Project Report

On
Economic Planning In India

Submitted By: To:

1) Kunal Kishore Dr. Tophan Patra
2) Shivani Singh
3) Sakshi Lal
4) Rohan Chandna
5) Shalini Singh
6) Satyam Singh

In Association With :

Institute Of Management Studies Ghaziabad

1
INTRODUCTION

According to Lionel Robbins, Lionel Robbins, strictly speaking, all economic life involves planning.
To plan is to act with a purpose, to settle on and selection is that the essence of economic activity.
within the words of Barbara Wooten, Planning could also be defined because the conscious and
deliberate choice of economic priorities by some public authorities. individualism policy may be a
luxury for contemporary governments. in order that they have economic plans. within the developed
nations of the planet, they plan for economic stability. But within the underdeveloped nations, they
plan for economic process and development. The 20th century was an era of designing. Almost every
country had some kind of planning.
In socialist countries, planning is nearly a faith. Even in countries just like the U.S.A. and the U.K.
with a capitalistic system, they need partial planning. The 19th century State was an individualism
state. It followed a policy of non intervention in economic affairs. But the fashionable State may be a
state. the 2 World Wars, the good Depression of 1930s and therefore the success of designing in
former Soviet Russia have underlined the necessity for planning. Planning may be a gift of former
Soviet Russia to the planet. For, it had been the primary country to practice economic planning on a
national scale. Many economists today agree that planning is an organized, conscious and continuous
plan to select the essential available alternatives to realize specific goals. Planning involves the
economizing of scarce resources. Most of the underdeveloped countries of the planet became
independent only fifty or sixty years back and most of them were poor at that point. So, it became the
most business of the Governments of the newly emergent nations to supply food, clothing and shelter
to their people.
For that, first of all, that they had to extend their value. Since most of them were agricultural
countries, that they had to evolve some programmed for agricultural development. Not only that, that
they had to industrialize their economies. and that they had to supply more jobs to their people.
meaning, that they had to try to to something for expanding employment opportunities. Further, as
most of them were wedded to some quite socialism, that they had to scale back inequalities of income
and wealth. of these things, the poor countries attempted to try to to by means of economic planning.
Another main reason for the emergence of designing in underdeveloped countries is that the failure of
the market mechanism. The capitalism is essentially a free enterprise and price mechanism works
through the market system. the worth system may be a basic institution of capitalism. The allocation of
resources and distribution of rewards are done through the worth system. All decisions of the
businessmen, farmers, industrialists then on are guided by the profit motive. If the market is ideal,
price system is sweet. But if there's monopoly and other sorts of imperfect competition, the market
system fails. And it involves government intervention by way of designing. what's

ECONOMIC PLANNING

Economic development of India over the last five decades in unique in several ways. In an innovative
effort the founding fathers adopted the center course of an economy. Assigning a pivotal role to public
sector & economy planning. The new approach to socio- economic process was set within a
framework of democracy Guarantying Universal Franchise. The board of designing Commission
formulation: Formulation of designing commission

Assessment of fabric Capital & Human Resources. best & balanced utilization Determination of
machinery for securing successful implementation of the plan. Progress & recommending adjustment
in policies and measure during the execution of the plan. the design commissions prepare the blue
print of the economic plans in consultation with the state and in accordance with the guide line
provided by the National Development Council (NDC) which insists of the Prime Minister, Central
Cabinet Ministers, Chief Ministers of the States and Member of designing commission. Successful
execution of an idea presupposes co-operation between the central and states governments. The NDC
was found out in August, 1952 with the subsequent objectives. To review the working of the National
plan from time to time. to think about important question of social and economic policies affecting
national Development and to recommend measure for the achievement of the aims & target of the
national plan.
ROLE OF ECONOMIC PLANNING

Gross Domestic Product (GDP) is one among the several measures of the dimensions of the economy.
it's defined because the market price of all final goods and services produced within the geographical
boundaries of a rustic during a given period of your time. It doesn't include the worth of intermediate
goods and eliminates the likelihood of double counting. GDP doesn't include depreciation of capital
stock. Depreciation deducted from GDP gives Net Domestic Product (NDP). India moved from the
Hindu Rate of Growth (HRG) during the sixties and seventies to a Bharatriya Rate of Growth (BRG)
of 5.8 per cent during the eighties and nineties. variety of eminent economists have asserted that the
expansion of the economy during the last half of the nineties was propped up by pay commission
related increases within the pay of government/public servants and this artificial increase is
unsustainable. Thus, the important rate of growth of the economy is currently not 5.8 per cent but
closer to five per cent. Other commentators have gone even further to say that services growth during
the whole nineties, which has kept average growth during the nineties at 5.8 per cent is unsustainable
which the underlying rate of growth is currently as low as 4.5 per cent. during this article I address
these and other related questions by looking a touch deeper into the underlying sector growth rates,
particularly the role of services. Such assertions supported short-term movements, are shown to
possess little relevance to long-term growth trends and prospects.

