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
• Approval- After 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 won‘t 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 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
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 Irrigation and energy (27.2 percent)
o Agriculture and community development (17.4 percent)
o Transport and communications (24 percent)
o Industry (8.4 percent)
o Social services (16.64 percent)
o Land rehabilitation (4.1 percent), and
o 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 govt’s 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
• Achieved 7.7% growth rate against visualized 10%
 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 2016-17
• To reduce the poverty by 10% and generate 7cr new
employment opportunities
 12th Five Year plan (2012-2014)
Economic Growth
Real GDP growth at 8%.
Agriculture growth at 4%.
Manufacturing growth at 10%.
Every state must attain higher growth rate than the rate achieved during 11th plan.
Poverty and Employment
Poverty rate to be reduced by 10% than the rate at the end of 11th plan.
5 Crore new work opportunities and skill certifications in non-farm sector.
Education
Mean years of schooling to increase to 7 years.
20 lakh seats for each age bracket in higher education.
End gender gap and social gap in school enrollment.
Health
Reduce : IMR to 25; MMR to 1. Increase Child Sex Ratio to 950.
Reduce Total Fertility Rate to 2.1
Reduce under nutrition of children in age group 0-3 to half of NFHS-3 levels.
Infrastructure
Investment in Infrastructure at 9% of GDP
Gross Irrigated Area 103 million hectare (from 90 million hectare)
Electricity to all villages; Reduce AT&C losses by 20%.
Connect Villages with All Weather Roads
National and State high ways to a minimum of 2 lane standard.
Complete Eastern and Western Dedicated Freight Corridors.
Rural Tele-Density to 70%.
40 Litres Per Capita Per Day Drinking Water to 50% of rural population; Nirmal Gram Status
to 50% of all Gram Panchayats.
Environment and Sustainability
Increase green cover by 1 million hectare every year.
30,000 MW renewable energy during Five Year Period.
Emission intensity of GDP to be reduced to 20-25% of 2005 levels by 2020.
Service Delivery
Banking Services to 90% of Indian Households.
Subsidies and Welfare related payment to be routed through Aadhar based Direct Cash
Transfer Scheme.