AMITY COLLEGE OF COMMERCE

AND FINANCE
BUSINESS ENVIRONMENT AND LAW(LAW25)

ECONOMIC PLANNING IN INDIA FROM 1950-2020

SUBMITTED BY:- Ubaid Liyaqat Dar &Yashpal Saini

ENROLLMENT NUMBER:- A031143720012 & A031143720013

 Economic Planning
• Economic Planning is to make decision with respect to
the use of resources.
• Economic Planning is a term used to describe the long
term plans of Govt. to co-ordinate and develop the
economy.
Objectives of Economic Planning-
 Economic Growth
 Reduction of Economic In-equalities
 Balanced Regional Development
 Modernization
 Reduction of Unemployment.
 Need for Economic Planning
• When India gained independence, its economy was
groveling in dust.
• The British had left the Indian economy crippled and
the fathers of development formulated 5years plan to
develop the Indian economy. 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
 Planning commission of India
• The planning commission is an institution in the
government of India which formulates economic
policies and drafts five year plan.
It was Set up on 15 March,1950 with Prime Minister
Jawaharlal Nehru as the chairman.
• The commission has a nominated
Deputy Chairman, who has rank of a
Cabinet Minister.
• Montek Singh Ahluvaliya is currently
the Deputy Chairman of the
Commission.
Functions of Planning Commission
• To estimate the physical, capital and human
resources of the country.
• To prepare plan for making effective and balanced
utilization of human resources.
• To determine the various stages of planning.
• To indicate those factors to the Govt which check
the economic development.
• To advise the Centre and State Govt on special
matters referred.
 Five Year Plans Of India
• The economy of India is based in part on planning through its five
year plans which are developed, executed and monitored by planning commission.
 The Twelfth plan is currently underway.
• First five year plan(1951-1956)
• Second eve year plan (1956-1961}
• Third eve year plan (1961-1966}
• Fourth eve year plan (1969-1974}
• Fifth eve year plan (1974-1979)
• Sixth eve year plan (1980-1985)
• Seventh eve year plan(1985-1990)
• Eighth eve year plan(1992-1997)
• Ninth eve year plan(1997-2002)
• Tenth eve year plan (2002-2007)
• Eleventh eve year plan (2007-2012)
• Twelfth eve year plan (2012-2017)
First Five Year Plan (1951-1956)

• Prime Minister Pandit Jawaharlal Nehru presented the

First Five-Year Plan in 1951
• Plan mainly focused in development of the primary sector.
• The total planned budget of Rs.2069 crore was allocated
to seven broad areas : Irrigation, Energy, Agriculture and
community development, Transport and
Communication,
industry, Social Services, Land Rehabilitation.
• The target growth rate was 2.1% annual .
 First Five Year Plan : A Review
• The achieved growth rate was 3.6% .
• National income increased more than the per capita
income due to rapid population growth.
• Many irrigation projects were initiated during this
period, including the Bhakra Dam and Hirakud Dam.
• At the end of the plan period in 1956, five IITs were
started as major technical institutions.
• The UGC was set up to take care of funding and take
measures to strengthen higher education in the
country.
Second Five Year Plan(1956-1961)
• The Second Plan focused on the development of the
Public Sector Industries.
• Followed Mahalanobis model propounded by the
famous statistician Prasanta Chandra Mahalanobis in
the vear 1953.The model addresses different issues
pertaining to economic development.
• The plan attempted to determine the optimal
allocation of investment between productive sectors
in order to maximize long-run economic growth.
 Second Five Year Plan: A Review
• Hydroelectric projects and steel plants at Bhilai, Durgapur
and Rourkela were established.
• Coal production was increased.
• More Railway lines were added in the north east.
• The Tata Institute of Fundamental Research was established.
• Allocation offunds among various sectors: power and
irrigation, social services, communications and transport,
and miscellaneous.
• The target growth rate was 4.5% and the actual growth rate
was 4.27%.
 Third Five Year Plan(1961-1966)

• The Third Fiye-year Plan stressed on agriculture and

improvement in the production of wheat
• Brief Sino- Indian War of 1962 exposed weaknesses in
the economy and shifted the focus towards the defense
industry and the Indian Army.
• In 1965-1966, India fought a war with Pakistan.
• There was also a seyere drought in 1965.
• The war led to inflation and the priority was shifted to
price stabilization.
 Third Five Year plan: A Review
• Dams were constructed.
• Cement and fertilizer plants were built.
• Punjab began producing an abundance of Wheat
• Many primary schools were started in rural areas.
• States were made responsible for Secondary & Higher education.
• Panchayat elections were started and the states were given more development
responsibilities.
• State electricity boards and state secondary education boards were formed.
• State road transportation corporations were formed and local road building became a
state responsibility.
• The target growth rate was 5.6%, but the actual growth rate was 2.4%. Due to
miserable failure of the Third Plan the government was forced to declare "plan
holidays" {from 1966-67, 1967—68, and 1968-69]. Plan holidays were due to war,
lack of resources, and increase in inflation.
• Three annual plans were drawn during this intervening period.
 Fourth Five Year pIan(1969-1974)
• At this time Indira Gandhi was the Prime Minister
• 14 major Indian banks were Nationalised
• The Green Revolution in India advanced agriculture.
• Food grains production increased to bring about self
sufficiency in production.
• Funds earmarked for the Industrial Development had to
be used for the war effort with Bangladesh and Pakistan.
• The target growth rate was 5.6%, but the actual growth
rate was 3.3%
 Fifih Five Year plan(1974-1979)
• The Fifth Five-Year Plan laid stress on Employment, Poverty
Alleviation and Justice.
• The plan also focused on self-reliance in agricultural production
and defense.
• The Electricity Supply Act was amended in 1975, which enabled the
central government to enter into power generation and
transmission.
• The Indian National Highway System was introduced Many roads
were widened to contain the increasing traffic.
• Tourism also expanded.
• The target growth rate was 4.4% and the actual growth rate was
5.0%
 Sixth Five Year plan (1980-1985)
The Sixth Five-Year Plan marked the beginning of Economic
Liberalization.
• Price controls were eliminated and ration shops were closed.
• This led to an increase in food prices and an increase in the cost
of living.
• Family Planning was also expanded for prevention of over
population.
• The Sixth Five-Year Plan was a great success to the
Indian economy.
• The target growth rate was 5.2% and the actual growth
rate was 5.4%.
Seventh Five Year plan(1985-1989)

