Economic Planning

• Economic planning means a action to be taken

by the government ,central planning authority
or any specific public authority with a view to
bring desired change in an economy.
• The concept of economic planning was first
conceived by the sovient union in 1928. in this
model of planning free play of market forces
was discarded.
 Major Objectives of Planning in India

Here we detail about the six major objectives

of planning in India, i.e., (a) Economic
Growth, (b) Attaining Economic Equality and
Social Justice, (c) Achieving Full
Employment, (d) Attaining Economic Self-
Reliance, (e) Modernisation of Various
Sectors, and (f) Redressing Imbalances in the
Economy.
(a) Economic Growth:
• Attainment of higher rate of economic growth received topmost
priority in almost all the Five Year Plans of the country. As the
economy of the country was suffering from acute poverty thus by
attaining a higher rate of economic growth eradication of poverty is
possible and the standard of living of our people can be improved.
• The First Plan envisaged a target of 11 per cent increase in national
income against which 18 per cent growth in national income was
achieved. The Second, Third and Fourth Plan envisaged targets for
annual growth rate of 5 per cent. 5.6 per cent and 5.7 per cent
respectively against which the achievements were 4 per cent, 2.6
per cent and 3.4 per cent respectively.

• The Tenth and Eleventh Plan set the target of 8.0 per cent and 9.0
per cent in its annual average growth rate of GDP. Thus attaining
higher rate of economic growth is found as a common objective for
all the Five Year Plans of our country.
(b) Attaining Economic Equality and Social Justice:
• Reduction of economic inequalities and eradication of poverty are
the second group of objective of almost all the Five Year Plans of
our country particularly since the Fourth Plan. Due to the faulty
approach followed in the initial part of our planning, economic
inequality widened and poverty became acute. Under such a
situation, the Fifth Plan adopted the slogan of ‘Garibi Hatao’ for the
first time. The Seventh Plan document shows that nearly 37.4 per
cent of the total population of our country was lying below the
poverty line and the plan aimed to reduce this percentage of 29.2
per cent by 1990.
• Thus to achieve the target, various poverty alleviation programmes
like the National Rural Employment Programme (NREP), Rural
Landless Employment Guarantee Programme (RLEGP) etc. were
introduced. But the performance of these programmes is not up to
the satisfaction.
(c) Achieving Full Employment:
• Five Year Plans of India gave importance on the subject to employment
generation since the Third Plan. The generation of more employment
opportunities was considered as an objective of both the Third and Fourth
Plan of our country. But up to the Fourth Plan employment generation never
received its due priority.
• The Fifth Plan in its employment policy laid special emphasis in absorbing
increments in labour force during this Fifth Plan Period. The Sixth Plan
accorded much importance on the reduction of incidence on unemployment.
• To achieve this target the major programmes which were introduced during
this Plan were Integrated Rural Development Programme (IRDP), the National
Rural Employment Programme (NREP), and various other components of the
Minimum Needs Programme.
• One of the major objectives of the Seventh Plan was a faster growth of
employment opportunities. Thus the plan aimed that the employment
potential would grow at 4 per cent as against the 2.6 per cent growth in the
labour force. Again, the Eighth Plan envisages an annual employment growth
of 2.6 to 2.8 per cent over the next ten years 1992-2002.
• (d) Attaining Economic Self-Reliance:
• One of the very important objectives of Indian Planning is to attain
economic self-reliance. The Fifth Plan also laid much importance on the
attainment of self-reliance.
• Thus this plan aimed at achieving self-sufficiency in the production of
food-grains, raw materials and other essential consumption goods. The
Fifth Plan also emphasized the need for import substitution and export
promotion for attaining economic self- reliance.
• The Sixth Plan also put importance on strengthening the impulses of
modernisation for the achievement of economic and technological self-
reliance. The Seventh Plan and Eighth Plan also followed the path for
achieving self-reliance.
• Although India achieved self-sufficiency in respect of food-grains but it
has not yet achieved self- sufficiency in respect of edible oil. huge
import of petroleum oil along with some other items are creating a
serious drain on our foreign exchange reserves , Thus the objective of
self-reliance still remains unfulfilled.
• (e) Modernisation of Various Sectors:
• The Fourth Plan laid much emphasis on the modernisation of
agricultural sector and undertook a vigorous scheme for
modernisation of agriculture in the name of Green Revolution.
The successive plans also continued their efforts in the same
direction but at a reduced rate.
• The Sixth Plan categorically mentioned this objective of
modernisation for the first time. Here the objective of
modernisation means those structural and institutional
changes in economic activities which can transform a feudal
and colonial economy into a progressive and modern
economy.
• It requires setting up of various types of industries and
advancement of technology.
• (f) Redressing Imbalances in the Economy:
• Regional disparities and imbalances in the economy have become so
acute in India that it needed special attention in our Five Year Plans.
Thus by regional development we mean economic development of
all the regions by exploiting various natural and human resources
and by increasing their per capita income and living standards.
• Since the Second Plan onwards, the Government realized the need
for balanced development. Thus the Second, Third, Fourth and Fifth
Plans laid emphasis on the redressal of economic imbalances for
attaining a balanced regional development.
• The Sixth Plan again aimed at progressive reduction in regional
inequalities in the pace of development and in the diffusion of
technological benefits. The Seventh Plan and Eighth Plan also
carried this objective of balanced development in systematic
manner.
Five year plans of India
• These are the various five year plans and major achievements ,have tried
to make it small and useful , add up all that you like .
• The five years plan in India is framed, executed and monitored by the
Planning Commission of India. Jawahar Lal Nehru was the chairman of the
first Planning Commission of India.
• The duty of the chairman of the planning commission in India is served by
the Prime Minister of the country. The twelth five year plan started in 2012
and is currently underway.
• This is the last five year plan after 2017 there will be Niti Aayog 0r  National
Institution for Transforming India is a Government of India policy think-tank
established by the Narendra Modi government to replace the 
Planning Commission. 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
Objectives and success of different Five Year Plans in India:

