Economic Planning In India

(With special reference to the five year plans)

Group No 5 Rachit Shukla(124) Farhan Khan(36) Vivek Agarwal(62) John Pullack(136) Nikhil Gupta(136) Rajan Samrat(126)

Flow of the Presentation

What is Economic Planning? Why Economic Planning? Who does it? Five Year Plans in India 11th five year plan in India Industry Specific Details of the funds spend till date Failure in Economic Planning

What is Economic Planning?

Economic Planning is defined as conceiving, initiating, regulating and controlling economic activities by the State according to the set priorities in an attempt to achieve social or economic outcomes within a given time.

Priorities Resources Time

Economic Planning

Why Economic Planning?

Efficient utilization of resources Market imperfections and price distortions Maximisation of National Income Full Employment Equitable distribution of income Price Stability Larger savings and investment Social Justice

Who Does It?

National Development Council Planning Commission

Planning Commission
Setup on March 15, 1950 Assessment of material, capital and human resources of the country. Formulation of plans for the most effective and balanced utilization of countrys resources. To determine the various stages of planning and to propose the allocation of resources on the priority basis. To act as an advisory body to the Union Government. To evaluate from time to time the progress achieved in every stage of the plan and also to suggest remedial measures. To advise the Centre and the State Governments from time to time on special matters referred to the Commission.

National Development Council

It was set up on August 6, 1952. The PM is the ex officio chairman of NDC All the plans made by the Planning Commission have to be approved by National Development Council first To prescribe guidelines for the formulation of the National Plan as well as for the assessment of resources for the Plan. To consider the National Plan as formulated by the Planning Commission and endorse its development strategy. To consider important questions of social and economic policy affecting the countrys development To periodically review the working of the Plan and to recommend such measures as are necessary for achieving the aims and targets set out in the National Plan.

Five Year Plans in India

The First Five Year Plan (1951-56): Target of GDP growth - 2.1% per year. Actual growth of GDP had been 3.6% per year. Projects related to irrigation-the Mettur Dam, Bhakra Dam, and Hirakud Dam. Rehabilitation of landless agricultural workers Emphasis on agriculture and rehabilitation of refugees Improvement of roads, civil aviation, railways, telegraphs, and posts. The Second Five Year Plan (1956-61): Economy reached a stage where agriculture can be assigned lower priority Forward thrust given for the development of heavy and basic industries Big push so that economy takes off Industrial policy 1956 announced Rapid industrialization- emphasis on development of heavy and basic industries- iron and steel, heavy chemicals, heavy engineering and machine building Plan was moderately successful

Five Year Plans in India

The Third Five Year Plan (1961-66): Aimed at the establishment of a self reliant and self generating economy. High priority was assigned to the agricultural sector and development of heavy industries. However, the approach had to be shifted to defense due to conflicts with China (1962) and Pakistan(1965). The construction of dams continued. Many cement and fertilizer plants were also built. Punjab began producing an abundance of wheat. The target growth rate of GDP and achieved was 4.5% and 4.3% respectively.

The Fourth Five Year Plan (1969-74): Aimed at annual growth rate of 5.5 % Self reliance and provide a national minimum First 2 yrs were good then it failed Failure of monsoons, decline in food grain production, decline in industrial production, rise in prices and then Indo Pak war in 1972 Able to achieve only 3.4% GNP growth against target of 5.5% A failed plan

Five Year Plans in India

The Fifth Five Year Plan (1961-66): Stress was laid on employment, poverty alleviation, and justice Sectors such as food, oil, and fertilizers prices sky-rocketed. Attaining self-reliance in food and energy top priority. The plan also focused on self-reliance in agricultural production and defenceFood grain production above 118 million tons The Indian national highway system was introduced accommodate the increasing traffic. Tourism also expanded. Indian exports crossed 18%, and the large earnings from exports The Sixth Five Year Plan (1980-1985): At the onset Rajiv Gandhi, prioritized speedy industrial development, special emphasis on information technology sector. From the Fifth Five Year Plan, the nation had self sufficiency in food. Industrial sector was diversified, science and technology made a significant advance. Programs on improvement of public health and epidemic control to reduce infant mortality and increase life expectancy. Investments in Indian healthcare sector. Promote education Broadly the plan a success - achieved average growth rate of 5.5%

Five Year Plans in India

The Seventh Five Year Plan (1985-1990): The Seventh Plan marked the comeback of the Congress Party to power Making India an Independent Economy Social Justice Removal of oppression of the weak Using modern technology Agricultural development Anti-poverty programs Full supply of food, clothing, and shelter Increasing productivity of small and large scale farmers Period between 1989-91 Political 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 Forex reserves, left with reserves of only about US$1 billion. Thus, under pressure, the country took the risk of reforming the socialist economy Dr. Manmohan Singh 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.

