FIVE YEAR PLANS IN INDIA

“Economic planning means utilisation of country’s

resources in different development activities in
accordance with national
priorities”
After India achieved independence, a formal model of planning was
adopted, and accordingly the Planning Commission, reporting directly to
the Prime Minister of India, was established on 15 March 1950, with Prime
Minister Jawaharlal Nehru as the Chairman. Authority for creation of the
Planning Commission was not derived from the Constitution of India or
statute; it is an arm of the Central Government of India.

The first Five-Year Plan was launched in 1951, focusing mainly on

Development of the agricultural sector.

In 2014, Narendra Modi government decided to wind down the Planning

Commission. It was replaced by the newly formed NITI Aayog in February
2015.

NITI - National Institution for Transforming India.

Prasanta Chandra Mahalanobis (29 June 1893 – 28 June 1972)
was an Indian scientist and statistician. He is best remembered
for
the Mahalanobis distance, a statistical measure, and for being
on of
the members of the first Planning Commission of free India.
Directive Planning and Comprehensive
Planning
Directive planning is a planning in which
Forces of market, i.e demand and supply are
Only directed by the state. In such planning,
there is free play of market forces.

Comprehensive planning is a planning in

which equal importance is given to both
economic and social sectors.
GOALS OF FIVE YEAR PLAN IN INDIA
3.SELF - SUFFICIENCY
5.FULL EMPLOYMENT
Gross domestic product (GDP) growth rate
measures how fast the economy is growing. It
does this by comparing a quarter of the
country's gross domestic product to the
previous quarter. GDP measures the economic
output of a nation.

Modernization refers to a model of a

progressive transition from a 'pre-modern' or
'traditional' to a 'modern' society.
Self-sufficiency is the ability of individuals and
families to maintain sufficient income to
consistently meet their basic needs – including
food, housing, utilities, health care,
transportation, taxes, dependent care, and
clothing – with no or minimal financial
assistance or subsidies from private or public.
Equity is the concept or idea of fairness in
economics, particularly in regard to taxation
or welfare economics. More specifically, it
may refer to equal life chances regardless of
identity, to provide all citizens with a basic
and equal minimum of income, goods, and
services or to increase funds and commitment
for redistribution.
Full employment is a situation in which everyone
who wants a job can have work hours they
need on fair wages. Because people switch
jobs, full employment involves a positive
stable rate of unemployment.
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.
Second Plan (1956–1961)
The Second Plan focused on the development of
the public sector and "rapid Industrialisation".
The plan 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.
Third Plan (1961–1966)
The Third Five-year Plan stressed 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 and the
Indian Army. In 1965–1966, India fought a
War with Pakistan. There was also a severe
drought in 1965. The war led to inflation and
the priority was shifted to price stabilisation.
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)
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 Indo-Pakistan War of 1971 and
Bangladesh Liberation War took funds
earmarked for industrial development.
Fifth Plan (1974–1978)
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.
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. The Second Plan
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.
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 Developm
ent
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.
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".
Annual Plans (1990–1992)
The Eighth Plan could not take off in 1990 due
to the fast changing economic situation at the
centre and the years 1990–91 and 1991–92
were treated as Annual Plans.
Eighth Plan (1992–1997)
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.
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 Plan. The Ninth
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.
Tenth Plan (2002–2007)
 The main objectives of the Tenth Five-Year Plan:
 Attain 8% GDP growth per year.
 Reduction of poverty rate by 5% by 2007.
 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.
 20-point program was introduced.
 Target growth: 8.1% – growth achieved: 7.7%.
 The Tenth Plan was expected to follow a regional
approach rather than sectoral approach to bring
down regional inequalities.
Eleventh Plan (2007–2012)
 It was in the period of Manmohan Singh as a prime
minister.
 It aimed to increase the enrolment in higher education of
18–23 years of age group by 2011–12.
 It focused on distant education, convergence of formal,
non-formal, distant and IT education institutions.
 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.
 Environmental sustainability.
 To increase the growth rate in agriculture, industry and
services to 4%, 10% and 9% respectively.
 Reduce total fertility rate to 2.1.
 Provide clean drinking water for all by 2009.
 Increase agriculture growth to 4%.
Twelfth Plan (2012–2017)
 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.
ECONOMIC POLICY UNDER PLANNING TILL 1991
>Heavy reliance on Public sector
>Regulated development of Private sector
>Protection of Small – scale industry and
regulation of Large – scale industry
>Development of Heavy industry of strategic
significance
>Focus on Saving and Investment
>Protection from Foreign Competition
>Focus on Import substitution
>Restriction on Foreign capital
>Centralised planning
SUCCESS AND FAILURES OF FIVE YEAR PLANS IN INDIA

SUCCESS FAILURES
Increase in National Income Abject poverty
Increase in Per Capita Income
Rise in Savings and Investment High rate of Inflation
Institutional and Technical change
in Agriculture Unemployment crises
Growth and diversification of
Industry Inadequate Infrastructure
Infrastructural development
Improvement in health Skewed distribution
Increase in employment
opportunities
Increase in foreign trade