% annual gross domestic product (GDP) growth; the achieved
growth rate was 3.6% The net domestic product went up by 15%. The monsoon was good
and there were relatively high crop yields, boosting exchange reserves and the per capita
income, which increased by 8%. National income increased more than the per capita income
due to rapid population growth. Many irrigation projects were initiated during this period,
including the Bhakra Dam and Hirakud Dam. The World Health Organization, with the
Indian government, addressed children's health and reduced infant mortality, indirectly
contributing to population growth.
At the end of the plan period in 1956, five Indian Institutes of Technology (IITs) were started
as major technical institutions. The University Grant Commission was set up to take care of
funding and take measures to strengthen the higher education in the country. Contracts were
signed to start five steel plants, which came into existence in the middle of the second fiveyear plan.The main objectives of first five year plan was 1.To correct the disequilibrium in the economy caused by 3 main problems a).influx of refugees .
b).Severe food shortage.
c).Mounting inflation.
2).To initiate a process of all round balanced development to ensure a rising national income
and a steady improvement in living standards.
3).It emphasized on agriculture ,price stability ,power and transport .
The plan was successful .Target Growth: 2.1% Actual Growth: 3.6%

Second Five-Year Plan (19561961)

The second five-year plan focused on industry, especially heavy industry. Unlike the First
plan, which focused mainly on agriculture, domestic production of industrial products was
encouraged in the Second plan, particularly in the development of the public sector. The plan
8

Economic Planning in India An analysis

followed the Mahalanobis model, an economic development model developed by the Indian
statistician ,Prasanta Chandra Mahalanobis in 1953. The plan attempted to determine the
optimal allocation of investment between productive sectors in order to maximise long-run
economic growth . It used the prevalent state of art techniques of operations research and
optimization as well as the novel applications of statistical models developed at the Indian
Statistical Institute. The plan assumed a closed economy in which the main trading activity
would be centered on importing capital goods. 1 Its emphasis was on economic stability
.Agriculture target fixed in the first plan was almost achieved .Consequently the agriculture
sector got low priority in the second five year plan.Its objective was
1).Rapid Industrialisation ,particularly basic and heavy industries such as iron and steel
,heavy chemicals like nitrogeneous fertilizers ,heavy engineering and machine building
industry.
2).Besides ,the industrial policy of 1956 emphasized the role of public sector and accepted
the establishment of a socialistic pattern of society as the goal of economic policy.2
It advocated huge imports which led to emptying of funds leading to foreign loans.It shifted
basic emphasis from agriculture to industry far too soon. During this plan price level
increased by 30% ,against the decline of 13% during the first plan. Hydroelectric power
projects and five steel mills at Bhilai, Durgapur, and Rourkela were established. Coal
production was increased. More railway lines were added in the north east.The Atomic
Energy Commission was formed in 1958 with Homi J. Bhabha as the first chairman. The
Tata Institute of Fundamental Research was established as a research institute. In 1957 a
talent search and scholarship program was begun to find talented young students to train for
work in nuclear power.
The total amount allocated under the second five year plan in India was Rs. 4,600 crore. This
amount was allocated among various sectors:

Power and irrigation

Social services

Jalal Alamgir, India's Open-Economy Policy: Globalism, Rivalry, Continuity (London and New York: Routledge
2008), Chapter 2
2
Baldev Raj Nayar, Globalization And Nationalism: The Changing Balance Of India's Economic Policy, 1950
2000

Economic Planning in India An analysis

Communications and transport

Miscellaneous

Target Growth:4.5% Growth achieved:4.0%

Third Five-Year Plan (19611966)

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 [Defence industry]. In 19651966, India fought a [Indo-Pak] War with Pakistan.
Due to this there was a severe drought in 1965. The war led to inflation and the priority was
shifted to price stabilisation. The construction of dams continued. Many cement and fertilizer
plants were also built. Punjab began producing an abundance of wheat.
Many primary schools have been started in rural areas. In an effort to bring democracy to the
grassroot level, Panchayat elections have been started and the states have been given more
development responsibilities.
State electricity boards and state secondary education boards were formed. States were made
responsible for secondary and higher education. State road transportation corporations were
formed and local road building became a state responsibility. The main aim of this plan
period was to make india a self reliant and self generating economy. The objective of the
plan included the expansion of basic industries ,optimum utilization of countrys labour
power and reducing the inequalities of income and wealth.This plan relied heavily on foreign
aid. Prices increased by 36% in 5 years. Hence 3rd plan failed in every respect.
Target Growth: 5.6% Actual Growth: 2.4% .

