Is Planning relevant in

Indian context today?

What is Plan?

Define Plan
Spells out how the resources of a
nation should be put to use.
Has some general goals as well as
specific objectives, which are to be
achieved within a specified period of
time.
Unrealistic to expect all the goals of a
plan to be given equal importance in
all the plans.

History of Plans
Borrowed the concept of five-year plans
from the former soviet union, the pioneer
in national planning
Jawaharlal Nehru was impressed with the
remarkable successes in industrialization
achieved by the USSR in their initial five
year plans
India has an extensive network setup to
formulate 5-year plans under the
supervision of the planning commission

Why to Plan
After independence, was in dire conditions
and needed to start acting soon
Some of the problems necessitated need for
an immediate plan:
Vicious circle of poverty
Foreign Trade
Need for Rapid industrialization
Population pressure
Development of Natural resources
Backward Population
Capital Deficiency
Market imperfections

Objectives of Planning
Central objective - raise the standard of
living of the people
To increase per capita and NI
Higher level of employment
Growth with social justice
Increasing industrial output
To remove bottlenecks in agriculture,
manufacturing industry
Reduction of inequality in income
Modernization
Self- reliance

Stages in Planning
Formulation- by planning commission. In
this stage, planning commission prepares
draft that goes to National development
council. The council then endorse the
draft, and it is forwarded to Parliament.
Adoption- By Parliament
ApprovalAfter
the
approval
of
Parliament only, the draft becomes the
planned document.
Execution-By executive
Supervision- By Officials

Pre-conditions of Planning
Collection of Statistical Data- If at
collection stage data is incorrect or
irrelevant or collected half heartedly then
economic planning wont be effective at all.
Economic Organization
Government Setup
Public Cooperation- Citizen must provide
every information so that government can
formulate policies for their betterment.

Characteristics of Planning
Major economic decisions are
determined by a central authority,
through the planning commission.
The government will have the powers
of implementation.
The planners fix the targets for the
sectors and also decide how much
investment must be made in each
sector to achieve the targets.

Planning and its Impact

Planning Organization & its

Divisions

Prime minister is the chairman of the planning

commission
The planning commission functions through
several divisions, each headed by a senior
officer.
Works under the overall guidance of the
national development council.
Deputy chairman and the full time members of
the commission provide advice and guidance
to the subject divisions

Planning Commission
Divisions
Planning Areas is divided under the
following sectors:
Agriculture
Infrastructure
Social Sector
Other sectors/ Areas

Five year Plan overview

First plan (1951-1956)

Plan primarily addressed the agrarian sector

Including investments in dams and irrigation
Total plan budget of 206.8 billion INR was allocated to seven
broad areas:
o
o
o
o
o
o
o

Irrigation and energy (27.2 percent)

Agriculture and community development (17.4 percent)
Transport and communications (24 percent)
Industry (8.4 percent)
Social services (16.64 percent)
Land rehabilitation (4.1 percent), and
Other (2.5 percent)

Target 2.1% annual GDP growth, achieved 3.6 % ; per capita

income up by 8%
The Bhakra dam and Hirakud dam projects initiated
Contracts signed to start 5 major steel plants
UGC set up; plans to set up IITs initiated

Second plan (1956-1961)

Focused on industry, especially heavy industry
Development of the public sector
Advocated huge imports, which led to
emptying of funds leading to foreign loans
5 steel mills established, coal production
increased
Initiated license raj
Price level increased by 30%

Third plan (1961-1966)

Stressed on agriculture and improving production of rice
Panchayat elections were started and the states were given
more development responsibilities
Higher stress on grass-root level education
Increased focus on cement and fertilizer plants
Sino-Indian War in 1962 exposed weaknesses in the economy
and shifted the focus towards defence
War-time policies led to inflation and the priority was shifted to
price stabilisation
Increased foreign aid needed to maintain development
expenditures eventually provided 28 percent of public
development spending

Fourth plan (1969-1974)

Nationalised 14 major Indian banks and the Green
Revolution in India advanced agriculture
Spending on war efforts reduced industrial
spending
Poor monsoon and influx of refugees form
Bangladesh
Projected national income growth at 5.7 percent/
yr; realized rate - 3.3 percent
Focus on sorting short-term problems; No long
term focus in plan

Fifth plan (1974-1979)

Stress on employment, poverty alleviation, and justice
Also focused on self-reliance in agricultural production
and defence
Rapidly changing oil prices in 1973 forced series of
revision during formulation of plan
Turmoil in world economic situation caused high inflation
in prices of energy, fertilizers and food sector
Terminated in 1978 by the newly elected Morarji Desai
govt
Janta govts 5-yr plan was terminated in 1980 by next
Congress govt.

