Topic – Five Year Plan

Paper – Economics
UNIVERSITY OF LUCKNOW

FACULTY OF LAW

SUBMITTED BY SUBMITTED TO
Name – Ved Prakash Rao Dr. Manish Srivastava
Roll No - 44
Semester - II
Course - LLB (Integrated)
 CONTENT
Introduction

History of Planning in India & Origin of Five Year Plans:

First Plan (1951–1956)

Second Plan (1956–1961)

Third Plan (1961–1966)

Plan Holidays (1966–1969)

Fourth Plan (1969–1974)

Fifth Plan (1974–1979)

Rolling Plan (1978–1980)

Sixth Plan (1980–1985)

Seventh Plan (1985–1990)

Annual Plans (1990–1992)

Eighth Plan (1992–1997)

Ninth Plan (1997–2002)

1. Budget

2. Objectives

3. Strategies

4. Performance

Tenth Plan (2002–2007)

Eleventh Plan (2007–2012)

Twelfth Plan (2012–2017)

CONCLUSION
 ACKNOWLEDEMENT
I would like to express my special thanks of gratitude to Dr. Manish
Srivastava who gave me the golden opportunity to do this wonderful
assignment of “Five Year Plan” who also helped me in completing
my assignment .I am really thankful to him .

Many people especially my classmates, have made valuable comment

suggestions on this proposal which gave us an inspiration to improve
my assignment .I am thank all the people for their help directly and
indirectly to complete my assignment .
History of Planning in India & Origin of Five Year
Plans:
Though the planned economic development in India began in 1951 with the
inception of First Five Year Plan , theoretical efforts had begun much earlier , even
prior to the independence. Setting up of National Planning Committee by Indian
National Congress in 1938 , The Bombay Plan & Gandhian Plan in 1944, Peoples
Plan in 1945 (by post war reconstruction Committee of Indian Trade Union),
Sarvodaya Plan in 1950 by Jaiprakash Narayan were steps in this direction Five
Year Plans (FYPs) are centralized and integrated national economic programs.
Joseph Stalin implemented the first FYP in the Soviet Union in the late 1920s.
Most communist states and several capitalist countries subsequently have adopted
them. China and India both continue to use FYPs, although China renamed its.
Eleventh FYP, from 2006 to 2010, a guideline (guihua), rather than a plan (jihua),
to signify the central government’s more hands-off approach to development After
independence, India launched its First FYP in 1951, under socialist influence of
first Prime Minister Jawaharlal Nehru. The process began with setting up of
Planning Commission in March 1950 in pursuance of declared objectives of the
Government to promote a rapid rise in the standard of living of the people by
efficient exploitation of the resources of the country, increasing production and
offering opportunities to all for employment in the service of the community. The
Planning Commission was charged with the responsibility of making assessment of
all resources of the country, augmenting deficient resources, formulating plans for
the most effective and balanced utilisation of resources and determining priorities.
The first Five-year Plan was launched in 1951 and two subsequent five-year plans
were formulated till 1965, when there was a break because of the Indo-Pakistan
Conflict. Two successive years of drought, devaluation of the currency, a general
rise in prices and erosion of resources disrupted the planning process and after
three Annual Plans between 1966 and 1969, the fourth Five-year plan was started
in 1969. The Eighth Plan could not take off in 1990 due to the fast changing
political situation at the Centre 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. For the first eight Plans the emphasis was on a
growing public sector with massive investments in basic and heavy industries, but
since the launch of the Ninth Plan in 1997, the emphasis on the public sector has
become less pronounced and the current thinking on planning in the country, in
general, is that it should increasingly be of an indicative nature.
First Plan (1951–1956)
The First Indian Prime Minister, Jawaharlal Nehru, Presented The First Five-Year
Plan To The Parliament Of India And Needed Urgent Attention. The First Five-
Year Plan Was Launched In 1951 Which Mainly Focused In Development Of The
Primary Sector. The First Five-Year Plan Was Based On The Harrod–Domar
Model With Few Modifications.

The Total Planned Budget Of Rs.2069 Crore (2378 Crore Later) Was Allocated To
Seven Broad Areas: Irrigation And Energy (27.2%), Agriculture And Community
Development (17.4%), Transport And Communications (24%), Industry (8.4%),
Social Services (16.6%), Rehabilitation Of Landless Farmers (4.1%), And For
Other Sectors And Services (2.5%). 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
Problems—Deficiency Of Capital And Low Capacity To Save.