Three annual plans (1966-69)

Plan holiday for 3 years .

The prevailing crisis in agriculture and serious food shortage necessitated the
emphasis on agriculture during the annual plans.
10

Economic Planning in India An analysis

During

these

plans

whole

new

agricultural

strategy

involving

wide

spreaddistribution of high yielding varities (HYVs) of seeds ,the extensive use of

fertilizers ,exploitation of irrigation potential and soil conservation was put into action
to tide over the crisis in agricultural production .
During the annual plans ,the economy basically absorbed the shocks given during the third
plan ,making way for a planned growth .

Fourth Five-Year Plan (19691974)

The 4th five year plan set before itself the two principal objectives
a).Growth with stability
b).Progress towards self reliance .
This plan had to tackle the influx of Bangladeshi refugees before and after 1971 Indo Pak
war .At this time Indira Gandhi was the Prime Minister. The Indira Gandhi government
nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture.
In addition, the situation in East Pakistan (now Bangladesh) was becoming dire as the IndoPakistani War of 1971 and Bangladesh Liberation War took Funds earmarked for the
industrial development had to be diverted for the war effort. India also performed the Smiling
Buddha underground nuclear test in 1974, partially in response to the United States
deployment of the Seventh Fleet in the Bay of Bengal. The fleet had been deployed to warn
India against attacking West Pakistan and extending the war.During this plan period prices
increased by about 61%.
Target Growth: 5.7% Actual Growth: 3.3%.

Fifth Five-Year Plan (19741979)

The fifth plan period prepared and launched by D.D.Dhar proposed to achieve two main
objectivesa).Removal of poverty
11

Economic Planning in India An analysis

b).Attainment of self reliance, through promotion of high rate of growth ,better distribution of
income and a very significant growth in the domestic rate of savings.
In this plan period National Program of Minimum Needs was initiated in which primary
education ,drinking water ,medical facilities in rural areas ,nourishing food ,land for the
houses of landless labours ,rural roads , electrification of the villages and cleanliness of the
dirty suburbs were included.Stress was by laid on employment, poverty alleviation, and
justice. The plan also focused on self-reliance in agricultural production and defence. In 1978
the newly elected Morarji Desai government rejected the plan. Electricity Supply Act was
enacted in 1975, which enabled the Central Government to enter into power generation and
transmission.
The Indian national highway system was introduced and many roads were widened to
accommodate the increasing traffic. Tourism also expanded.
Target Growth: 4.4% Actual Growth: 5.0.

Rolling Plan(1978 1980)

There were two sixth plans One by janata govt. (for 1978-1983) which was in operation for
2 years only and the other by the congress govt. When it returned to power in 1980.The
Janata govt. Plan is also called Rolling Plan .The focus of the plan was enlargement of the
employment potential in agriculture and allied activities, encouragement to household and
small industries producing consumer goods for consumption and to raise the incomes of the
lowest income classes through minimum needs program .

Sixth Five-Year Plan (19801985)

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.
When Rajiv Gandhi was elected as the prime minister, the young prime minister aimed for
rapid industrial development, especially in the area of information technology. Progress was
12

Economic Planning in India An analysis

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. Price controls were eliminated and ration
shops were closed. This led to an increase in food prices and an increase in the cost of living.
This was the end of Nehruvian Plan and Rajiv Gandhi was prime minister during this period.
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.
Even the workers who were more inclined towards the leftist ideology were not much
convinced. This slowed down the pace of progress.

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.Family planning was also expanded in order to prevent
13

Economic Planning in India An analysis

overpopulation. In contrast to China's strict and binding one-child policy, Indian policy did
not rely on the threat of force. More prosperous areas of India adopted family planning more
rapidly than less prosperous areas, which continued to have a high birth rate. The objective of
sixth five year plan was Increase in National Income ,modernization of technology ,ensuring
continuous decrease in poverty and unemployment ,population control through family
planning.
Target Growth: 5.2% Actual Growth: 5.4%.
Seventh Five-Year Plan (19851990)
The seventh 7th Five Year Plan emphasized policies and programs which aimed at rapid
growth in food-grains production ,increased employment oppurtunities and productivity
within the framework of basic tenants of planning This Five Year Plan was the come back
vehicle of the Indian National Congress Party into power. 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 plan laid stress on improving the productivity level of
industries by upgrading of technology.
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.
As an outcome of the sixth five year plan, there had been steady growth in agriculture,
control on rate of Inflation, and favourable balance of payments which had provided a strong
base for the seventh five Year plan to build on the need for further economic growth. The 7th
Plan had strived towards socialism and energy production at large.

