OVERVIEW OF FIVE YEAR

PLANS
Planning means coordination and utilization of
available resources in an economy to achieve certain
pre-specified social and economic objectives.
All economies of the world have been endeavouring to
achieve economic development through economic
planning.
Origin of Economic Planning in India
All India Congress Committee appointed the Economic
Programme Committee in November 1947
The Committee was chaired by Jawahar Lal Nehru
Aim-To evolve an economic structure, which will yield
maximum production without operation of private
monopolies and create a proper balance between urban and
rural economies.
The committee was of the opinion that such a social structure
can provide an alternative to acquisitive economy of private
capitalism and the regimentation of totalitarian state.
This gave rise to the idea of a mixed economy.
The Economic Programme Committee submitted its
detailed proposal on 25th January 1948 and
recommended to establish a permanent planning
commission.
On 6th April 1948, the first Industrial Policy was
announced.
In March 1950,the planning commission was set up by
the government of India under the chairmanship of
Jawaharlal Nehru to prepare a plan for the effective
and balanced utilization of country’s resources.
Objectives of Planning
India embarked on the path of planned economic development on
1st April 1951.Since then, it has gone through numerous Five Year
Plans. Some of the objectives of these plans have been as follows:-
To increase national income and per capita income
To raise Agricultural production
To industrialize the economy
To achieve balanced regional development
To expand employment opportunities
To eradicate poverty
To reduce income and wealth inequalities
To achieve self-reliance
Four Categories
Various economists have grouped these objectives in
four categories:
1. Economic Growth
2. Modernization
3. Self-Reliance
4. Social Justice
PLAN FOCUS AREA OF PLAN
First Plan(1951-1956) Agricultural Development
Second Plan(1956-1961) Import substitution led growth, and
growth of heavy and basic industries
Third Plan(1961-1966) Economic Sufficiency
Fourth Plan(1969-1974) Technological reforms in agricultural
growth with stability
Fifth Plan(1974-1979) Elimination of poverty
Sixth Plan(1980-1985) Food and Fuel strategy
Seventh Plan(1985-1990) Human Resource Development
Eighth Plan(1992-1997) Liberalization, Privatization and
Globalization
Ninth Plan(1997-2002) Growth with social justice and equity
Tenth Plan(2002-2007) Growth with social justice and equity
Eleventh Plan(2007-12) Faster and Inclusive growth
Twelfth Plan(2012-2017) Priority to education, health and
infrastructure sector
1st five year plan(1951 to 1956)
The 1st five year plan was presented by Jawaharlal
Nehru, who was the Prime Minister during that period.
It was formulated for the execution of various plans
between 1951 to 1956. The Planning Commission was
responsible for working out the plan.
Objectives
The primary aim was to improve living standards of the
people of India by making judicious use of India's
natural resources.
Challenges-The after effects of World War II and
partition of India.
The total outlay for the plan was worth Rs.2,069 crore. This
amount was assigned to following sectors:
·  Industrial sector
·  Energy, Irrigation
·  Transport, Communications
·  Land rehabilitation
·  Social services
·  Development of agriculture and community

“The target set in the gross domestic product was 2.1% every
year and the actual achieved was 3.6% p.a. which is a clear
indication of the success of the 1st five year plan.”
Some important Events
 The following Irrigation projects were started during that period:
 Mettur Dam
 Hirakud Dam
 Bhakra Dam

 The government had taken steps

 To rehabilitate the landless workers, whose main occupation was

agriculture.
 Workers were also granted fund for experimenting and undergoing training
in agricultural know how in various cooperative institutions.
 Soil conservation, was also given considerable importance.