Sixth plan (1980-1985)

Aimed for rapid industrial development, especially in the
area of information technology
Marked the beginning of economic liberalization
Price controls were eliminated and ration shops were
closed - led to an increase in food prices and an
increased cost of living
Family planning concept introduced but not forcibly
Planned GDP growth - 5.1 percent a year, achieved 5.4
percent
Political constraints limited effectiveness of industrial
growth policies

Seventh plan (1985-1989)

Establish growth in the areas of increasing economic
productivity, production of food grains, and generating
employment opportunities
Stress on improving the productivity level of industries by
upgradation of technology
Long-term steady growth plan: focused on achieving the
pre-requisites of self-sustaining growth by the year 2000
Economy recorded 6% growth rate against the targeted 5%
1989-91 was a period of political instability in India and
hence no five year plan was implemented
In 1991, India faced a crisis in foreign exchange(Forex)
reserves

Eighth plan (1992-1997)

Gradual opening of the Indian economy to reduce
the high deficit and foreign debt
Energy was given priority with 26.6% of the outlay
Avg annual growth rate of 6.7% against the target
5.6%
major objectives included containing population
growth, poverty reduction, employment
generation, strengthening the infrastructure,
Institutional building, Human Resource
development, Involvement of Panchayat raj

Ninth Plan (1997 - 2002)

Developed in the context of four important
dimensions: Quality of life, generation of
productive employment, regional balance and
self-reliance
1998 Nuclear test and subsequent sanctions
imposed affected Ex-Im but developed domestic
capabilities
Services sector showed higher growth
Growth rate was 5.35 per cent, against the target
GDP growth of 6.5 per cent

Tenth plan (2002-2007)

Reduction of poverty ratio to 20% by 2007 and to 10% by
2012
Providing gainful high quality employment to the addition
to the labour force over the tenth plan period
Universal access to primary education by 2007
Reduction in gender gaps in literacy and wage rates by
atleast 50% by 2007
Reduction in decadal rate of population growth between
2001 and 2011 to 16.2%
Increase in literacy rate to 72% within the plan period and
to 80% by 2012.
Reduction of Infant Mortality Rate (IMR) to 45 per 1000
live births by 2007 and to 28 by 2012
All villages to have sustained access to potable drinking
water by 2012

Eleventh plan (2007-2012)

Accelerate GDP growth from 8% to 10% and
then maintain at 10% in the 12th Plan in
order to double per capita income by 201617
To reduce the poverty by 10% and generate
7cr new employment opportunities

Analysis

 Planning outlines have been greatly

influenced by leaning of government at
centre
Accountability and target ownership is not
present
Some hold belief that the Industrial
development here has not been because
of, rather inspite of government efforts.

Deficiencies of Planning - 1
A minimum standard of living could have
been ensured for all if resources had been
thought of, not in money term, but in terms
of people
In spite of enormous advancement in
industrialization there has been no change
in the occupational pattern of the countrys
work force
So long the emphasis was on financial
rather than physical targets
Government policy has aggravated
inequality in the distribution of wealth

Deficiencies of Planning - 2
The conceptual or logical content of
planning is concerned there is not much
wrong; the wrong lie is its in
implementation, its lack of cohesion with
social factors and the impediments imposed
by political, social, administrative and
cultural forces rather then strictly economic
factors.
We have also failed to create self-reliance.
The tenancy reforms have not been
complete and insecurity of tenure has been
much more pronounced.

Deficiencies of Planning - 3
The economy has faced an-uninterrupted
inflationary process. Eroded purchasing
power of the people-increased project cost,
and reduced the competitiveness of the
economy.
The resources allocation pattern does not
show any consistent trend. Various aspects of
social sector has been neglected.
The growth rate in the plan period in most
cases has not been satisfactory. They have
not helped to remove poverty and
unemployment.

Deficiencies of Planning - 3
The economy has faced an-uninterrupted
inflationary process. Eroded purchasing
power of the people-increased project cost,
and reduced the competitiveness of the
economy.
The resources allocation pattern does not
show any consistent trend. Various aspects of
social sector has been neglected.
The growth rate in the plan period in most
cases has not been satisfactory. They have
not helped to remove poverty and
unemployment.

Conclusion

YES, because... - 1
Because of excellent economic planning
now we are one of the parts of
developing countries.
Five year duration chosen gives planning
commission ample time to review the
effects or ineffectiveness of the plans
Planning has also evolved over the years
with plans becoming more and more
inclusive and broadening their scope.
Because of liberalization the rate Foreign
Direct Investment increased after 1991

YES, because... - 2
India has been blessed with good
planners with a very impartial outlook
development.
After introduced 1991 policy the
growth of India became very faster
We were brought out of out slumber by
the crisis of 1991 and subsequent
pressure from World bank.
We need to back our lofty plans with
equally high Implementation plans.

Thank You!!