Backdrop of the 7th Five Year Plan

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
14

Economic Planning in India An analysis

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.

Contents of the 7th Five Year Plan

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 endeavored 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 labor force was
anticipated to grow by 39 million at the end of fifth year. Overall improvement was the aim
of the 7th Five Year Plan. Therefore care was taken to establish a harmony in all the sectors
that are contained in an economy. Special care was taken to 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
The thrust areas of the 7th Five year plan have been enlisted below:

Social Justice

Removal of oppression of the weak

Using modern technology

Agricultural development

Anti-poverty programs

Full supply of food, clothing, and shelter

Increasing productivity of small- and large-scale farmers

Making India an Independent Economy

15

Economic Planning in India An analysis

Based on a 15-year period of striving towards steady growth, the 7th Plan was focused on
achieving the pre-requisites of self-sustaining growth by the year 2000. The Plan expected a
growth in labour force of 39 million people and employment was expected to grow at the rate
of 4 percent per year. Under the Seventh Five Year Plan, India strove to bring about a selfsustained economy in the country with valuable contributions from voluntary agencies and
the general populace.
Target Growth: 5.0% Actual Growth: 5.7%.
Eighth Five-Year Plan (19921997)
198991 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. 8th Five Year Plan
commenced on 1992 and carried on till 1997. The plan undertook various drastic policy
measures to combat the bad economic situation and to undertake an average annual growth of
5.6%.The basic objective of this period was the modernization of industrial sector. This plan
focused on technical development. Through this plan the reduction of deficit and foreign debt
was aimed at. The rectification of certain flawed plans and policies were also done under this
five year plan. During this period only India received a coveted opportunity to become a
member of the World Trade Organization on January 1st 1995.
In 1991, India faced a crisis in Foreign Exchange reserves, left with reserves of only about
US$1 billion. Thus, under pressure, the country took the risk of reforming the socialist
economy. P.V. Narasimha Rao was the twelfth Prime Minister of the Republic of India and
head of Congress Party, and led one of the most important administrations in India's modern
history overseeing a major economic transformation and several incidents affecting national
security. At that time Dr. Manmohan Singh (currently, Prime Minister of India) 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.
Modernization of industries was a major highlight of the Eighth Plan. Under this plan, the
gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and
foreign debt. Meanwhile India became a member of the World Trade Organization on 1
January 1995.This plan can be termed as Rao and Manmohan model of Economic
development. The major objectives included, controlling population growth, poverty
reduction, employment generation, strengthening the infrastructure, Institutional building,
16

Economic Planning in India An analysis

tourism management, Human Resource development, Involvement of Panchayat raj, Nagar
Palikas, N.G.O'S and Decentralisation and people's participation. Energy was given priority
with 26.6% of the outlay. An average annual growth rate of 6.78% against the target 5.6%
was achieved.
To achieve the target of an average of 5.6% per annum, investment of 23.2% of the gross
domestic product was required. The incremental capital ratio is 4.1.The saving for invetsment
was to come from domestic sources and foreign sources, with the rate of domestic saving at
21.6% of gross domestic production and of foreign saving at 1.6% of gross domestic
production.
Agricultural Activities During this Period
Agriculture happens to be the largest contributor to the GDP of India. In fact two third of the
work force was dependent on agriculture. Industries also made use of agricultural produce as
inputs in their production process.

Self-Sufficiency in Agricultural Production

Self-sufficiency in agricultural production was a top priority during India's eighth Five Year
Plan since most of the population depended on that. Production of food increased to 176.22
million from 51 million which was a huge leap in comparison to the previous years.

Ninth Five-Year Plan (19972002)

Ninth Five Year Plan India runs through the period from 1997 to 2002 with the main aim of
attaining

objectives

like

speedy industrialization,

human

development,

full-scale

employment, poverty reduction, and self-reliance on domestic resources. Like all other Five
Year Plans made so far, the 9th Five Year Plan (1997-2002) is formulated, executed and
supervised by the Planning Commission. Background of Ninth Five Year Plan India: Ninth
Five Year Plan was formulated amidst the backdrop of India's Golden jubilee of
Independence.
Primary objectives of the 9th Five Year Plan:

17

Economic Planning in India An analysis

Each and every Five Year Plan of the Indian government is formulated, keeping in mind the
fulfillment of certain objectives. The 9th Five Year Plan is no exception. The main objective
of this Plan is to achieve the following goals:

to prioritize agricultural sector and emphasize on the rural development

to generate adequate 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 infrastructural facilities like education for all, safe drinking
water, primary health care, transport, energy

to check the growing population increase

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

Industrialization at a rapid pace

Reduction in poverty level

Gaining self-sufficiency on local resources

Complete employment for all countrymen

Price stabilization should be initiated to hasten up the rate of growth of the Indian
economy

Control the ever-increasing rate of population

Creating an independent market, for enhancing private financial investments

Promotion of social events like conservation of specific benefits for special social
groups, female empowerment, etc.