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, Hirakud, Mettur Dam And Damodar Valley
Dams. The World Health Organization (WHO), 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 Grants
Commission (UGC) 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 Five-
Year Plan. The Plan Was Quasi-Successful For The Government.
Second Plan (1956–1961)
The Second Plan was considered more ambitious than the First Plan. It provided
for about twice as much the development expenditure as given by the earlier plan.
The aims of the Second Plan were formulated as follows:

i. An annual increase of 5 per cent in the national income;

ii. Provision of additional employment to about 10 million people;

iii. Rapid industrialisation with particular emphasis on the production of iron and
steel, development of basic and key industries and on their co-ordination with a
planned expansion of large scale consumer goods and, cottage and small-scale
industries; and

iv. Reduction of inequalities in income and wealth and more even distribution of
economic power.

Second Plan was based on the Nehru-Mahalanobis model of development. Basic

strategy of this model can be summed up in following lines —

(a) Development through industrialisation.

(b) Industrialisation through basic and heavy industries.

(c) Development of basic and heavy industries through increasing role of the State
(Public Sector). Thus, State was assigned a big role in the Nehru-Mahalanobis
model of growth. This strategy was adopted in subsequent plans also.

Third Plan (1961–1966)

The approach to the Third Five Year Plan was similar to that used in the Second
Plan. The official plan document of the Third Plan does not bring out any explicit
attempt to use models such as those prepared by Mahalanobis.

The Third Plan aimed to give a more precise context to the social objectives of the
Constitution and largely contributed towards their realization. The aims of the
Third Plan were as follows:

i. To secure 5 to 6 per cent annual increase in national income so as to sustain that

rate of growth during the subsequent plan periods;
ii. To increase agricultural production, and achieve self sufficiency in foodgrains in
order to meet the needs of industry, exports and the growing population;

iii. To expand basic and key industries like steel, fuel, power and chemical
industries, and also to establish machine-building capacity so that the requirements
for further industrialisation could be met within a period of 10 years or thereabouts
largely from the country’s own resources;

iv. To utilise manpower resources of the country to the maximum extent and
ensure a substantial expansion of employment opportunities; and

v. To establish progressively greater equality in opportunity and bring about a

reduction in the disparities in income and wealth and a more even distribution of
economic power.

The difficulties encountered in the implementation of the Third Plan and the
inadequate rate of growth of the economy delayed the Fourth Plan by three years.

Plan Holidays (1966–1969)

Due to miserable failure of the Third Plan the government was forced to declare
"plan holidays" (from 1966–67, 1967–68, and 1968–69). Three annual plans were
drawn during this intervening period. During 1966–67 there was again the problem
of drought. Equal priority was given to agriculture, its allied activities, and
industrial sector. The government of India declared "Devaluation of Rupee" to
increase the exports of the country. The main reasons for plan holidays were the
war, lack of resources and increase in inflation.

Fourth Plan (1969–1974)

The Fourth Plan commenced in April, 1969. The Fourth Plan aimed at
accelerating the tempo of development in conditions of stability and reduced
uncertainties it proposed:

i. To step up the tempo of activity to an extent that would be compatible with

maintaining stability and progress towards self-reliance;

ii. To pay special attention to certain fields of productive activity, particularly

agriculture and related primary production which have been neglected;
iii. To chart the course of industrial activity so as to provide for future
technological advancement and at the same time to bring about spatial distribution
of industrial activity and enterprise;

iv. To help the very large number of small producers and increase immediate
employment and future employment potential;

v. To even out supplies of foodgrains and to establish prices through buffer stocks;

vi. To use monopoly legislation and appropriate fiscal policy for reducing
concentration of economic power; and

vii. To utilise Panchayati Raj institutions in local planning and in the gradual
building up of an integrated cooperative structure for establishing social and
economic democracy in the countryside.

Fifth Plan (1974–1979)

The Fifth Five-Year Plan laid stress on employment, poverty alleviation (Garibi
Hatao), 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. The Electricity Supply Act was amended 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. The twenty-point
programme was launched in 1975. It was followed from 1974 to 1979.

The Minimum Needs Programme (MNP) was introduced in the first year of the
Fifth Five Year Plan (1974–78). The objective of the programme is to provide
certain basic minimum needs and thereby improve the living standards of the
people. It is prepared and launched by D.P.Dhar.

