Planning and Five Year Plans in India

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PLANNING:



Ø  Primary Sector:           Agriculture, Forest, Fisheries, Mining

Ø  Secondary Sector:       Industries (Manufacturing and Construction)

Ø  Tertiary Sector:           Services (Trade, Transport, Communications, Banking,

                                     Insurance, Real estate etc)




PLANNING:

ü  
ü   Planning is a series of steps that are adopted to achieve a goal.
ü  So a plan aims at reaching the goal.
ü  No goal – No Planning.

PLANNING IN INDIA:
ü  During 1930’s a great economic depression took place throughout the World. The only exception was USSR. This success was exhibited by the planned economy of USSR. Then the concept of planning attracted the attention of the world.

ü  In the year 1934 M.Visvesvaraya wrote “Planned Economy for India” This is the first systematic work contemplating a planned economy for India.
ü  In the year 1938 Indian National Congress (INC) set up National Planning Committee.
ü  In 1943 few industrialists from Bombay presented Bombay Plan.
ü  In 1944 The Department of Planning and Economic Development was set up by the British Indian Government.  This department was headed by A D Dalal.
ü  In 1944 M N Roy (Founder of Communist Party of India) wrote an article People’s Plan.
ü  S M Agarwal published Gandhian Plan.
ü  In 1946 the Planning Advisory Board was set up by the interim government.
ü  Note: Bombay Plan, People’s Plan and Gandhian Plan were never implemented


Why there is a need for Planning in India?
·         Large Population
·         Low per capita income
·         Inequality of distribution
·         Inefficient production

ü  In India the Planning was taken up to overcome the above said problems.



OBJECTIVE S OF INIDAN PLANNING:

1.      To achieve total employment
2.      To maximize the Per capita income
3.      To enhance rapid industrialization
4.      To achieve self sufficiency
5.      To reduce inequalities of income


WHAT ARE THE BASIC FEATURES OF INDIAN PLANNING?

ü  MIXED ECONOMY: This is the co-existence of both the Public (government) and Private sector.

ü  BALANCED GROWTH STRATEGY: Both agriculture and industrial infrastructure are to be strengthened.

ü  MINIMIZING FOREIGN ASSISTANCE: this is in terms of both aid and transfer of technology.


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What India did?

India established Planning Commission and National Development Council.

Planning Commission:

ü  In the year 1950 Planning Commission was set up.

ü  Planning Commission was set up on the recommendation of Planning Advisory Board.

ü  Planning Commission was established through Cabinet Resolution.

ü  What is cabinet resolution? This is a decision taken by the Cabinet.

ü  The Prime Minister is the ex-officio chairman of the Planning Commission. This means whoever is the PM, acts as the Chairman of Planning Commission.

ü  The Planning Commission prepares the draft of the five year plans.


Note: Planning Commission is not a Constitutional body. It means this is not mentioned in the Constitution of India.


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NATIONAL DEVELOPMENT COUNCIL (NDC)

ü  NDC was set up in the year 1952.

ü  NDC was set up on the recommendation of Planning Commission.

ü  The Prime Minister is the Chairman of NDC.

ü  The NDC is the final approval body for the five year plans.


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FIVE YEAR PLANS IN INDIA:
First plan (April 1, 1951 to March 31, 1956):
ü  Main architect was KN raj (passed away in February, 2010).
ü  Agriculture, Irrigation and power projects were given top priority.
ü  Agriculture with 31% of outlay got the highest priority.
ü  Industry was with 4%. Of outlay
ü  The production of food grains increased by 20 percent
ü  With the success of agriculture, the prices level fell down and food prices were declined
ü  The CDP (Community Development Programme) was launched in the year 1952 to bring about all round development of rural areas with a special emphasis on agriculture. 
ü  It was a great success and the targets were achieved.
ü  But during the first plan limited attention was paid to the social objectives.
ü  The industrial sector was neglected.
ü  Locomotive factory (Chittaranjan), Fertilizer factory (Sindri), Indian Telephone Industry (Bangalore) were set up during 1st plan.


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SECOND FIVE YEAR PLAN (APRIL 1, 1956 TO MARCH 31, 1961):
ü  The architect of the second five year plan was P C Mahalanobis.
ü  Since the agriculture was a great success during the first plan, the emphasis was laid on industries during the second plan.
ü  Note: Industry was given priority during the second plan.
ü  Industries were given high priority with 20.1 % of the outlay.
ü  Transport and communications which were given priority during 1st plan continued to get the priority.
ü  Steel plants at (Bhilai(MP), Rourkela (Odisha) and Durgapur (West Bengal) were set up.
ü  Heavy engineering plant Ranchi, Lignite Corporation (Neyveli), Integral coach factory at Perumbudur were set up. 
ü  The main objectives of the second plan were
·         Rapid industrialization
·         Rapid increase in the National income
·         Massive expansion of the employment opportunities
·         Reduction in inequalities of income and wealth
ü  The targets were not achieved but a firm foundation was for the industrialization was laid in the country.
ü  As the 2nd plan gave priority to the industry and neglected the agriculture sector, it led to the Balance of payments problem.

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THIRD PLAN (APRIL 1, 1961- MARCH 31, 1966):

ü  Emphasis on basic industries continued but agriculture was also given the priority.
ü  The Performance during this period was very poor.
ü  The reasons for poor performance can be attributed to
·         Chinese aggression in the year 1962
·         Indo-Pak war in the year 1965
·         Failure of monsoons, particularly during 1965-66.