 The Indian government also made considerable effort in improving posts

and telegraphs, railway services, road tracks, civil aviation.
 Sufficient fund was also allocated for the industrial sector. In addition
measures were taken for the growth of the small scale industries.
 2nd Five year plan(1956 to 1961):

 The 2nd year five year plan, functioned on the basis of Mahalanobis model (1953).
 The Mahalanobis Model had three objectives:-
a) Developing a sound base for initiating the process of long term growth
b) High Priority to industrialization
c) Emphasis on development of capital goods industries against consumer goods
industries
 This strategy has been termed as import-substituting strategy. The Plan focused on self-
reliance.
 Infant Industry argument-According to this argument, domestic industries should be
protected from foreign competition in the initial stage of industrializaton. This is done
by imposing high import tariffs or quantitative restriction on imports. In this plan,
industrial allocation was raised tremendously and investment in other sectors like
agriculture was reduced.

Objectives:
 Industries got more importance in the 2nd five year plan.
 The focus was mainly on heavy industries. This was done primarily to
develop the public sector.
Government wanted that there should be optimum assignment of the
fund among the various productive segments.

 For this steel plants including the ones in Durgapur, Jamshedpur as well as
Bhilai were set up as per the 2nd five year plan.

 Hydroelectric power plants were formed during the tenure of the 2nd five year
plan.

 There was considerable increase in production of coal.

 The North eastern part of the country, witnessed increase in the number of
railway tracks.

 Atomic Energy Commission came into being in the year 1957.

 Tata Institute of Fundamental Research was born.

3rd five year plan(1961 to 1966)
Objectives :

Increasing the national income by 5 percent per annum.

Making India self sufficient by increasing agricultural

production. This step was taken to ensure that India does
not have to bank on others for food products.

Minimizing rate of unemployment.

Ensuring that people enjoy equal rights in the country.

Main Events
3rd five year plan laid considerable stress on the agricultural
sector. However, with the War of 1962 India diverted its
attention to the safety of the country. Again, during the
period 1965 to 1966, owing to Green Revolution, once again
agriculture attracted attention.

Due to the Sino Indian War, India witnessed increase in price

of products. Construction of Hirakud dam, Mettur dam and
Bhakra dam had taken place. India got many fertilizer plants
and cement making plants.
Role of the states increased. Many primary schools had
started functioning in the village areas. Various bodies
looking into matters related to secondary education were also
formed. To promote democracy, there was commencement of
the Panchayat elections.

There was formation of state electricity boards. The state

governments were entrusted with the responsibility of
constructing roads.
Challenges in the third five year plan
Growth rate came down to 2.2%
Two wars-China,1962,Pakistan,1965
Drought-1965-67 resulted in bad harvest for two
consecutive years
The failure in the third five year plan created so much
distress in the economy that long term planning was
abandoned for three years.
This period of three years (1966-69) is known as the
Annual plan period or Plan Holiday as three annual
plans were made,1966-67,67-68 and 68-69.
4th five year plan(1969 to 1974)
(As a stepping stone)
Main events
India had to reform and restructure its expenditure
agenda, following the attack on India in the year 1962 and
for the second time in the year 1965. During this period
India was struck by drought. India also had a stint of
recession. Due to recession, famine and drought, India did
not pay much heed to long term goals.
Food grains production increased to bring about self
sufficiency in production.
 The need for foreign reserves was felt. This facilitated
growth in exports. Import substitution drew considerable
attention.
An alteration in the socio economic structure of the society
was observed.(Effective execution of the plans)

The 5th Five Year Plan was also developed by the Planning
Commission. The Commission has a Deputy Chairman and
along with the Prime Minister, who acts as the Ex Officio
Chairman, the plan is laid out.
5th five year plan(1974-1979)
Objectives: to increase the level of employment, reduce
poverty and to attain self sufficiency in agriculture.

During this period the world economy was in a troublesome

state, which had a negative impact on the Indian economy.
Prices in the energy and food sector skyrocketed and as a
consequence inflation became inevitable.
Therefore, the priority was given to the food and energy
sectors .
In the later, increase in the supply of food grains and the
export of minerals and oil reserve earned quite a good
amount of foreign exchange to the Indian Economy.
Main Issues
Reducing the discrepancy between the economic development
at the regional, national, international level.

Improving the agricultural condition by implementing land

reform measures.

Improving the scope of self-employment through a well

integrated program.

Reducing the rate of unemployment both in the urban and the

rural sectors.
Encouraging growth of the small scale industries.