Achieving self sufficiency in food production

Generation of equal opportunities for employment and taking steps to reduce poverty

Evolution of the 9th Five Year Plans: Some facts

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 governments realization that the latent economic reserves of the country
which were still not explored, should be utilized for the overall development and benefit of
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Economic Planning in India An analysis

the Indian economy in the coming five years. However, this could only be done when the
Indian government offers strong support and priority to the social spheres of the country,
focusing especially on the complete elimination of poverty. Taking into consideration the
past weaknesses, the 9th Five Year Plan endeavored to formulate fresh actions to initiate
improvement in the overall economic and social sectors of the nation. To this effort, there
was mutual contribution from the general population of India as well as the governmental
agencies. This joint private and public attempt ultimately assured development of the Indian
economy.
During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower
than the target GDP growth of 6.5 per cent.

Tenth Five-Year Plan (20022007)

The 10th Five Year Plan (2002-2007) targets at a GDP growth rate of 8% per annum. Taking
note of the inabilities of the earlier Five Years Plans, especially that of the 9th Five Year
Plan, the Tenth Five Year Plan decides to take up a resolution for immediate implementation
of all the policies formulated in the past. This amounts to making appeals to the higher
government authorities, for successful completion of their campaigns associated with the
rapid implementation of all past policies. The primary aim of the 10th Five Year Plan is to
renovate the nation extensively, making it competent enough with some of the fastest
growing economies across the globe. It also intends to initiate an economic growth of 10% on
an annual basis. In fact, this decision was taken only after the nation recorded a consistent 7%
GDP growth, throughout the past decade. The 7% growth in the Indian GDP is considered to
be considerably higher that the average growth rate of GDP in the world. This enabled the
Planning Commission of India to extend the GDP limit further and set goals, which will drive
India to become one of the best industrial countries in the world, to be clubbed and
recognized with the worlds best industrialized nations. Like all other Five Year Plans, the
10th Five Year Plan is also devised, executed and supervised by the Planning Commission of
India.
Chief Objectives of the 10th Five Year Plan:

Attain 8% GDP growth per year.

Reduction of poverty ratio by 5 percentage points by 2007.

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Economic Planning in India An analysis

Providing gainful and high-quality employment at least to the addition to the labour
force.

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

Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012

Economic Growth further accelerated during this period and crosses over 8% by
2006.

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

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.

The 10th Five year Plan of India in a nutshell:

o Increasing the mobility of all the available financial resources of India, and
optimizing them as well
o Setting up of a state-of-the-art infrastructure for all the existing industries in India.
o Encourage the initiative of capacity building within the Indian industrial sector
o Creating a friendly, amiable and pleasant investment environment in India
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Economic Planning in India An analysis

o Encouraging sufficient transparency in the corporate sectors of India
o Introduction of reforms in the industrial sectors, which are more investor-friendly in
nature
Target growth:8.1% Growth achieved:7.7%.
Eleventh Five-Year Plan (20072012)
India has emerged as a super power. The transition was not easy. Guidelines for operating the
economy was provided by the five year plans. Owing to India's five year plans, great
advancement has been made with regard to India's national income. Since 1951, the year
when the 1st five year plan was presented by the then Prime Minister Jawaharlal Nehru, India
has come a long way. India has taken giant strides and today it is considered as one of the
emerging powers. India is currently following the 11th five year plan. The tenure of the 11th
five year plan is from 2007 to 2012.
The eleventh plan has the following objectives:
1. Income & Poverty
o

Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th
Plan in order to double per capita income by 201617

Increase agricultural GDP growth rate to 4% per year to ensure a broader

spread of benefits

Create 70 million new work opportunities.

Reduce educated unemployment to below 5%.

Raise real wage rate of unskilled workers by 20 percent.

Reduce the headcount ratio of consumption poverty by 10 percentage points.