The target growth rate was 4.4% and the actual growth rate was 4.8%.[6]

Rolling Plan (1978–1980)

The Janata Party government rejected the Fifth Five-Year Plan and introduced a
new Sixth Five-Year Plan (1978–1980). This plan was again rejected by the Indian
National Congress government in 1980 and a new Sixth Plan was made. The
Rolling Plan consisted of three kinds of plans that were proposed. The First Plan
was for the present year which comprised the annual budget and the Second was a
plan for a fixed number of years, which may be 3, 4 or 5 years. Plan number two
kept changing as per the requirements of the Indian economy. The Third Plan was
a perspective plan for long terms i.e. for 10, 15 or 20 years. Hence there was no
fixation of dates for the commencement and termination of the plan in the rolling
plans. The main advantage of the rolling plans was that they were flexible and
were 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 was that if the targets
were revised each year, it became difficult to achieve the targets laid down in the
five-year period and it turned out to be a complex plan. Also, the frequent revisions
resulted in the lack of stability in the economy.

Sixth Plan (1980–1985)

The Sixth Five-Year Plan marked the beginning of economic liberalisation. 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. The National Bank for Agriculture and Rural Development was
established for development of rural areas on 12 July 1982 by recommendation of
the Shivaraman Committee. Family planning was also expanded in order to
prevent overpopulation. In contrast to China's strict and binding one-child policy,
Indian policy did not rely on the threat of force[citation needed]. More prosperous areas
of India adopted family planning more rapidly than less prosperous areas, which
continued to have a high birth rate. Military Five Year Plans became coterminous
with Planning Commission's plans from this plan onwards.[8]

The Sixth Five-Year Plan was a great success to the Indian economy. The target
growth rate was 5.2% and the actual growth rate was 5.4%.[6] The only Five-Year
Plan which was done twice.[clarification needed]

Seventh Plan (1985–1990)

The Seventh Five-Year Plan was led by the Congress Party with Rajiv Gandhi as
the prime minister. The plan laid stress on improving the productivity level of
industries by upgrading of technology.

The main objectives of the Seventh Five-Year Plan were to establish growth in
areas of increasing economic productivity, production of food grains, and
generating employment through "Social Justice".

As an outcome of the Sixth Five-Year Plan, there had been steady growth in
agriculture, controls on the 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 Seventh Plan had strived towards socialism
and energy production at large. The thrust areas of the Seventh Five-Year Plan
were: social justice, removal of oppression of the weak, using modern technology,
agricultural development, anti-poverty programmes, full supply of food, clothing,
and shelter, increasing productivity of small- and large-scale farmers, and making
India an independent economy.

Based on a 15-year period of striving towards steady growth, the Seventh Plan was
focused on achieving the prerequisites of self-sustaining growth by the year 2000.
The plan expected the labour force to grow by 39 million people and employment
was expected to grow at the rate of 4% per year.

Some of the expected outcomes of the Seventh Five-Year Plan India are given
below:

• Balance of payments (estimates): Export –
330 billion (US$4.6 billion),

Imports – (-)
540 billion (US$7.5 billion), Trade Balance – (-)
210 billion
(US$2.9 billion)
• Merchandise exports (estimates):
606.53 billion (US$8.4 billion)
• Merchandise imports (estimates):
954.37 billion (US$13.3 billion)
• Projections for balance of payments: Export –
607 billion (US$8.4 billion),
Imports – (-)
954 billion (US$13.3 billion), Trade Balance- (-)
347 billion
(US$4.8 billion)

Under the Seventh Five-Year Plan, India strove to bring about a self-sustained
economy in the country with valuable contributions from voluntary agencies and
the general populace.

The target growth rate was 5.0% and the actual growth rate was 6.01%.[9] and the
growth rate of per capita income was 3.7%.

Annual Plans (1990–1992)

The Eighth Plan could not take off in 1990 due to the fast changing political
situation at the centre and the years 1990–91 and 1991–92 were treated as Annual
Plans. The Eighth Plan was finally formulated for the period 1992–1997.
Eighth Plan (1992–1997)
1989–91 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. In 1991,
India faced a crisis in foreign exchange (forex) 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 ninth 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 (later 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 liberalization, privatisation and globalization (LPG) 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. The major objectives included,
controlling population growth, poverty reduction, employment generation,
strengthening the infrastructure, institutional building, tourism management,
human resource development, involvement of Panchayati rajs, Nagar Palikas,
NGOs, decentralisation and people's participation.