• Laid stress on improving the productivity level of industries by

upgrading of technology.
• The main objectives were to establish growth in areas of increasing
economic productivity, production offood grains, and generating
employment.
• The Seventh Plan had strived towards socialism and energy
production at large.
• Thrust areas were: social justice, removal of oppression of the weak,
using modern technology, agricultural development, anti-poverty
programmers, full supply of food, clothing, and shelter, increasing
productivity of small-and large-scale farmers, and making India an
independent economy.
• The target growth rate was 5.0% and the actual growth rate was
 Period between 1989-91

• The Eighth Plan could not take off in 1990 due to

the fast changing political situation at the Centre
• The years 1990-91 and 1991-92 were treated as
Annual Plans.
• The Eighth Plan was finally launched in 1992 after
the initiation of structural adjustment policies.
 Eight Five Year plan(1992-1997)

• 1989-91 was a period of economic instability in India and

hence no five-year plan was implemented.
• Between 1990 and 1992, there were only Annual Plans.
• In 1991, india faced a crisis in foreign exchange reserves, left
with reserves of only about USS1 billion. Thus, under pressure,
the country took the risk of reforming the socialist economy.
• Narasimha Rao was the Prime Minister
• Dr. Manmohan Singh launched Privatisation & Liberalisation in
india that brought the nearly bankrupt nation back from the
edge.
 Ninth Five Year Plan (1991 - 2002)
• Population control.
• Correct inequalities
• Increase economic growth
• Generating employment by giving priority to agriculture and rural
development.
• Reduction of poverty.
• Ensuring proper availability of food and water for the poor.
• Availability of primary health care facilities and other basic necessities.
• Primary education to all children in the country.
• Empowering the socially disadvantaged classes like Scheduled castes,
• Scheduled tribes and other backward classes.
• Developing self-reliance in terms of agriculture.
• Acceleration in the growth rate of the economy with the help of stable
prices.
 Tenth Five Year Plan(2002-2007)

• Attain 8% GDP growth per year.

• Reduction of poverty by 5% by 2007.
• Providing gainful and high-quality employment at
least to the addition to the labour force.
• Reduction in gender gaps in literacy and wage
rates by at least 50% by 2007.
• Expenditure of Rs 43,825 crores for tenth five
years
• Target growth: 8.1% - growth achieved: 7.7%
 11TH Five Year Plan Highlights
• Broad based and Inclusive Growth
• Accelerate GDP growth from 8% to 10%
• Increase agricultural GDP growth rate to 4%
• Create 70 million new work opportunities.
• Increase literacy rate for persons of age 7
years or above to 85%
• Target growth: 9%; Growth achieved:7.9%
 12th Five Year Plan

• 12th five year plan (2012-17) sets average growth target

at 8.2%.
• The theme of the Approach Paper is "Faster, Sustainable
and more inclusive growth" .

• 12th five year plan (2012-17) sets average

• growth target at 8.2 percent.
• The theme of the Approach Paper is
• "Faster, Sustainable and more inclusive growth" .
 INDIA VISION-2020
• Planning commission has released INDIA VISION-2020 on
January 23, 2003 which presents pre-assessment of the
progress of the Indian economy for the next two decades.
• Salient points of the vision-
• The expected growth rate by 2020 to be 9%
• Elimination of unemployment, illiteracy & poverty by 2020
• Per capita income to get doubled by 2020
• Present employment share in agriculture to come down
from 56% to 40% by 2020
• To overcome the water problem in Metropolitan cities.
 Replacement of Planning
Commission

• NITI Aayog or National Institution for Transforming India Aayog is a policy think-
tank of Government of India that replaces Planning Commission 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 Khutiar I.A.S.
 Future
• With the Planning Commission dissolved, no more formal plans are made for
the economy, but Five-Year Defense Plans continue to be made. The latest is
2017-2022 .There will be no Thirteenth Five-Year Plan.
• The 12th Plan has taken off; it is yet to be formally approved with the aim of the
growth rate .
 Final Objectives Of Planning Commision Of
India
• To evolve a shared vision of development priorities sectors and
strategies with the active involvement of states in the light of
new objectives
• Economic planning help in mobilizing and allocating the
resources in desired manner.
• Objective of economic planning is to reduce
Inequality ,Economic growth, balanced Regional growth ,
Moderniztion
• Each five year plan aims to achieving certain target. Five year
plan constitute the steps toward the fulfillment of objectives of
economic planning. But most of the Plans could not achieve the
targets.