Enhancing the import substitution in the spheres including

chemicals, paper, mineral and equipment industries.

Applying policies pertaining to finance and credit in the

industrial sector.

Stressed on the importance of a labour intensive production

technology in India.
6th five year plan(1980-1985)
6th Five Year Plan is also referred to as the Janata
Government Plan, a change from the Nehruvian model of
Five Year Plans.

During this time the Prime Minister was Rajiv Gandhi and
hence industrial development was the emphasis of this plan.
His idea about the betterment of the industrial sector was
welcomed by some and opposed by lot others.

Changed a lot of things in India, on one hand it had

improved the tourism industry in India and on the other
hand it aimed at development in the Information Technology
sector.
Transport and Communication System
 The National Highways were all built during this time.
 Condition of the roads were improved. This helped in the betterment
of the traffic system in India.
 During this time the Indian currency was devalued and this led to a
dramatic increase in the number of foreign travellers in India thus
helping India to become a tourist destination.

New Introduction on the Economic Front

 Economic Liberalization was introduced for the first time in India
during this period.
 Ration shops were closed because government no more produced
articles at a subsidized rate.
 Prices of various goods increased leading to growth in the standard
of living of the residents of India.
Measures against Population Explosion

Family Planning was implemented for the first time in

India.

Created awareness among the Indians regarding

population.

However, this measure to control population was not

accepted across India. The mass of the less developed
areas refused to accept the plan and never implemented
it.
7th five year plan(1985-1989)
The come back vehicle of the Indian National Congress Party
into power. This Plan was released under the National
Development Council of India.

Objectives:
The primary aim of the five year plan was to upgrade the
industrial sector and enable India to establish itself as one
of the developed countries of the world.
To generate more scope of employment for the people of
India, to produce more in terms of food which would lead
to an overall increase in productivity.
Contents of the 7th Five Year Plan

Introduction and application of modern technology

Improving the position of the weak in the Indian society

Development of agriculture

Reducing poverty in India

Assuring the essentials of food, shelter and clothing to the

people

Help the small as well as the large farmers to increase their

productivity
The rate of employment was anticipated to rise by 4% every
year and the labour force was anticipated to grow by 39
million at the end of fifth year.

Overall improvement was the aim of the 7th Five Year Plan.
Therefore care was taken to establish a harmony in all the
sectors.

Special care was taken to spread education among girls,

enhance telecommunication within the country.

The government of India also strove to maintain a balance

in the economy and by striking a balance within export and
import.
8th five year plan(1992-1997)
Objective:
Modernization of industrial sector. This plan focused on
technical development.
Reduction of deficit and foreign debt was aimed at.
The rectification of certain flawed plans and policies were
also done.
 During this period only India received a an opportunity to
become a member of the World Trade Organization on
January 1st 1995.
Agricultural Activities

Agriculture happens to be the largest contributor to the

GDP of India.
Two third of the work force was dependent on agriculture.
Industries also made use of agricultural produce as inputs
in their production process.

Self-Sufficiency in Agricultural Production

Self-sufficiency in agricultural production was a top
priority.
Production of food increased to 176.22 million from 51
million which was a huge leap in comparison to the
previous years.
8th Five Year Plan had been more successful as the deficit was
reduced by 0.7% in the 8th Five Year Plan and by only 0.1% in
the 7th Five Year Plan.

Domestic savings as a percentage of GDP the 8th Five Year

Plan reached 24.4% while in the 7th Year Plan the figure was
20.2%.

Contribution of the export earnings contributed 10.1% to the

GDP while the 7th Year Plan contributed 9.9% to the GDP.

The import volume as a percentage of GDP was 10.9%

compared to the 7th Five Year Plan (10.3%).