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ANNUAL PLANS: (1966-69):
ü  The annual plan is also called plan holiday.
ü  There were 3 annual plans
·         April 1, 1966 to March 31, 1967
·         April 1, 1967 to March 31, 1968
·         April 1, 1968 to March 31, 1969
ü  The planning process during the 3rd plan was affected seriously because of wars and famine.
ü  Hence the 5 year plan was given up till the economic normalcy is restored.
ü  Green revolution was initiated in the country.
ü  HYV (High Yielding Variety) seeds were introduced.
ü  As the supply of food grains increased the food prices came down and the economic stability was restored.
ü  Nationalization of banks was a major step during this period.

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FOURTH PLAN (APRIL 1, 1969 – MARCH 31, 1974):
ü  Emphasis was on growth with justice.
ü  Agriculture and allied sectors were given priority.
ü  The achievements fell short of the targets.
ü  The 4th plan was not a success.
ü  The reasons for the poor performance can be
·         Instability of the prices
·         Indo-Pak war in the year 1971
·         Drought in the year 1972

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FIFTH PLAN (APRIL 1, 1974 – MARCH 31, 1979):
ü  In the year 1977 the Janata Party came to the power.
ü  The 5th plan was terminated on March 31, 1978 ahead of the schedule.
ü  The Janata Part introduced rolling plan.
ü  Poverty eradication was given the highest priority.
ü  Attainment of self reliance was given importance.
ü  A National level programme of minimum needs was introduced.
ü  The Minimum needs programme covered
·         elementary education
·         safe drinking water
·         health care
·         shelter for landless
·         nutrition, rural roads
·         rural electrification
·         slum development.
ü  Janata party government terminated this programme.
ü  PDS (Public Distribution System) was introduced during this period.
ü  There was a severe inflation during this period and led to the bad performance of the plan.

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ROLLING PLAN (APRIL 1, 1978 – MARCH 31, 1980):
ü  The 5th plan was terminated in the year 1978.
ü  This rolling plan gave priority to the rural development.
ü  Note: In Rolling Plan the plan is revised at the end of every year for the next 4 years along with the formulation of a plan for the 5th year.

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SIXTH PLAN (APRIL 1, 1980 – MARCH 31, 1985):
ü  Energy was given the highest priority with 27.9%.
ü  Agriculture was given the second priority.
ü  The percentage of the people from BPL (Below Poverty Line) came down.
ü  There was a positive performance in the oil sector.
ü  The food grain production also increased considerably during this plan.
ü  The 6th plan was a success.


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SEVENTH PLAN (APRIL 1, 1985 – MARCH 31, 1990):
ü  Priority was given to the productive employment and energy.
ü  Agriculture was given the next priority.
ü  Industrial sickness occurred in small sector. 
ü  The 7th plan was a success as it exceeded the growth rate of 5.0 percent and reached 5.5 percent.
ü  A record level of food production of 172 million tonnes was achieved.

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ANNUAL PLAN OR PLAN HOLIDY
ü  1990 -92 was the plan holiday.


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EIGHTH PLAN (APRIL 1, 1992-MARCH 31, 1997):
ü  Human resources was given the top priority and called human face element of adjustment.
ü  Alleviating (removal) poverty and removing Unemployment was stressed.
ü  Since the Human development is not possible without economic growth priority was given to energy, transport and communication.
ü  The GDP (Gross Domestic Rate) target was 5.6 percent, but, achieved 6.54 percent.

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NINTH PLAN (APRIL 1, 1997 – MARCH 31, 2002):
ü  Growth with social justice and equality was given the priority.
ü  Agriculture and rural development were given importance.
ü  During this period the Planning Commission suggested that the subsidies should not exceed Rs. 72, 800 crore in the 9th plan period.
ü  The plan was not a success.
ü  The poor state of infrastructure is the most pressing constraint for growth.

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TENTH PLAN (APRIL 1, 2002 –MARCH 31, 2007):

ü  Doubling the per capita income in 10 years
ü  Reduction of BPL from 26% to 21% by 2007.
ELEVENTH PLAN (APRIL 1, 2007 – MARCH 31, 2012):


ü  The theme is “towards faster and more inclusive growth”.
ü  The target is to achieve 9% growth.
ü  Highest priority was given to education.
ü  Rural development, agriculture, irrigation and health were given priority.
ü  Accordingly government decided to set up 30 new central universities, 8 new IITs, 7 IIMs by 2012.
ü  Increasing literacy rate to 80%
ü  Reducing IMR (Infant Mortality Rate) to 28/1000
ü  Reducing MMR(Maternal Mortality Rate) to 1/1000
ü  Providing safe drinking water to all by 2009
ü  To improve sex ratio to 950 by 2016
ü  Broadband connectivity to all villages by 2012
ü  Telecommunications to all villages by 2009
ü  Electricity to all villages by 2009
ü  Roads to all villages by 2009
ü  PRI’s (Panchayati Raj Institutions) to be given priority as India is the only country which has so many women elected representatives. 

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TWELFTH FIVE YEAR PLAN (APRIL 1, 2012 – MARCH 31, 2012):

ü  The draft is approved by the NDC.
ü  The theme of the 12th plan is ‘Faster, sustainable and more inclusive growth”.
ü  In August 2011 the DC of PC announced that the
·         Health care
·         Education
·         Skill development                                     – highest priority.
·         Environment
·         Natural resources
·         Infrastructure development
ü  The proposed target is 9 (later reduced to 8.2 and finally to 8) percent growth rate.
ü  The NDC approved the 12th plan on December 27, 2012
ü  NDC approved to achieve growth rate of 8 percent.


ü  To generate 50 million jobs and to increase investment in infrastructure

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