Economic Planning is a term used to describe the long term plans of government to co-ordinate and develop the economy with efficient use of resources. Economic planning in India was stared in 1950 after independence, it was deemed necessary for economic development and growth of the nation.
The idea of Five year planning was taken from the erstwhile Soviet Union under socialist influence of first Prime Minister Jawahar lal Nehru.
Long term objectives of our Five Year Plans are:
- A high rate of growth to improve the standard of living of residents.
- Economic self-reliance.
- Social justice and reduction of inequalities.
- Modernization of the economy.
- Economic stability for prosperity.
An overview of all plans implemented in India is given below. The first eight plans had their emphasis on growing the public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, attention has shifted towards making government a facilitator in growth.
|First Five year Plan (1951- 56)||Rehabilitation of refugees, rapid agricultural development to achieve food self-sufficiency in the shortest possible time and control of inflation.||Targets and objectives more or less achieved. With active role of state in all economic sectors.Five Indian Institutes of Technology (IITs) were started as major technical institutions.|
|Second Five year Plan (1956-61)||Nehru-Mahalanobis model was adopted.‘Rapid industrialisation with particular emphasis on the development of basic and heavy industries’Industrial Policy of 1956 accepted the establishment of a socialistic pattern of society as the goal of economic policy.||Could not be implemented fully due to shortage of foreign exchange. Targets had to be pruned. Yet, Hydroelectric power projects and five steel mills at Bhilai, Durgapur, and Rourkela were established.|
|Third Five year Plan (1961-66)||‘establishment of a self-reliant and self-generating economy’||Failure. Wars and droughts. Yet, Panchayat elections were started.• State electricity boards and state secondary education boards were formed.|
|Annual Plan ( 1966-69)||crisis in agriculture and serious food shortage required attention||A new agricultural strategy was implemented. It involved distribution of high-yielding varieties of seeds, extensive use of fertilizers, exploitation of irrigation potential and soil conservation measures.|
|Fourth Five year Plan (1969-74)||‘growth with stability’ and progressive achievement of self-reliance’Garibi HataoTarget: 5.5 pc||Was ambitious. Big failure. Achieved growth of 3.5 percent but was marred by Inflation.The Indira Gandhi government nationalized 14 major Indian banks and the Green Revolution in India advanced agriculture.|
|Fifth Five year Plan (1974-79)||‘removal of poverty and attainment of self-reliance’||High inflation. Was terminated by the Janta govt. Yet, the Indian national highway system was introduced for the first time.|
|Sixth Five year Plan(1980-85)||‘direct attack on the problem of poverty by creating conditions of an expanding economy’||Most targets achieved. Growth: 5.5 pc.Family planning was also expanded in order to prevent overpopulation.|
|Seventh Five year Plan (1985-1990)||Emphasis on policies and programmes that would accelerate the growth in foodgrains production, increase employment opportunities and raise productivity||With growth rate of 6 pc, this plan was proved successful in spite of severe drought conditions for first three years consecutively. This plan introduced programs like Jawahar Rozgar Yojana.|
|Annual Plans (1989-91)||No plan due to political uncertainities||It was the beginning of privatization and liberalization in India.|
|Eighth Five year Plan (1992-97)||Rapid economic growth, high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit. to undertake an annual average growth of 5.6%||Partly success.An average annual growth rate of 6.78% against the target 5.6% was achieved.|
|Ninth Five year Plan (1997-2002)||Quality of life, generation of productive employment, regional balance and self-reliance.Growth with social justice and equality. growth target 6.5%||It achieved a GDP growth rate of 5.4%, lower than target. Yet, industrial growth was 4.5% which was higher than targeted 3%. The service industry had a growth rate of 7.8%. An average annual growth rate of 6.7% was reached.|
|Tenth Five year Plan (2002 – 2007)||To achieve 8% GDP growth rate,Reduction of poverty by 5 points and increase the literacy rate in the country.||It was successful in reducing poverty ratio by 5%, increasing forest cover to 25%, increasing literacy rates to 75 % and the economic growth of the country over 8%.|
|Eleventh Five year Plan(2007 – 2012)|| Rapid and inclusive growth.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% resp.Provide clean drinking water for all by 2009.
India has recorded an average annual economic growth rate of 8%, farm sector grew at an average rate of 3.7% as against 4% targeted. Industry grew with annual average growth of 7.2% against 10% targeted.
|Twelfth Five year Plan(2012-2017)|| “faster, sustainable and more inclusive growth”.proposes a growth target of 8 percent.Raising agriculture output to 4 per cent.Manufacturing sector growth to 10 %|
Target of adding over 88,000 MW of power generation capacity.
Prime Minister Narendra Modi has announced abolition of Planning Commissionon the Independence Day.It is to be replaced by a more relevant institution.The planning body lost its relevance after LPG reforms of 1990s. With the an end of the licence raj, it functioned only as an advisory body without any effective power. The future of economic planning in India will be different and better from its past, we remain optimistic.