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Flow of the Presentation
ͻ What is Economic Planning
ͻ Why Economic Planning
ͻ Who does it
ͻ Five Year Plans in India
ͻ Achievements of Planning in India
ͻ Some Failures in Plans
ͻ Conclusions
What is Economic Planning
Planning is defined as
conceiving, initiating,
regulating and
controlling economic
Resources Time
activity by the state
according to set
priorities with a view
Planning to achieving well-
defined objectives
within a given time.
Why Economic Planning
ͻ Efficient utilization of resources
ͻ Market imperfections and price distortions
ͻ Maximisation of National Income
ͻ Full Employment
ͻ Equitable distribution of income
ͻ Price Stability
ͻ Larger savings and investment
ͻ Social Justice
Who Does It

Planning Commission
Setup on March 15, 1950

ͻ Assessment of material, capital and human resources of the

ͻ Formulation of plans for the most effective and balanced
utilization of country͛s resources.
ͻ To determine the various stages of planning and to propose
the allocation of resources on the priority basis.
ͻ To act as an advisory body to the Union Government.
ͻ To evaluate from time to time the progress achieved in
every stage of the plan and also to suggest remedial
ͻ 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 ʹ up on August 6, 1952. The PM is the ex ʹ officio chairman
of NDC
ͻ All the plans made by the Planning Commission have to be
approved by National Development Council first
ͻ To prescribe guidelines for the formulation of the National Plan as
well as for the assessment of resources for the Plan.
ͻ To consider the National Plan as formulated by the Planning
Commission and endorse its development strategy.
ͻ To consider important questions of social and economic policy
affecting the country͛s development
ͻ 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):
ͻ Target of GDP growth - 2.1% per year.
ͻ Actual growth of GDP had been 3.6% per year.
ͻ Projects related to irrigation-the Mettur Dam, Bhakra Dam, and Hirakud Dam.
ͻ Rehabilitation of landless agricultural workers
ͻ Emphasis on agriculture and rehabilitation of refugees
ͻ Improvement of roads, civil aviation, railways, telegraphs, and posts.

The Second Five Year Plan (1956-61):

ͻ Economy reached a stage where agriculture can be assigned lower priority
ͻ Forward thrust given for the development of heavy and basic industries
ͻ Big push so that economy takes off
ͻ Industrial policy 1956 announced
ͻ Rapid industrialization- emphasis on development of heavy and basic industries- iron and
steel, heavy chemicals, heavy engineering and machine building
ͻ Plan was moderately successful
Five Year Plans in India
The Third Five Year Plan (1961-66):
ͻ Aimed at the establishment of a self reliant and self generating economy.
ͻ High priority was assigned to the agricultural sector and development of heavy
ͻ However, the approach had to be shifted to defense due to conflicts with China
(1962) and Pakistan(1965).
ͻ The construction of dams continued. Many cement and fertilizer plants were also
built. Punjab began producing an abundance of wheat.
ͻ The target growth rate of GDP and achieved was 4.5% and 4.3% respectively.

The Fourth Five Year Plan (1969-74):

ͻ Aimed at annual growth rate of 5.5 %
ͻ Self reliance and provide a national minimum
ͻ First 2 yrs were good then it failed
ͻ Failure of monsoons, decline in food grain production, decline in industrial
production, rise in prices and then Indo Pak war in 1972
ͻ Able to achieve only 3.4% GNP growth against target of 5.5%
ͻ A failed plan
Five Year Plans in India
The Fifth Five Year Plan (1961-66):
ͻ Stress was laid on employment, poverty alleviation, and justice
ͻ Sectors such as food, oil, and fertilizers prices sky-rocketed.
ͻ Attaining self-reliance in food and energy top priority.
ͻ The plan also focused on self-reliance in agricultural production and defenceFood grain production above
118 million tons
ͻ The Indian national highway system was introduced accommodate the increasing traffic. Tourism also
ͻ Indian exports crossed 18%, and the large earnings from exports

The Sixth Five Year Plan (1980-1985):