In a nutshell the 8th five year Plan was more successful in
meeting its objectives as compared to the previous five 
9th five year plan(1997-2002)
9th Five Year Plan was formulated to act as a tool for solving
the economic and social problems existing in the country.
The latent economic reserves of the country which were still
not explored, should be utilized for the overall development
and benefit of the Indian economy in the coming five years.
Fresh actions to initiate improvement in the overall
economic and social sectors of the nation taken by the
government.
The mutual attempt by private and public sectors,
ultimately assured development of the Indian economy.
Primary objectives:

Industrialization at a rapid pace

Reduction in poverty level

Gaining self-sufficiency on local resources

Complete employment for all countrymen

Price stabilization

Control the ever-increasing rate of population

 Creating an independent market, for enhancing private
financial investments

Promotion of social events like conservation of specific

benefits for special social groups, female empowerment,
etc.

Achieving self sufficiency in food production

Generation of equal opportunities for employment and

taking steps to reduce poverty
10th five year plan(2002-2007)
Chief Objectives
Schooling to be compulsory for children, by the year
2003.
The mortality rate of children must be reduced to 45 per
1000 livings births and 28 per 1000 livings births by 2007
and 2012 respectively
All main rivers should be cleaned up between 2007 and
2012
Reducing the poverty ratio by at least five percentage
points, by 2007
Making provision for useful and lucrative employments
According to the Plan, it is mandatory that all infants
complete at least five years in schools by 2007.
Taking up of extensive measures, by planting more trees and
enhance the forest and tree areas to 25% by 2007 and 33% by
2012
Ensuring persistent availability of pure drinking water in the
rural areas of India, even in the remote parts
The alarming rate at which the Indian population is growing
must be checked and fixed to 16.2%, between a time frame of
2001 and 2011
The rate of literacy must be increased by at least 75%, within
the tenure of the Tenth Five Year Plan
There should be a decrease in the Maternal Mortality Ratio
(MMR) to 2 per 1000 live births by 2007. The Plan also
intended to bring down the Maternal Mortality Ratio to 1
per 1000 live birth by the year 2012.
11th five year plan(2007-2012)

India has emerged as a super power. The transition was not

easy. Guidelines for operating the economy was provided by
the five year plans.