FIVE YEAR PLANS

First plan (1951-1956)

the primary Indian Prime Minister, Nehru presented the primary five-year decide to the Parliament of
India on Immaculate Conception, 1951. the entire plan budget of 206.8 billion INR (23.6 billion USD
within the 1950 exchange rate) was allocated to seven broad areas: 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). The plan promoting the thought of a self-reliant closed economy was developed by
Prof. P. C. Mahala Nobis of Indian Statistical Institute and borrowed the ideas from USSR's five-year
plans developed by Dommer.

The plan is usually mentioned because the Domer-Mahalanobis Model. 15 The target rate of growth
was 2.1 percent annual gross domestic product (GDP) growth; the achieved rate of growth was 3.6
percent. During the primary five-year plan internet domestic product went up by 15 percent. The
monsoons were good and there have been relatively high crop yields, boosting exchange reserves and
per capita income, which went up 8 percent. Lower increase of per capita income as compared to value
was thanks to rapid increase. Many irrigation projects were initiated during this era , including the
Bhakra Dam and Hirakud Dam. the planet Health Organization, with the Indian government,
addressed children's health and reduced infant death rate , contributing to increase . At the top of the
plan period in 1956, five Indian Institutes of Technology (IITs) were started as major technical
institutions. University Grant Commission was found out to require care of funding and take measures
to strengthen the upper education within the country. Contracts were signed to start out five steel
plants; however these plants didn't inherit existence until the center of subsequent five-year plan.
Second plan (1956-1961)
The second five-year plan focused on industry, especially heavy industry. Domestic production of
commercial products was encouraged, particularly within the development of the general public sector.
The plan followed the Mahalanobis model, an economic development model developed by the Indian
statistician Prasanta Chandra Mahalanobis in 1953. The plan attempted to work out the optimal
allocation of investment between productive sectors so as to maximise long-run economic process . It
used the prevalent state of art techniques of research and optimization also because the novel
applications of statistical models developed at the Indian Statiatical Institute. Hydroelectric power
projects and five steel mills at Bhilai, Durgapur, and Rourkela were established. Coal production was
increased. More railway lines were added within the north east. The nuclear energy Commission was
formed in 1957 with Homi J. Bhabha because the first chairman. The Tata Institute of Fundamental

Research was established as a search institute. In 1957 a talent search and scholarship program was
begun to seek out talented young students to coach for add atomic power .

Third plan (1961-1966)

The third plan stressed on agriculture and improving production of rice, but the brief SinoIndian War
in 1962 exposed weaknesses within the economy and shifted the main target towards defense. In 1965-
1966, the revolution in India advanced agriculture. The war led to inflation and therefore the priority
was shifted to cost stabilization. the development of dams continued. Many cement and fertilizer
plants were also built. Punjab begun producing an abundance of wheat. 16 Many primary schools were
started in rural areas. In an attempt to bring democracy to the grassroot level, Panchayat elections were
started and therefore the states got more development responsibilities. State electricity boards and state
education boards were formed. States were made liable for secondary and better education. State road
transportation corporations were formed and native road building became a state responsibility.Gross
Domestic Product rate during this duration was lower at 2.7% thanks to 1962 Sino-Indian War and
Indo-Pakistani War of 1965. Gap between (1966-69) After 1965, when there was an opportunity due
to the Indo-Pakistan Conflict. Two successive years of drought, devaluation of the currency, a general
rise in prices and erosion of resources disrupted the design process and after three Annual Plans
between 1966 and 1969, the fourth Five-year plan was started in 1969.

Fourth plan (1969-1974) At this point Gandhi was the Prime Minister. The Gandhi government
nationalized 14 major Indian banks. additionally , things in Bangladesh (now independent Bangladesh)
was becoming dire because the Indo-Pakistani War of 1971 and Bangladesh Liberation War
happened . Funds earmarked for the economic development had to be used for the war effort. India
also performed the Smiling Buddha underground nuclear test in 1974, partially in response to the us
deployment of the Seventh Fleet within the Bay of Bengal to warn India against attacking Pakistan and
widening the war.