    1st Five Year Plan (1951-56)

• It aimed towards the improvement in the fields of agriculture, irrigation
and power and the plan projected to decrease the countries reliance on
food grain imports, resolve the food crisis and ease the raw material
problem especially in jute and cotton.
• Nearly 45% of the resources were designated for agriculture, while
industry got a modest 4.9%.The focus was to maximize the output from
agriculture, which would then provide the momentum for industrial
growth.
• 1st five year plan proved dramatic success as agriculture production
hiked, national income went up by 18%, per capita income by 11% and
per capita consumption by 9%. Heerakud,  bhakra nangal dams
commisioned  UGC and IITs were setup by the end of this plan
2nd Five Year Plan (1956-61)The plan followed the Mahalanobis
model, an economic development model.
• It projected towards the agriculture programs and to meet the raw
material needs of industry, besides covering the food needs of the
increasing population. The Industrial Policy of 1956 was socialistic
in nature. The plan aimed at 25% increase in national income.
• Second Five Year Plan showed a moderate success. Agricultural
production was greatly affected by the unfavorable monsoon in
1957-58 and 1959-60 and also the Suez crisis blocked International
Trading increasing commodity prices.
• atomic energy commision was setup in this plan .steel plants at
Bhilai, Durgapur, and Rourkela were established
3rd Five Year Plan (1961-66)
• Plan’s main motive was to make the country self reliant in
agriculture and industry and for this allotment for power sector
was increased to 14.6% of the total disbursement.
• The plan aimed to increase national income by 30% and
agriculture production by 30% and to promote economic
developments in backward areas; unfeasible manufacturing units
were augmented with subsidies and agriculture production by
30%.
• The 3rd five year plan was affected by wars with China in 1962 and
Pakistan 1965 and bad monsoon.
• panchayat elections were held.
4th Five Year Plan (1969-74)
• This five year plan mainly emphasized on encouraging education
and creating employment opportunities for the marginalized
section of the society as improvement in their standard of living
would only make the country economically self- reliant.
• Another aim of the plan was to create awareness about the
Family planning program among Indians.The achievements of
the fourth plan were not as per the expectations as agriculture
and industrial growth was just at 2.8% and 3.9%
respectively.nuclear test of 1974 and operation green
revolution.
5th Five Year Plan (1974-79)
• The fifth plan mainly aimed on checking inflation
and various non-economic variables like nutritional
requirements, health, family planning etc. The plan
anticipated 5.5% growth rate in national income.
• The plan could not complete its 5 year tenure and
was discontinued by the new Janata (morarji
desai )government in the fourth year only.
• national highway system was also introduced
6th Five Year Plan (1980-85)
• The 6th five year plan was formulated by the
Congress government in 1980 which equally
focused on infrastructure and agriculture. The
plan was successful in achieving a growth of
6% pa.
 7th Five Year Plan (1985-1989)
• The plan focused at improving various sectors
like welfare, education, health, family planning
and also encouraged employment
opportunities. The plan introduced programs
like Jawahar Rozgar Yojana.
• This plan was proved successful in spite of
severe drought conditions for first three years
consecutively.
Period (1989 – 1991)
• This period was of political instability hence, no five
year plan was implemented during the period; only
annual plans were made for the period between
1990 and 1992. The country faced severe balance of
payment crisis.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.
8th Five Year Plan (1992-1997)
• The eighth plan aimed towards modernization
of industries, poverty reduction, encouraging
employment, strengthening the infrastructure.
Other important concerned areas were
devaluation of rupees, dismantling of license
prerequisite and decrease trade barriers.
• The plan helped to achieve an annual growth
rate of 5.6% in GDP and also controlled inflation.
9th Five Year Plan (1997-2002)
• The ninth five year plan focused on increasing
agricultural and rural income and to improve
the conditions of the marginal farmer and
landless laborers.
• The plan helped to achieve average annual
growth rate of 6.7%.
10th Five Year Plan (2002-2007)
• The 10th five year plan targeted towards making
India’s economy as the fastest growing economy on
the global level, with an aim to raise the growth rate
to 10% and to reduce the poverty rate and increase
the literacy rate in the country.
• The plan showed success in reducing poverty ratio by
5%, increasing forest cover to 25%, increasing
literacy rates to 75 % and taking the economic
growth of the country over 8%.
11th Five Year Plan (2007-2012)
• The eleventh five year plan targets to increase GDP growth to 10%, to
reduce educated unemployment to below 5% while it aims to reduce infant
mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births,
reduce Total Fertility Rate to 2.1  in the health sector.
• The plan also targets to ensure electricity connection and clean drinking
water to all villages and increase forest and tree cover by 5%.Accelerate
GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in
order to double per capita income by 2016-17Raise real wage rate of
unskilled workers by 20 percent.Reduce dropout rates of children from
elementary school from 52.2% in 2003-04 to 20% by 2011-12Raise the sex
ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17Ensure
electricity connection to all villages and BPL households by 2009 and
round-the-clock power.
 12 five Year Plan(2012-2017)
th

