The Five-Year Plans

First plan (1951-1956)

A total budget of 206.8 billion was allotted to six major areas, irrigation and energy, agriculture
and community development, transport and communications, Industry, social services, and land
rehabilitation. Many irrigation projects were initiated during this period, including the Bhakra
Dam. The World Health Organization, with the Indian government addressed children's health
and reduced infant mortality, contributing to population growth. Five Indian Institutes of
Technology (IITs) were started as major technical institutions. University Grant Commission
was setup to take care of funding and take measures to strengthen the higher education in the
country. Contracts were signed to start five steel plants; however these plants did not come into
existence until the middle of the next five-year plan.

Second plan (1956-1961)

The second five-year plan focused on industry, especially heavy industry. Domestic production
of industrial products was encouraged, particularly in the development of the public sector.
Hydroelectric power projects and five steel mills at Bhilai, Durgapur, and Jamshedpur were also
established. The Atomic Energy Commission was formed in 1957 with Homi J. Bhabha as the
first chairman. The Tata Institute of Fundamental Research was established as a research
institute.

Third Plan (1961-1966)

The planned stress was on agriculture, but the brief Sino-Indian War (1962) exposed weaknesses
in the economy and shifted the focus towards defense. In 1965-1966, the Green Revolution
advanced agriculture. The wars led to rising prices in India. The priority was thus shifted to price
stabilization. In an effort to bringing democracy, Panchayat elections were started and the states
were given more development responsibilities. State secondary education boards came into
existence. States were made responsible for secondary and higher education. State road
transportation corporations were formed and local road building became a state responsibility.

Fourth Plan (1969-1974)

The highlight of this plan was the nationalization of 19 major Indian banks. The situation in East
Pakistan (now Bangladesh) was becoming dire due to the Indo-Pakistan war of 1971 and the
Bangladesh Liberation war. Funds earmarked for the industrial development had to be used for
the war effort and liberating Bangladesh. India also performed the Smiling Buddha underground
nuclear test in 1974, partially in response to the United States deployment of the Seventh Fleet in
the Bay of Bengal to warn India against attacking West Pakistan and widening the war.

Fifth Plan (1974-1979)

Stress was laid on employment, the reduction of poverty, and justice. The plan also focused on
swadeshi (self-reliance) with respect to agricultural production and defense. In 1978 the newly
elected Morarji Desai government from Janta Party rejected the plan.

Sixth Plan (1980-1985)

Called the Janata government plan, the sixth plan marked a reversal of the Nehruvian model. The
then young prime minister Rajiv Gandhi, aimed for rapid industrial development, especially in
the area of information technology. Progress was slow, however, in part because of the
cautiousness of labor and communist leaders. The Indian national highway system was
introduced for the first time and many roads were widened to accommodate the increase in
traffic. Tourism in India also expanded. After the devaluation of the rupee it became cheap for
foreigners visiting India. The sixth plan also marked the beginning of economic liberalization.
Price controls on prices was eliminated and ration shops were closed. This led to an increase in
food prices and an increased cost of living. Family planning also was expanded in order to
prevent overpopulation.

Seventh Plan (1985-1989)

Stress was laid on improving the productivity level of industries by upgradation of technology.

Annual Plans (1989-1991)

The 1989-91 years, was a time of 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 Foreign Exchange (Forex) reserves, left with reserves of only about $1 billion (US).
Thus, under pressure, the country took the risk of reforming the socialist economy. At that time
Dr. Manmohan Singh (currently, Prime Minister of India) also called Father of Indian Economic
Reforms launched India's free market reforms that brought the nearly bankrupt nation back from
the edge. It was the beginning of privatization and liberalization in India.

Eighth Plan (1992-1997)

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. Meanwhile India became a member of the World Trade Organization on 1 January
1995.

Ninth plan (1997-2002)

The focus of ninth plan was growth with social justice and equality. This objective was sought to
be achieved through a policy of concentrating on agriculture and rural development to provide
more employment, ensuring food and nutritional security to all, curbing population growth,
empowerment of women and promotion of Panchayati Raj.

Tenth plan (2002-2007)

This plan laid down the ambitious target of 8% annual growth for the economy, against the
present stagnant rate of 5.5%. The emphasis was to increase the Public sector outlay and the
outlay for the states, doubling per capita income in 10 years, reduction of poverty, reduction in
the population growth rate, increase in employment and disinvestments.

Eleventh Plan (2007-2012)

The vision for the 11th plan is to ensure that the rapid growth achieved during the 10 plan is
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maintained, benefiting all parts of the country, especially rural areas. It identifies 7 major
challenges to achieve the above vision: 1. Providing essential public services to poor, regaining
agricultural dynamism, increasing manufacturing competitiveness, developing human resources,
protecting the environment, improving rehabilitation and resettlement practices and improving
governance.