Fifth plan (1974-1979) Stress was laid on employment, poverty alleviation, and justice. The plan also
focused on selfreliance in agricultural production and defense. In 1978 the newly elected Morarji
Desai government rejected the plan. Electricity Supply Act was enacted in 1975, which enabled the
Central Government to enter into power generation and transmission. Sixth plan (1980-1985) Called
the Janta government plan, the sixth plan marked a reversal of the Nehruvian model. When Rajiv
Gandhi was elected because the prime minister, the young prime minister aimed for rapid industrial
development, especially within the area of data technology. Progress was slow, however, partly due to
caution on the a part of labor and communist leaders. The Indian national transportation system was
introduced for the primary time and lots of roads were widened to accommodate the increasing traffic.
Tourism also expanded. 17

The sixth plan also marked the start of economic liberalization. Price controls were eliminated and
ration shops were closed. This led to a rise in food prices and an increased cost of living. birth control
also was expanded so as to stop overpopulation. In contrast to China's harshly-enforced one-child
policy, Indian policy didn't believe the threat of force. More prosperous areas of India adopted birth
control sooner than less prosperous areas, which continued to possess a high birth rate. Seventh plan
(1985-1989)
The Seventh Plan marked the comeback of the Congress Party to power. The plan lay stress on
improving the productivity level of industries by up gradation of technology. Gap between (1989-91)
1989-91 was a period of political instability in India and hence no five year plan was implemented.
Between 1990 and 1992, there have been only Annual Plans. In 1991, India faced a crisis in exchange
(Forex) reserves, left with reserves of only about $1 billion (US). Thus, struggling , the country took
the danger of reforming the socialism . P.V. Narasimha Rao)(28 June 1921 23 December 2004) also
called Father of Indian Economic Reforms was the twelfth Prime Minister of the Republic of India and
head of Congress Party, and led one among the foremost important administrations in India's modern
history overseeing a serious economic transformation and a number of other incidents affecting
national security. At that point Dr. Manmohan Singh (currently, Prime Minister of India) launched
India's free

Market reforms that brought the nearly bankrupt nation back from the sting. It had been the start of
privatization and liberalization in India.

Eighth plan (1992-1997)

Modernization of industries was a serious 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 planet Trade Organization on 1 January 1995.This plan are
often termed as Rao and Manmohan model of Economic development. the main objectives included,
containing increase , poverty reduction, employment generation, strengthening the infrastructure,
Institutional building, Human Resource development, Involvement of Panchayat raj, Nagarapalikas,
N.G.O Sand Decentralization and peoples participation. Energy was given priority with 26.6% of the
outlay. a mean annual rate of growth of 6.7%against the target 5.6% was achieved. 18 Ninth Plan
(1997-2002)

The Ninth Five Year Plan, launched within the 50th year of India???s Independence, will take the
country into the new millennium. Much went on within the fifty years since independence. The people
of India have conclusively demonstrated their ability to forge a nation united despite its diversity, and
their commitment to pursue development within the framework of a functioning, vibrant and highly
pluralistic democracy. during this process democratic institutions have put down firm roots and
flourished and development has also taken place on a good front. because the millennium draws to an
in depth , the time has come to redouble our efforts at development, especially within the social and
economic spheres, in order that the country will realize its full economic potential and therefore the
refore the poorest and the weakest are going to be ready to shape their destiny in an unfettered manner.
this may require not only higher rates of growth of output and employment, but also a special
emphasis on all-round human development, with stress on social sectors and a thrust on eradication of
poverty. The Approach Paper to the Ninth Five Year Plan, adopted by the National Development
Council, had accorded priority to agriculture and rural development with a view to generating
adequate productive employment and eradication of poverty; accelerating the expansion rate of the
economy with stable prices; ensuring food and nutritional security for all, particularly the vulnerable
sections of society; providing the essential minimum services of safe beverage , primary health care
facilities, universal primary education, shelter, and connectivity to all or any during a time bound
manner; containing the expansion rate of population; ensuring environmental sustainability of the
event process through social mobilization and participation of individuals in the least levels;
empowerment of girls and socially disadvantaged groups like Scheduled Caste, Scheduled Tribes and
Other Backward Classes and Minorities as agents of socio-economic change and development;
promoting and developing people???s participatory bodies like Panchayati Raj institutions, co-
operatives and self-help groups; and strengthening efforts to create self-reliance. These very priorities
constitute the objectives of the Ninth Plan. Some specific areas from within the broad objectives of the
Plan as laid down by the NDC are selected for special focus. For these areas, Special Action Plans
(SAPs) are evolved so as to supply actionable, time-bound targets with adequate resources. Broadly,
the SAPs cover specific aspects of social and physical infrastructure, agriculture, information
technology and water policy. 19 The Ninth Plan is predicated on a careful stock taking of the strength
of our past development strategy also as its weakness, and seeks to supply appropriate direction and
balance to the socio-economic development of the country. The principal task of the Ninth Plan are
going to be to inaugurate a replacement era of growth with social justice and participation during
which not only the Governments at the Centre and therefore the States, but the people at large,
particularly the poor, can become effective instruments of a participatory planning process. In such a
process, the participation of public and personal sectors and every one tiers of state are going to be
vital for ensuring growth with justice and equity.
The Tenth Five Year Plan,
Covering the amount 2002-03 to 2006-07, represents but another step within the evolution of
development planning in India. within the 55 years that have passed since our Independence, the
challenges, the imperatives and therefore the capabilities of the state have undergone profound
changes. the design methodologies have attempted to stay pace with the emerging requirements and to
guide the economy through the vicissitudes of national and global events, with greater or lesser
success. The Tenth Plan carries on this tradition within the context of the target realities of Indian
economic life as they're