ͻ At the onset Rajiv Gandhi, prioritized speedy industrial development, special emphasis on information
technology sector.
ͻ From the Fifth Five Year Plan, the nation had self sufficiency in food.
ͻ Industrial sector was diversified, science and technology made a significant advance.
ͻ Programs on improvement of public health and epidemic control to reduce infant mortality and increase
life expectancy.
ͻ Investments in Indian healthcare sector.
ͻ Promote education
ͻ Broadly the plan a success - achieved average growth rate of 5.5%
Five Year Plans in India
The Seventh Five Year Plan (1985-1990):
ͻ The Seventh Plan marked the comeback of the Congress Party to power
ͻ Making India an Independent Economy
ͻ Social Justice
ͻ Removal of oppression of the weak
ͻ Using modern technology
ͻ Agricultural development
ͻ Anti-poverty programs
ͻ Full supply of food, clothing, and shelter
ͻ Increasing productivity of small and large scale farmers

Period between 1989-91

ͻ Political instability in India and hence no five year plan was implemented
ͻ Between 1990 and 1992, there were only Annual Plans
ͻ 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
ͻ Dr. Manmohan Singh launched India's free market reforms that brought the nearly bankrupt
nation back from the edge
ͻ It was the beginning of privatisation and liberalisation in India.
Five Year Plans in India
The Eight Five Year Plan (1992-1997):

ͻ Modernization of industries was a major highlight of the Eighth Plan

ͻ Severe economic crisis due to balance of payment crisis
ͻ Correction of the burgeoning deficit and foreign debt
ͻ This plan can be termed as Rao and Manmohan model of Economic development
ͻ 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
ͻ Fiscal reforms were initiated
ͻ Energy was given priority with 26.6% of the outlay
ͻ 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)
ͻ Focus was on growth with social justice
ͻ Priority to agriculture and rural development
ͻ Eradication of poverty
ͻ GDP growth of 6.5 % per annum
ͻ Achieved only 5.35% GDP growth rate

Tenth plan (2002-2007):

ͻ Reduction of poverty ratio by 5 percentage points by 2007;
ͻ Providing gainful and high-quality employment at least to the addition to the
labour force
ͻ All children in India in school by 2003, All children to complete 5 years of
schooling by 2007
ͻ Reduction in gender gaps in literacy and wage rates by at least 50% by 2007
ͻ Reduction in the decadal rate of population growth between 2001 and 2011 to
ͻ Increase in Literacy Rates to 75 per cent within the Tenth Plan period (2002 to
11 th Five Year Plan
m Prime Minister Manmohan Singh termed as ͞India͛s
Educational Plan͟.
m Cleared on 9th November 2007.
m Aimed at 9% growth rate.
m Highest priority to agriculture, education and health.
m Total outlay of the plan ` 36,44,718 crore of which
budgetary support will be ` 14,21,711 crore.
m Agriculture growth at 4% per year.
11 th Five Year Plan
11 th Five Year Plan
ͻ Income & Poverty
ʹ 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
ʹ Increase agricultural GDP growth rate to 4% per year to ensure a broader spread
of benefits
ʹ Create 70 million new work opportunities.
ʹ Reduce educated unemployment to below 5%.
ʹ Raise real wage rate of unskilled workers by 20 percent.
ʹ Reduce the headcount ratio of consumption poverty by 10 percentage points.

ͻ Education
ʹ Reduce dropout rates of children from elementary school from 52.2% in 2003-04
to 20% by 2011-12
ʹ Develop minimum standards of educational attainment in elementary school,
and by regular testing monitor effectiveness of education to ensure quality
ʹ Increase literacy rate for persons of age 7 years or above to 85%
ʹ Lower gender gap in literacy to 10 percentage point
ʹ Increase the percentage of each cohort going to higher education from the
present 10% to 15% by the end of the plan
11 th Five Year Plan
ͻ Health
ʹ Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000
live births
ʹ Reduce Total Fertility Rate to 2.1
ʹ Provide clean drinking water for all by 2009 and ensure that there are no slip-
ʹ Reduce malnutrition among children of age group 0-3 to half its present level
ʹ Reduce anaemia among women and girls by 50% by the end of the plan

ͻ Women and Children

ʹ Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17
ʹ Ensure that at least 33 percent of the direct and indirect beneficiaries of all
government schemes are women and girl children
ʹ Ensure that all children enjoy a safe childhood, without any compulsion to
11 th Five Year Plan
ͻ Infrastructure
ʹ Ensure electricity connection to all villages and BPL households by 2009 and
round-the-clock power.
ʹ 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
ʹ Connect every village by telephone by November 2007 and provide
broadband connectivity to all villages by 2012
ʹ 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

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

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