Owing to India's five year plans, great advancement has

been made with regard to India's national income. Since
1951, the year when the 1st five year plan was presented by
the then Prime Minister Jawaharlal Nehru, India has come a
long way. India has taken giant strides and today it is
considered as one of the emerging powers.
Eleventh Five Year Plan (2007-2012)
The 11th five year plan was an ambitious plan with the following goals:
I. Increase in income and poverty alleviation
 Facilitate an increase in GDP growth from 8% to 10% and maintain
this growth rate in the 12th plan with an objective to make the per
capita income just twofold by 2016-17
 Enhance agricultural GDP growth rate to 4% every year to achieve a
huge benefit
 Generate more employment opportunities(about seventy million)
 Bring down the rate of unemployment among educated class(below
5%)
 Increase the rate of wages of unskilled workers(at least by 20%)
 Minimize the poverty headcount ratio(by 10% points)
II. Development in the Education sector
• Fill the gender gap in literacy to 10% point
• Ensure growth in the percentage of each group or class who is
going for higher studies(from 10% to 15% by the end of the
plan)
• Minimize the rates of dropout of children from primary
school(from 52.2 per cent in 2003-04 to 20% by 2011-12)
• Facilitate growth in the quality of primary education and a time
to time monitoring system to check the standard of education
• Enhance the rate of literacy for people who have attained the
age of 7 years or above to 85%
III. Improvement in the Health sector
Minimize infant mortality rate to 28 and maternal mortality ratio to 1 per 1000
live births
Minimize total fertility rate to 2.1
Make available clean drinking water to all by 2009 without fail
Bring down the malnutrition rate to half among children of age group 0-3
Minimize the rate of anemic patients among women and girls by 50% by the
end of the plan
Increase the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17
Make sure that at least 33% of the direct and indirect beneficiaries of all
government schemes are women and girl children
Make sure that all children should be blesses with safe childhood and are not
faced to work
IV Women and Children
Sex ratio for age group 0–6 to be raised to 935 by 2011–
12 and to 950 by 2016–17.
Ensuring that at least 33% of the direct and indirect
beneficiaries of all government schemes are women and
girl children.
Ensuring that all children enjoy a safe childhood,
without any compulsion to work.
V. Development of Infrastructure
Provide electricity to all villages and to people living below
poverty line by the end of 2009
Provide all-weather road connectivity to all the areas with a
population of 1000 and above ( in the hilly and tribal areas
500 people) by 2009, and to cover such area by 2015
Provide each and every village with telephone connection by
November 2007 and broadband connection by 2012
Provide land and building to all by 2012 and speed up the
work of house construction for the poor people living in the
rural areas and cover all of the them by 2016-17
VI. Focus on Environment
• Treatment of the sources of urban waste water by 2011-
12 so that river water can be cleaned
• A considerable growth( 20% points) in energy
efficiency by 2016-17
• Growth in forest and green areas by 5 percentage
points.
• Achievement of WHO standards in terms of air quality
in all major cities is concerned (by 2011-12)
The 12th Plan(2012-2017)
The government on 4th october approved the 12th five year plan (2012-17)
document that seeks to achieve annual average economic growth rate of 8.2
per cent, down from from 9 per cent envisaged earlier, in view of fragile global
recovery. The theme of the Approach Paper is “faster, sustainable and more
inclusive growth” .According to officials the projected average rate gross
capital formation in the 12th Plan is 37 per cent of GDP. The projected gross
domestic savings rate is 34.2 per cent of GDP and the net external financing
needed for macro economic balance has been placed at 2.9 per cent of GDP.
During the 11th Plan (2007-12), India has recorded an average economic
growth rate of 7.9 per cent. This, however, is lower than the 9 per cent
targetted in 11th Plan.Besides other things, the 12th Plan seeks to achieve 4 per
cent agriculture sector growth during 2012-17. The growth target for
manufacturing sector has been pegged at 10 per cent.The total plan size has
been estimated at Rs.47.7 lakh crore, 135 per cent more that for the 11th Plan
(2007-12).
The “strategy challenges” refer to some core areas that require
new approaches to produce the desired results. These are:
1.Enhancing the Capacity for Growth
2.Enhancing Skills and Faster Generation of
Employment
3.Managing the Environment
4.Markets for Efficiency and Inclusion
5.Decentralisation, Empowerment and Information
6.Technology and Innovation
7.Securing the Energy Future for India
8.Accelerated Development of Transport Infrastructure
9.Rural Transformation and Sustained Growth of
Agriculture
10.Managing Urbanization
11.Improved Access to Quality Education
12.Better Preventive and Curative Health Care
Highlightsof 12th Five Year Plan (2012-17):

Average growth target has been set at 8.2 percent

Growth rate has been lowered to 8.2 percent from the 9.0 percent projected earlier
in view adverse domestic and global situation.
Areas of main thrust are-infrastructure, health and education
Growth rate has been lowered to 8.2 percent from the 9.0 percent projected earlier
in view adverse domestic and global situation.
The commission had accepted Finance Minister P. Chidambaram’s suggestion that
direct cash transfer of subsidies in food, fertilizers and petroleum be made by the
end of the 12th Plan period
After the cabinet clearance, the plan for its final approval would be placed before
the National Development Council (NDC), which has all chief ministers and
cabinet ministers as members and is headed by the Prime Minister
Agriculture in the current plan period grew at 3.3 percent, compared to 2.4 percent
during the 10th plan period. The growth target for manufacturing sector has been
pegged at 10 percent
During the 11th Plan period, the average annual growth was 7.9 percent
 A full Planning Commission chaired by Prime Minister Manmohan Singh
on September 15 endorsed the document which has fixed the total plan size
at Rs.47.7 lakh crore
The 12th Plan seeks to achieve 4 percent agriculture sector growth during
the five-year period
On poverty alleviation, the commission plans to bring down the poverty
ratio by 10 percent. At present, the poverty is around 30 per cent of the
population.
 According to commission Deputy Chairperson Montek Singh Ahluwalia,
health and education sectors are major thrust areas and the outlays for
these in the plan have been raised.
The outlay on health would include increased spending in related areas of
drinking water and sanitation.