India's Five Year Plans

1. Five-Year Plans
-N R SHANKAR RAM

2. Overview
 Five-Year Plans (FYPs) are centralized and integrated national economic
programs.
 First implemented FYP in the Soviet Union in the late 1920s- Joseph Stalin .
 Most communist states and several capitalist countries subsequently have
adopted them.
 India launched its First FYP in 1951, immediately after independence under
socialist influence of first Prime Minister Jawaharlal Nehru

3. Bombay Plan
 World War II-era set of proposals the development of the post-
independence economy of India.
 Published in 1944-1945 by eight leading Indian industrialists a transition from an
agrarian to an industrialized society,
 Reaction to the widespread social discontent of the 1940s
 unprecedented industrial growth during wartime
 fear that the movement against colonial rule would become a movement against
private property.
 Establishment of critical industries as public sector enterprises while
simultaneously ensuring a market for the output through planned purchases.

4. First Plan (1951-1956)
 Development of the primary sector.
 Active role of state in all economic sectors.
 basic problems—deficiency of capital and low capacity to save.
 The monsoon was good and there were relatively high crop yields, boosting exchange
reserves and the per capita income, which increased by 8%.
 Irrigation projects were initiated during this period
 Five Indian Institutes of Technology (IITs) and The University Grant Commission (UGC)
 Contracts were signed to start five steel plants, which came into existence in the middle of
the Second Five-Year Plan.
 The target growth rate was 2.1% annual GDP , the achieved growth rate was 3.6%

5. Second Plan (1956-1961)
 Particularly in the development of the public sector.
 Hydroelectric power projects and Coal production was increased.
More railway lines were added in the north east.
 The Tata Institute of Fundamental Research was established as a research
institute.
 The target growth rate was 4.5% and the actual growth rate was 4.27%.

6. Third Plan (1961–1966)
 Stressed agriculture ,Construction of dams continued-cement and fertilizer plants-Wheat in
Punjab.
 Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards
the defense industry and the Indian Army.
 In 1965–1966- War with Pakistan + a severe drought in 1965.
 The war led to inflation and the priority was shifted to price stabilization.
 The target growth rate was 5.6%, but the actual growth rate was 2.4%
 Due to miserable failure -"plan holidays" (from 1966–67, 1967–68, and 1968–69).
 During 1966-67 there was again the problem of drought. Equal priority was given to
agriculture, its allied activities, and industrial sector.

7. Fourth Plan (1969–1974)
 The Indira Gandhi government nationalized 14 major Indian banks and the Green
Revolution in India advanced agriculture.
 India also performed the Smiling Buddha underground nuclear test in 1974.
 The target growth rate was 5.6%, but the actual growth rate was 3.3%.

8. Fifth Plan (1974–1979)
 Stress on employment, poverty alleviation (Garibi Hatao) and justice.
 self-reliance in
 Agricultural production
 Defense
 Central government to enter into power generation and transmission.
 The Indian national highway system was introduced -Tourism also expanded.
 The target growth rate was 4.4% and the actual growth rate was 5.0%.

9. Rolling Plan (1978–1980)
 The Janata Party government rejected the Fifth Five-Year Plan and introduced a new Sixth Five-
Year Plan (1978-1983).
 The Rolling Plan - three kind of plans proposed.
 The First Plan is for the present year which comprises the annual budget
 Second is a plan for a fixed number of years, which may be 3, 4 or 5 years. Plan number two is kept
changing as per the requirements of the Indian economy.
 The Third Plan is a perspective plan which is for long terms i.e. for 10, 15 or 20 years. Hence there is no
fixation of dates in for the commencement and termination of the plan in the rolling plans.
 Flexible and are able to overcome the rigidity of fixed five year plans by mending targets, the object of
the exercise, projections and allocations as per the changing conditions in the country’s economy.
 The main disadvantage of this plan is that if the targets are revised each year, it becomes very difficult to
achieve them which are laid down in the five year period and it turned out to be a complex plan.

10. Sixth Plan (1980–1985)
 The Sixth Five-Year Plan 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 socialism.
 Family planning was also expanded in order to prevent overpopulation.
 The target growth rate was 5.2% and the actual growth rate was 5.4%. The only
Five-Year Plan which was done twice.

11. Seventh Plan (1985–1990)
 Stress on improving the productivity level of industries by upgrading of
technology.
 production of food grains,
 generating employment.
 Sixth Five-Year Plan - provided a strong base for the Seventh Five-Year Plan to
build on the need for further economic growth.
 The target growth rate was 5.0% and the actual growth rate was 6.01%.

12. Annual Plans (1990-1992)
 Fast changing political situation at the center and the years 1990-91 and 1991-92
were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after
the initiation of structural adjustment policies.
 1991-crisis in foreign exchange (forex) reserves
 P.V. Narasimha Rao -oversaw 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.
 Beginning of privatization and liberalization in India.

13. Eighth Plan (1992–1997)
 Modernization of industries
 The gradual opening of the Indian economy was undertaken to correct the foreign debt.
 Member of the World Trade Organization on 1 January 1995.
 The major objectives included,
 controlling population growth,
 poverty reduction,
 employment generation,
 strengthening the infrastructure, institutional building, tourism management, human resource
development
 federalism
 An average annual growth rate of 6.78% against the target 5.6% was achieved.

14. Ninth Plan (1997-2002)
 After 50 years of Indian Independence.
 Use the latent and unexplored economic potential of the country to promote
economic and social growth
 complete elimination of poverty.
 Special Action Plans (SAPs) were evolved during the Ninth Five-Year Plan to fulfil
targets within the stipulated time with adequate resources.
 The SAPs covered the areas of social infrastructure, agriculture, information
technology and Water policy.
 The main objective -correct historical inequalities and increase the economic growth in
the country.
 The target growth was 7.1% and the actual growth was 6.8%.

15. Tenth Plan (2002–2007)
 Reduction of poverty rate .
 Providing gainful and high-quality employment at least to the addition to the
labour force.
 Reduction in gender gaps in literacy and wage rates
 20-point program was introduced.
 Target growth: 8.1% - growth achieved: 7.7%

16. Eleventh Plan (2007-2012)
 Rapid and inclusive growth.(Poverty reduction)
 Emphasis on social sector and delivery of service therein.
 Empowerment through education and skill development.
 Reduction of gender inequality.
 To increase the growth rate in agriculture, industry and services
 Environmental sustainability.
 Reduce Total Fertility Rate to 2.1
 Provide clean drinking water for all by 2009.

17. Twelfth Plan (2012–2017)
 Growth rate at 8.2% but the National Development Council (NDC) approved 8%
growth rate for 12th five-year plan.
 With the deteriorating global situation, the Deputy Chairman of the Planning
Commission Mr Montek Singh Ahluwalia -growth rate of 9 percent in the next five
years is not possible.
 The Final growth target has been set at 8% by the endorsement of plan at the
National Development Council meeting held in New Delhi.

18. Replace it?- NDRF
 Cater to the needs of earlier times and has participated in his own way in the development of the
country.
 Milton Friedman -American economist, statistician, and writer
 Address the emerging economic needs and strengthen federal structure.
 The Centre had no responsibility to deliver, the commission no power to enforce and the states
who had little say or incentive felt dumped upon.
 National Development and Reforms Commission.
 Finance Minister may deal with states directly on their annual fund allocation.
 Currently, the states deal with Planning Commission for annual plans
 Opportunity
 to create a platform for ideas,
 for evolving solutions to seemingly intractable issues,
 for designing systems to enable implementation.