Energy was given priority with 26.6% of the outlay.

The target growth rate was 5.6% and the actual growth rate was 6.8%.

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 investment 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.[10]

Ninth Plan (1997–2002)

The Ninth Five-Year Plan came after 50 years of Indian Independence. Atal Bihari
Vajpayee was the Prime Minister of India during the Ninth Five-Year Plan. The
Ninth Five-Year Plan tried primarily to use the latent and unexplored economic
potential of the country to promote economic and social growth. It offered strong
support to the social spheres of the country in an effort to achieve the complete
elimination of poverty. The satisfactory implementation of the Eighth Five-Year
Plan also ensured the states' ability to proceed on the path of faster development.
The Ninth Five-Year Plan also saw joint efforts from the public and the private
sectors in ensuring economic development of the country. In addition, the Ninth
Five-Year Plan saw contributions towards development from the general public as
well as governmental agencies in both the rural and urban areas of the country.
New implementation measures in the form of Special Action Plans (SAPs) were
evolved during the Ninth Five-Year Plan to fulfill targets within the stipulated time
with adequate resources. The SAPs covered the areas of social infrastructure,
agriculture, information technology and Water policy.

Budget
The Ninth Five-Year Plan had a total public sector plan outlay of
859,200 crore
(US$120 billion). The Ninth Five-Year Plan also saw a hike of 48% in terms of
plan expenditure and 33% in terms of the plan outlay in comparison to that of the
Eighth Five-Year Plan. In the total outlay, the share of the center was
approximately 57% while it was 43% for the states and the union territories.

The Ninth Five-Year Plan focused on the relationship between the rapid economic
growth and the quality of life for the people of the country. The prime focus of this
plan was to increase growth in the country with an emphasis on social justice and
equity. The Ninth Five-Year Plan placed considerable importance on combining
growth oriented policies with the mission of achieving the desired objective of
improving policies which would work towards the improvement of the poor in the
country. The Ninth Five-Year Plan also aimed at correcting the historical
inequalities which were still prevalent in the society.

Objectives
The main objective of the Ninth Five-Year Plan was to correct historical
inequalities and increase the economic growth in the country. Other aspects which
constituted the Ninth Five-Year Plan were:

• Population control.
• Generating employment by giving priority to agriculture and rural
development.
• Reduction of poverty.
• Ensuring proper availability of food and water for the poor.
• Availability of primary health care facilities and other basic necessities.
• Primary education to all children in the country.
• Empowering the socially disadvantaged classes like Scheduled castes,
Scheduled tribes and other backward classes.
• Developing self-reliance in terms of agriculture.
• Acceleration in the growth rate of the economy with the help of stable
prices.

Strategies
 • Structural transformations and developments in the Indian economy.
• New initiatives and initiation of corrective steps to meet the challenges in
the economy of the country.
• Efficient use of scarce resources to ensure rapid growth.
• Combination of public and private support to increase employment.
• Enhancing high rates of export to achieve self-reliance.
• Providing services like electricity, telecommunication, railways etc.
• Special plans to empower the socially disadvantaged classes of the country.
• Involvement and participation of Panchayati Raj institutions/bodies and
Nagar Palikas in the development process.

Performance
• The Ninth Five-Year Plan achieved a GDP growth rate of 5.4% against a
target of 6.5%
• The agriculture industry grew at a rate of 2.1% against the target of 4.2%
• The industrial growth in the country was 4.5% which was higher than that of
the target of 3%
• The service industry had a growth rate of 7.8%.
• An average annual growth rate of 6.7% was reached.

The Ninth Five-Year Plan looks through the past weaknesses in order to frame the
new measures for the overall socio-economic development of the country.
However, for a well-planned economy of any country, there should be a combined
participation of the governmental agencies along with the general population of
that nation. A combined effort of public, private, and all levels of government is
essential for ensuring the growth of India's economy.

The target growth was 7.1% and the actual growth was 6.8%.

