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Planned economy is one in which the state owns (partly or wholly)


and directs the economy. While such a role is assumed by the State in
almost every economy, in planned economies, it is pronounced: for
example in communist and socialist countries- former USSR and
China till the 1970s. In such a case a planned economy is referred to
as command economy or centrally planned economy or command
and control economy.

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Planning has the following long term goals

Growth
Modernization
self-reliance and
social justice

Economic growth is the increase in value of the goods and services


produced by an economy.
Economic development refers to growth
redistributive aspects and social justice.

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that

includes

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Modernization is improvement in technology. It is driven by


innovation and investment in R & D. Education is the foundation of
modernization.
Self-reliance means relying on the resources of the country and not
depending on other countries and the MNCs for investment and
growth.
The term self-reliance should not be confused with self-sufficiency
the former means depending on resources of the country and
avoid dependence on external flows; the latter means that the
country has all the resources it needs.
Social justice means inclusive and equitable growth where
inequalities are not steep and benefits of growth reach all- ruralurban, man-woman; caste divide and inter-regional divides are
reduced.

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First Plan (1951-56)


The First Plan stressed more on agriculture, in view of large scale
import of food grains and inflationary pressures on the economy.
Other areas of emphasis were power and transport.

Second Plan (1956-61)


With agricultural targets of previous plan achieved, major stress
was on the establishment of heavy industries.

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Third Plan (1961-66)


It tried to balance industry and agriculture. The aim of Third Plan
was to establish a self sustaining economy. For the first lime, India
resorted to borrowing from IMF, Rupee was also devalued for the
first time in 1966.

Annual Plans
As the Third Plan experienced difficulties on the external front
(war with China in 1962 and Pakistan in 1965); and the economic
troubles mounted on the domestic front- inflation, floods, forex
crisis- the Fourth Plan could not be started from 1966. There were
three annual plans till 1969.

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Fourth Plan (1969-74)


The main objective of this Plan was growth with stability. The Plan
laid special emphasis on improving the condition of the underprivileged and weaker sections through provision of education and
employment.

Fifth Plan (1974-79)


The main objective of the Plan was Growth for Social Justice.

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Sixth Plan (1980-1985)


Removal of poverty was the foremost objective of Sixth Plan.

Seventh Plan (1985-90)


This Plan stressed on rapid growth in food-grains production and
increase in employment opportunities.

Eighth Plan (1992-1997)


This Plan was formulated keeping in view the process of economic
reforms and restructuring of the economy.

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Ninth Five Year Plan (1997-2002)


The salient features of the Ninth Five Year Plan are a target annual
average growth rate of 6.5 per cent for the economy as a whole,
and a growth rate of 3.9 per cent for agriculture sector, among
others.

Tenth Five Year Plan (2002-2007)


The economy was expected to grow at the rate of 8 %

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11th Five Year Plan (2007-2012)


Government set an average annual growth target of 9 per cent for
the 11th Plan beginning with 8.5 per cent in the first year and
closing with 10 per cent in 2011-1

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The twelfth plan has the following objectives:

Basic objective: Faster, More inclusive, and Sustainable growth


Is 10% growth feasible? Realistically, even 9% will need strong
policy action. Could aim at 9.0 to 9.5 percent

Energy, Water and Environment present major sectoral challenges.


Can we address them without sacrificing growth?

Can we find resources to create a world class infrastructure?

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For growth to be more inclusive we need:

Better performance in agri-culture


Faster creation of jobs, especially in manufacturing
Stronger efforts at health, education and skill development
Improve effectiveness of programs directly aimed at the poor
Special programs for socially vulnerable groups
Special plans for disadvantaged/backward regions

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The standard definition of a recession is a decline in the Gross


Domestic Product (GDP) for two or more consecutive quarters.

A depression is any economic downturn where real GDP declines by


more than 10 percent. A recession is an economic downturn that is
less severe.

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2009
Q. Consider the following statements regarding Indian Planning:
1. the Second Five-Year Plan emphasized on the establishment of heavy
industries.
2. The Third Five-Year Plan introduced the concept of import substitution as
a strategy for industrialization.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

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2010
Q. In the context of Indias Five Year Plans, a shift in the pattern of
industrialization, with lower emphasis on heavy industries and more on
infrastructure begins in
(a) Fourth Plan
(c) Eighth Plan

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(b) Sixth Plan


(d) Tenth Plan

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