• 12th Five Year Plan 2012-17 Targets
12th Five Year Plan 2012-17 as per the draft document released
by the Planning Commission aims at a growth rate of 8%. This is
the revised rate when compared to the initial approach paper.
Other targets of the Twelfth Five Year Plan in different sectors
are listed below.
• Vision of 12th Five Year Plan (2012-17)
Twelfth Five Year Plan focuses on Growth - Growth which is
• Faster
• Inclusive
• Sustainable
25 Core Monitorable Targets of the 12th Five Year Plan (2012-17)

• Economic Growth
• Real GDP growth at 8%.
• Agriculture growth at 4%.
• Manufacturing growth at 10%.
• Every state must attain higher growth rate
than the rate achieved during 11th plan.
Poverty and Employment
• Poverty rate to be reduced by 10% than the rate at the
end of 11th plan.
• 5 Crore new work opportunities and skill certifications
in non-farm sector.
Education
• Mean years of schooling to increase to 7 years.
• 20 lakh seats for each age bracket in higher education.
• End gender gap and social gap in school enrollment.
• Health
• Reduce : IMR to 25; MMR to 1. Increase Child
Sex Ratio to 950.
• Reduce Total Fertility Rate to 2.1
• Reduce under nutrition of children in age
group 0-3 to half of NFHS-3 levels.
• Infrastructure
• Investment in Infrastructure at 9% of GDP
• Gross Irrigated Area 103 million hectare (from
90 million hectare)
• Electricity to all villages; Reduce AT&C losses by 20%.
• Connect Villages with All Weather Roads
• National and State high ways to a minimum of 2 lane standard.
• Complete Eastern and Western Dedicated Freight Corridors.
• Rural Tele-Density to 70%.
• 40 Litres Per Capita Per Day Drinking Water to 50% of rural
population; Nirmal Gram Status to 50% of all Gram Panchayats.
• Environment and Sustainability
• Increase green cover by 1 million hectare
every year.
• 30,000 MW renewable energy
during Five Year Period.
• Emission intensity of GDP to be reduced to 20-
25% of 2005 levels by 2020.