Tenth Plan (2002–2007)

The Tenth Five Year Plan (2002-2007) aimed at an indicative target of 8% GDP
growth for the plan period. Since economic growth was not the only objective, the
plan aims at harnessing the benefits of growth to improve the quality of life of the
people by setting the following key objectives:

i. Reduction in poverty ratio;

ii. Providing gainful high quality employment to the additional labour force over
the tenth plan period;

iii. All children to be enrolled in schools and complete 5 years of schooling;

iv. Reduction of gender gaps in literacy and wage rates by at least 50%;

v. Reduction in decadal rate of population growth between 2001 and 2011 to

16.2%;

vi. Increase in literacy rate to 75% within the plan period;

vii. All villages to have sustained access to potable drinking water within the plan
period;

viii. Cleaning of major polluted rivers and other notified stretches;

ix. Reduction in Infant Mortality Rate (1MR) and Maternal Mortality Rate
(MMR);

x. Around Rs.800 billion of disinvestment over 5 years and increasing FDI inflows
annually to at least $7.5 billion; and

Increase in forest and tree cover to 33%. Main Strategies Adopted:

1. Disinvestment of PSUs.

2. Reform in taxes, labour laws and administrative system.

3. Adoption of private partnership in physical and social infrastructure.

4. Power sector reforms and removing all bottlenecks in energy, transport and
water infrastructures.

5. Controlling Union and State budget deficits.

6. Removing all legal bars to the growth of agricultural trade as well as agro,
small-scale and cottage industries.

7. Confidence in FDI that it would contribute to growth of industries.

8. Making the economy competitive with that of the rest of world.

Eleventh Plan (2007–2012)
Eleventh Plan was aimed “Towards Faster & More Inclusive Growth “after UPA
rode back to power on the plank of helping Aam Aadmi (common man). India had
emerged as one of the fastest growing economy by the end of the Tenth Plan. The
savings and investment rates had ncreased , industrial sector had responded well to
face competition in the global economy and foreign investors were keen to invest
in India. But the growth was not perceived as sufficiently inclusive for many
groups , specially SCs , STs & minorities as borne out by data on several
dimensions like poverty, malnutrition, mortality, current daily employment etc
.The broad vision for 11th Plan included several inter related components like
rapid growth reducing poverty & creating employment opportunities , access to
essential services in health & education, specially for the poor, extension if
employment opportunities using National Rural Employment Guarantee
Programme , environmental sustainability , reduction of gender inequality etc.
Accordingly various targets were laid down like reduction in unemployment( to
less than 5 % among educated youth ) & headcount ratio of poverty ( by 10 %),
reduction in drop out rates , gender gap in literacy , infant mortality , total fertility ,
malnutrition in age group of 0-3 ( to half its present level), improvement in sex
ratio, Forest & tree cover, air quality in major cities, , ensuring electricity
connection to all villages & BPL households (by 2009) & reliable power by end of
11th Plan , all weather road connection to habitations with population 1000&
above (500 in hilly areas) by 2009, connecting every village by telephone &
providing broad band connectivity to all villages by 2012 The Eleventh Plan
started well with the first year achieving a growth rate of 9.3 per cent, however the
growth decelerated to 6.7 per cent rate in 2008-09 following the global financial
crisis. The economy recovered substantially to register growth rates of 8.6 per cent
and 9.3 per cent in 2009-10 and 2010-11 respectively. However, the second bout of
global slowdown in 2011 due to the sovereign debt crisis in Europe coupled with
domestic factors such as tight monetary policy and supply side bottlenecks,
resulted in deceleration of growth to 6.2 per cent in 2011-12. Consequently, the
average annual growth rate of Gross Domestic Product (GDP) achieved during the
Eleventh Plan was 8 per cent, which was lower than the target but better than the
Tenth Plan achievement. Since the period saw two global crises -one in 2008 and
another in 2011 – the 8 per cent growth may be termed as satisfactory. The realised
GDP growth rate for the agriculture, industry and services sector during the 11th
Plan period is estimated at 3.7 per cent, 7.2 per cent and 9.7 per cent against the
growth target of 4 per cent, 10-11 per cent and 9-11 per cent respectively. The
Eleventh Plan set a target of 34.8 per cent for domestic savings and 36.7 per cent
for investment after experiencing a rising level of domestic savings as well as
investment and especially after emergence of structural break during the Tenth
Plan period. However, the domestic savings and investment averaged 33.5 per cent
and 36.1 per cent of GDP at market prices respectively in the Eleventh Plan which
is below the target but not very far. Based on the latest estimates of poverty
released by the Planning Commission, poverty in the country has declined by 1.5
percentage points per year between 2004-05 and 2009-10.The rate of decline
during the period 2004-05 to 2009-10 is twice the rate of declinewitnessed during
the period 1993-94 to 2004-05. Though the new poverty count based on Tendulkar
Formula has been subject of controversy, it is believed by the Committee that
whether we use the old method or the new , the decline in percentage of population
below poverty line is almost same. On the fiscal front , the expansionary measures
taken by the government to counter the effect fo global slowdown led to increase
in key indicators through 2009-10 with some moderation thereafter. The issue of
Price Stability remained resonating for more than half of the Plan period. Inability
to pass on burden on costlier imported oil prices might have constrained the supply
of investible funds in the government’s hand causing the 11th Plan to perform at
the levels below its target.