manifested today. The single-most important feature of our post-colonial experience is that the people
of India have conclusively demonstrated their ability to forge a nation united despite its diversity, and
to pursue development within the framework of a functioning, vibrant and pluralistic democracy.
during this process, democratic institutions have put down firm roots, which still gain strength and
spread.
The degree of democratization that has been achieved within the political arena is, however, not
matched by its progress on the economic front.

Eleventh Plan (2007-2012)

On the eve of the 11th Plan, our economy is during a much stronger position than it had been a couple
of years Ago. After slowing right down to a mean rate of growth of about 5.5% within the 9th Plan
period (199798 to 2001-02), it's accelerated significantly in recent years. the typical rate of growth
within the last four years of 10th Plan period (2003-04 to 2006-07) is probably going to be a touch
over 8%, making the expansion rate 7.2% for the whole 10th Plan period. Though, this is often below
the 10th Plan target of 8%, it's the very best rate of growth achieved in any plan period. 20 The 11th
Plan provides a chance to restructure policies to realize a replacement vision supported faster, more
broad-based and inclusive growth. it's designed to scale back poverty and specialise in bridging the
varied divides that still fragment our society. The 11th Plan must aim at putting the economy on a
sustainable growth trajectory with a rate of growth of roughly 10 per cent by the top of the Plan period.
it'll create productive employment at a faster pace than before, and target robust agriculture growth at
4% per annum . It must seek to scale back disparities across regions and communities by ensuring
access to basic physical infrastructure also as health and education services to all or any . It must
recognize gender as a cross-cutting theme across all sectors and plan to respect and promote the rights
of the commoner . the primary steps during this direction were initiated within the middle of the 10th
Plan supported the National Common Minimum Programme adopted by the govt . These steps must be
further strengthened and consolidated into a technique for the 11th Plan. rapid climb is an important a
part of strategy for 2 reasons. Firstly, it's only during a rapidly growing economy that we will expect to
sufficiently raise the incomes of the mass of our population to cause a general improvement in living
conditions. Secondly, rapid climb is important to get the resources needed to supply basic services to
all or any . Work done within the design Commission et al. suggests that the economy can accelerate
from 8 per cent per annum to a mean of around 9% over the 11th Plan period, provided appropriate
policies are put in situ . With population growing at 1.5% per annum , 9% growth in GDP would
double the important per capita income in 10 years. This must be combined with policies which will
make sure that this per capita income growth is broad based, benefiting all sections of the population,
especially those that have so far remained deprived. While encouraging private sector growth the 11th
Plan must also ensure a considerable increase within the allocation of public resources for Plan
programmes in critical areas. this may support the expansion strategy and ensure inclusiveness. These
resources are going to be easier to mobilize if the economy grows rapidly. a replacement stimulus to
public sector investment is especially important in agriculture and infrastructure and both the Centre
and therefore the States need to take steps to mobilize resources to form this possible. the expansion
component of this strategy is, therefore, important for 2 reasons: a) it'll contribute directly by raising
income levels and employment and b) it'll help finance programmes which will ensure more broad
based and inclusive growth.
NITTI AAYOG

NITI Aayog or National Institution for Transforming India Aayog may be a policy think-tank of state
of India that replaces committee and aims to involve the states in economic policy-making in India.
Union Govt. of India had announced formation of NITI Aayog on 1 January 2015. ??? Chairperson:
Prime Minister Narendra Modi Vice Chairperson: Arvind Panagariya CEO: Sindhushree Khullar IAS
Objective To evolve a shared vision of national development priorities, sectors and methods with the
active involvement of states within the light of national objectives.

CONCLUSION

On the bases of facts and figures Economic Planning is extremely important for each country. due to
excellent economic planning now we are one among the parts of developing countries. On the bases of
need in certain sectors government introduced five years plan for better development. Now India GDP
growth is extremely high as compare with other countries which is due to better planning. After
introduced 1991 policy the expansion of India became very faster due to liberalization and licensing in
several sectors. due to liberalization the speed Foreign Direct Investment increased after 1991.