2. Education
o

Reduce dropout rates of children from elementary school from 52.2% in

200304 to 20% by 201112

Develop minimum standards of educational attainment in elementary school,

and by regular testing monitor effectiveness of education to ensure quality

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

Lower gender gap in literacy to 10 percentage point

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Economic Planning in India An analysis

o

Increase the percentage of each cohort going to higher education from the
present 10% to 15% by the end of the plan

3. Health
o

Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000
live births

Reduce Total Fertility Rate to 2.1

Provide clean drinking water for all by 2009 and ensure that there are no slipbacks

Reduce malnutrition among children of age group 03 to half its present level

Reduce anaemia among women and girls by 50% by the end of the plan

4. Women and Children

o

Raise the sex ratio for age group 06 to 935 by 201112 and to 950 by 2016
17

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

5. Infrastructure
o

Ensure electricity connection to all villages and BPL households by 2009 and
round-the-clock power.

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

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 201617

6. Environment
o

Increase forest and tree cover by 5 percentage points.

Attain WHO standards of air quality in all major cities by 201112.

Treat all urban waste water by 201112 to clean river waters.

Increase energy efficiency by 20 %

Target growth:8.33% Growth achieved:7.9%

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Economic Planning in India An analysis

12th Five Year Plan(2012 2017)
Indias 12th Five Year Plan Focuses on Inclusive Growth. As Indias government prepares
to submit its approach paper for its 12th five-year plan (a plan which covers years 2012 to
2017), the Planning Commissions focus on instilling inclusive growth is making headway.
The plan is expected to be one that encourages the development of Indias agriculture,
education, health and social welfare through government spending. It is also expected to
create employment through developing Indias manufacturing sector and move the nation
higher up the value chain. The commission will likely strive to enact policies that will
achieve somewhere around a 10 percent growth rate in factories and a 4 percent growth rate
in farm produce, though Prime Minister Singh has asked the plan to set the nations growth
rate firmly at 9 percent to 9.5 percent. An important aspect of generating inclusive growth
is shifting the target of government aid to rural areas. Typically, large projects such as power
generation, roads whereby freight can travel, and airports receive the lions share of
government subsidies, while rural infrastructure receives comparatively little. Rural
infrastructure, which serves 70 percent of the population, doesnt get the attention it deserves.
As the Planning Commission sets out to draft the countrys planned investments for the next
five years, it is important to take note of this gap, and the innovative solutions needed to fill
it. As indicated from the planning commissions presentation to the prime minister on April
21, the quantitative metrics known thus far in the early stage of the five-year plan are:

A target of GDP growth in the 9 percent to 9.5 percent range

An increase in literacy rates to 100 percent between the plans period from 2012 to
2017

An increased expenditure on health from 1.3 percent to 2.0 percent of GDP

In a boon for industry, the planning commission indicated that it aims to have industry and
manufacturing-related activities grow by 11 percent over the next five years, contrasted to 8
percent over the previous 11th five-year plan. It also aims to undertake somewhat vaguely
defined, but certainly well-intentioned, structural and regulatory reforms to facilitate
investment .The presentation highlighted the planning commissions views that commercial
energy demand is expected to increase by 7 percent per year over the next five years.To
address that increase in demand, the planning commission recommended that all methods of
current energy production and distribution be developed, from coal to nuclear energy to solar
and wind, and proposed that existing taxes on electricity should not be raised.Interestingly,
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Economic Planning in India An analysis

the Planning Commission envisioned an expansive role for Indian SOE Coal India .Coal
India must become a coal supplier and not just a mining company. Should plan to import coal
to meet coal demands. the 12th five-year plan promises a lot for rural development and
growth. the Indian government may be attempting to promote a policy of reverse migration
by making rural living more attractive with some access to modern amenities.

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Economic Planning in India An analysis

CONCLUSION

For the smooth functioning of any economy, planning plays an important role.
The Planning Commission has been entrusted with the responsibility of the creation,
development and execution of India's five year plans. India's five year plans are also
supervised by the Planning commission.The economy of India is based in part on planning
through its five-year plans, developed, executed and monitored by the Planning Commission.
Objectives of Planning are Increase in National Income (NI) and Per Capita Income (PCI)
,Full Employment ,Poverty Eradication via rapid economic growth ,reduction of inequalities
of income and wealth ,socialistic pattern of society and absence of exploitation ,reduction in
regional inequalities ,and attaining selfreliance.
For the effective development of every country ,their should be proper planning of the
available resources ,so that it can be used more efficiently and effectively ,if the resources are
not properly allocated than their is a chance of corruption or their may be disutilisation of
resources .

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Economic Planning in India An analysis

BIBLIOGRAPHY

BIBLIOGRAPHY
1).Jalal Alamgir, India's Open-Economy Policy: Globalism, Rivalry, Continuity.
2).Baldev Raj Nayar, Globalization And Nationalism: The Changing Balance Of India's
Economic Policy, 19502000.
3).General Knowledge year book of Arihant Mahasagar.

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