Twelfth Plan (2012–2017)

The Twelfth Five-Year Plan of the Government of India has been decided to
achieve a growth rate of 8.2% but the National Development Council (NDC) on 27
December 2012 approved a growth rate of 8% for the Twelfth Five-Year Plan.
With the deteriorating global situation, the Deputy Chairman of the Planning
Commission Montek Singh Ahluwalia has said that achieving an average 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 the plan at the National Development
Council meeting held in New Delhi.

"It is not possible to think of an average of 9% [in the 12th plan]. I think
somewhere between 8 and 8.5 percent is feasible,” Ahluwalia said on the sidelines
of a conference of State Planning Boards and departments. The approached paper
for the 12th Plan, approved last year, talked about an annual average growth rate of
9%. “When I say feasible... that will require major effort. If you don’t do that, there
is no God given right to grow at 8 percent. I think given that the world economy
deteriorated very sharply over the last year...the growth rate in the first year of the
12th Plan (2012–13) is 6.5 to 7 percent.” He also indicated that soon he should
share his views with other members of the Commission to choose a final number
(economic growth target) to put before the country’s NDC for its approval.

The government intends to reduce poverty by 10% during the 12th Five-Year Plan.
Ahluwalia said, “We aim to reduce poverty estimates by 9% annually on a
sustainable basis during the Plan period". Earlier, addressing a conference of State
Planning Boards and Planning departments, he said the rate of decline in poverty
doubled during the 11th Plan. The commission had said, while using the Tendulkar
poverty line, the rate of reduction in the five years between 2004–05 and 2009–10,
was about 1.5%points each year, which was twice that when compared to the
period between 1993–95 to 2004–05.[12] The plan aims towards the betterment of
the infrastructural projects of the nation avoiding all types of bottlenecks. The
document presented by the planning commission is aimed to attract private
investments of up to US$1 trillion in the infrastructural growth in the 12th five-
year plan, which will also ensure a reduction in the subsidy burden of the
government to 1.5 percent from 2 percent of the GDP (gross domestic product).
The UID (Unique Identification Number) will act as a platform for cash transfer of
the subsidies in the plan.

The objectives of the Twelfth Five-Year Plan were:

• To create 50 million new work opportunities in the non farm sector.