Five Year Plans in India

The Eight Five Year Plan (1992-1997): Modernization of industries was a major highlight of the Eighth Plan Severe economic crisis due to balance of payment crisis Correction of the burgeoning deficit and foreign debt This plan can be termed as Rao and Manmohan model of Economic development The major objectives included, containing population growth, poverty reduction, employment generation, strengthening the infrastructure, Institutional building, tourism management, Human Resource development, Involvement of Panchayat raj, Nagarapalikas, N.G.O'S and Decentralisation and people's participation Fiscal reforms were initiated Energy was given priority with 26.6% of the outlay An average annual growth rate of 6.7% against the target 5.6% was achieved

Five Year Plans in India

Ninth Five Year Plan (1997-2002) Focus was on growth with social justice Priority to agriculture and rural development Eradication of poverty GDP growth of 6.5 % per annum Achieved only 5.35% GDP growth rate Tenth plan (2002-2007): Target of GDP growth, 2002-7: 8 % Reduction of poverty ratio by 5 % by 2007 and by 15% by 2012 Gainful employment to the addition to labor force over the Tenth Plan Universal access to primary education by 2007 Reduction in decadal rate of population growth between 2001 and 2011 to 16.2% Increase in literacy to 75% by 2007 Reduction of infant mortality rate to 45 per 1000 live births by 2007 and to 28 by 2012 Reduction of maternal mortality ratio to 2 per 1000 live births by 2007 and to 1 by 2012 Increase in forest & tree cover to 25% by 2007 and 33% by 2012 All villages - access to potable drinking water by 2012 Cleaning all major polluted rivers by 2007 & other notified stretches by 2012

11th Five Year Plan

Prime Minister Manmohan Singh termed as Indias Educational Plan. Cleared on 9th November 2007. Aimed at 9% growth rate. Highest priority to agriculture, education and health. Total outlay of the plan ` 36,44,718 crore of which budgetary support will be ` 14,21,711 crore. Agriculture growth at 4% per year.

11th Five Year Plan

11th Five Year Plan

Income & Poverty
Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016-17 Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits Create 70 million new work opportunities. Reduce educated unemployment to below 5%. Raise real wage rate of unskilled workers by 20 percent. Reduce the headcount ratio of consumption poverty by 10 percentage points.

Education
Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12 Develop minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality Increase literacy rate for persons of age 7 years or above to 85% Lower gender gap in literacy to 10 percentage point Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the plan

11th Five Year Plan

Health
Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births Reduce Total Fertility Rate to 2.1 Provide clean drinking water for all by 2009 and ensure that there are no slipbacks Reduce malnutrition among children of age group 0-3 to half its present level Reduce anaemia among women and girls by 50% by the end of the plan

Women and Children

Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17 Ensure that at least 33 percent of the direct and indirect beneficiaries of all government schemes are women and girl children Ensure that all children enjoy a safe childhood, without any compulsion to work

11th Five Year Plan

Infrastructure
Ensure electricity connection to all villages and BPL households by 2009 and round-the-clock power. Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015 Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012 Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016-17

Environment
Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12. Treat all urban waste water by 2011-12 to clean river waters. Increase energy efficiency by 20 percentage points by 2016-17.

Achievement in the education sector in 11th plan ( till 31.12.2009)

Activity Targets for 11th Plan Achievements during the first 3 years

Opening of Primary Schools Opening of Upper Primary Schools Construction of Additional Classrooms
Drinking Water Facilities Toilet Facilities Teachers sanctioned

20000
70000 887000

29850
49920 631360

68000 204000 818831

26209 83641 181949

Expenditure of the 11th Plan in Health Sector

Expenditure of the 11th Plan in Rural Development

Expenditure of the 11th Plan in Infrastructure Development

Expenditure of the 11th Plan in Science and Technology

Failures in Planning
Inefficiency of production in many public sector companies Inefficiency in the generation of power, fertilizers. Inability to carry out effective land reforms, still traditional methods of agriculture in so many areas Inability to bridge economic disparity Failure to check growth of black money

Thank You !!