Economic Planning

Economic Planning is a process under

which a central authority determines a
set of economic and social targets for an
economy and these targets are set
according to the resources of the country
within a specified period of time
 Objectives of Economic
planning
1)Increase in per capita real income
2)Full employment
3)Equitable distribution of wealth
4)Reduction of poverty
5)Industrialization
6)Self sufficiency in agricultural products.
7)Development of social and economic
infrastructure
 Features of Indian Economic Plans
1)Heavy Reliance on Public sector
2)Regulated development of Private sector
3)Protection of small scale Industries
4)Thrust on saving an Investment
5)Export Promotion an Import Substitution
6)Centralized planning
 Achievements of Indian economic
plans
1)Increase in national Income:-
During British period the national income of
India was increasing at the rate of 0.5 percent
per annum. But during planning period the
national income of India increased about 4.5
percent.
 Plans National income growth
Rate (%)
First 3.7

Third 2.8

Fifth 5.0

Seventh 5.8

Ninth 5.5

Tenth 7.8

SOURCE: ECONOMIC SURVEY

2)Growth In Per Capita Income: - before
independence the growth rate was almost
zero. During first plan it was 1.8% which
was 3.6 % in the ninth Plan.
3)Increase in the rate of capital formation :- In
1950-51 the rate of capital formation was 10
percent of GDP which increased to which
increased to 35.9 percent of GDP in 2006-07
4) Development of Industries:- During the
planning period the growth rate of the
industrial production has been about seven
percent
 Plan Growth In production %

First 8

Second 7

Eighth 8

Ninth 5
5)Development of Economic Infrastructure:- The total
road length increased from 1,57000KM in 1950-51
to 3.34 million KM electricity production increased
from 2300 M. Watt to 1,12,682 M. watt in 2003-04.
6) Development of social infrastructure:- death rate
decreased from 27 per thousand in 1950-51 to 8 per
thousand in 2004. Avg. life expectancy increased
from 32 years in 1951 to 65 years in 2004. Many
diseases eradicated. There is spread of education
and health facilities.
7) Self sufficiency:- the percentage contribution in the
foreign assistance is decreasing in financing the
plans. In 3rd plan it was 12.8 5 and came down to
10 5 in the 6th and 7th plan in 8th plan it was 6.6
5%. Exports are increasing and the growth rates of
imports have been declined over years.
Causes of failure of Indian Economic
plan
1)Rise in prices
2)Inadequate development in infrastructure
3)Lack of strong foundation:- failure of monsoon
in 1965-66,1966-67 and 1979-80and wars of
1965&1971 then gulf crisis
5) Too Ambitious
6)Inequality in the distribution of income and
wealth.
7)No substantial increase in standard of living.
8)Corruption