• To remove gender and social gap in school enrolment.
• To enhance access to higher education.
• To reduce malnutrition among children aged 0-3 years.
• To provide electricity to all villages.
• To ensure that 50% of the rural population have accesses to proper drinking
water.
• To increase green cover by 1 million hectare every year.
• To provide access to banking services to 90% of households.
 Introduction
Indian planning is an open process. Much of the controversy and the
debates that accompany the preparation of the plans are public. The initial
aggregate calculations and assumptions are either explicitly stated or readily
deducible, and the makers of the plans are not only sensitive but responsive to
criticism and suggestions from a wide variety of national and international sources.
From original formulation through successive modifications to parliamentary
presentation, plan making in India has evolved as a responsive democratic political
process and the culmination of the same in the final document is an impressive
manifestation of the workings of an open society. But by its very nature it also
generates many problems from the point of view of mapping an optimal strategy
for economic development Since 1951 India has completed 11 five year plans and
12th five year plan is about to finish in 2017. Each five year plan started from
April 1 of a particular and ended on March 31 of a particular year, so by
convention the five year plans take on 5 financial years. India’s First Five year plan
was launched on April 1, 1951. Three Annual Plans were launched between third
five year plan & fourth five year plan The fifth five year plan was launched by the
Indira Government but was abandoned one year before its scheduled end by the
Janta Alliance government. Instead of a regular plan, the Janta Government
introduced Rolling plan in 1978. This rolling plan was launched actually as 6th
plan from 1978 to 1983. but soon Janta Government was ousted from power and
incumbent Indira Government abandoned it and launched her own sixth plan in
1980. The Eighth five year plan started two years than the scheduled time because
India’s economy was in shambles during 1990-92.
From 1947 to 2017, the Indian economy was premised on the concept of planning.
This was carried through the Five-Year Plans, developed, executed, and monitored
by the Planning Commission (1951-2014) and the NITI Aayog (2015-2017). With
the prime minister as the ex-officio chairman, the commission has a nominated
deputy chairman, who holds the rank of a cabinet Minister. Montek Singh
Ahluwalia is the last deputy chairman of the commission (resigned on 26 May
2014). The Twelfth Plan completed its term in March 2017. Prior to the Fourth
Plan, the allocation of state resources was based on schematic patterns rather than a
transparent and objective mechanism, which led to the adoption of the Gadgil
formula in 1969. Revised versions of the formula have been used since then to
determine the allocation of central assistance for state plans. The new government
led by Narendra Modi, elected in 2014, has announced the dissolution of the
Planning Commission, and its replacement by a think tank called the NITI Aayog
(an acronym for National Institution for Transforming India).
 CONCLUSION
Every five year plan is developed with a specific goal in mind. But there is never
one solitary objective of the plan. The plan is supposed to work towards the
perspective plan and must cover a few important objectives. However, it is not
possible or practical to give equal importance to all aspects of a plan.There are
basically five generalized goals of a five year plan, wherein a particular plan one or
two are given the most importance. In fact, some of the goals are actually
conflicting. So let us now look at these five types of goals we cover in the five year
plans. Growth :This is the first and the most basic goal of an economic plan.
Growth in terms of an economy focuses on the increase of the Gross Domestic
Product (GDP) of the country. GDP is a way to measure the growth of an
economy. Higher the GDP more the common public can benefit from the economic
policies of the country.This economic growth actually happens due to an increase
in the production capacity of a nation for either its goods or its services. This can
be due to an influx of capital into the economy as well. The sector in which the
growth is happening is also important. There are three basic sectors – agricultural,
industrial and service. Their respective contributions make up the structural
composition of the GDP.For very many years India’s primary focus was the
agricultural sector. It was the main contributor to our GDP. And it also saw the
highest growth rate in the few initial five year plans.Modernisation :
Modernisation refers to the integration of technology in the economy. Innovation,
inventions, and advancement in technology play a huge part in upgrading our
economy and increasing its output. One example would be the introduction of
modern agricultural techniques which increased output. Over the years, the Indian
economy also saw a major boom in the IT industry due to modernization.Another
aspect of modernization would be our advancement as a society. Leaving behind
discriminatory practices and pushing towards an equal, fair and modern
society.Self Reliance ;A new economy like India’s post-independence can become
too reliant on imports. So for seven editions of the five year plan, the government
promoted self-reliance. This basically meant that anything we were capable of
producing domestically we did not import.Especially food and agricultural
products were never imported as long as possible. This was to ensure we not only
became self-reliant but also to protect our sovereignty. Because importing basic
essentials from other nations would make us dependent on them. Then after 1991,
the government finally opened up our economy to the global markets once we had
already established a domestic base.Equity :Now the previous three goals mainly
relate to the economy. But the development of the economy only is not sufficient.
The five year plans must also focus on the development of our society. It is
essential to ensure that these benefits from the economy are enjoyed by all
members of the society. This is where equity comes in.Equity focuses on ensuring
that all citizens of our country have their basic needs for food, housing, clothing
etc fulfilled. It also looks to reduce the wealth gap and the inequality in our society.
 BIBLIOGRAPHY
• Annual Report 2012-13 of the Planning Commission of India .
• Twelfth Five Year Plan (2012-17) – Faster, More Inclusive & Sustainable
Growth Vol I , Planning Commission of India & website of Planning
Commission of India
• Planning in India, Richard S Eckaus , Massachusetts Institute Of
Technology.
• Indian Economy , Ruddar Datt & KPM Sundharam.
• Eleventh Five Year Plan and Inclusive Growth – a review by Ruddar Datt.