Ramesh Singh Test : Planning in India- 2 - UPSC MCQ

In Phase-III of India's planned development (1974-1990), the government proposed to involve foreign capital for the first time, primarily through technology transfer and restricted to 26% of the total project value suggested by the private sector. This marked a significant shift in the approach to resource mobilization for development goals, showcasing the evolving strategies undertaken during different phases of planned development in India.

By the early 1980s, India had a structure of planning that involved planning at different levels. These included Center-Level Planning, State-Level Planning, and Local Level Planning. At the center level, various plans like the Five Year Plans, the Twenty-Point Programme, and MPLADS were in place. States had their own planning bodies known as State Planning Boards, and at the local level, planning was implemented through entities like District Planning Boards.

1. First Strata: Center-Level Planning - Five Year Plans, Twenty-Point Programme, MPLADS
- Correct. The First Strata involves central-level planning which includes the Five Year Plans, the Twenty-Point Programme, and MPLADS (Member of Parliament Local Area Development Scheme).

2. Second Strata: State-Level Planning - State Planning Boards, Chief Ministers
- Correct. By the 1960s, the states had their own planning bodies, the State Planning Boards, with the Chief Ministers as their de-facto chairmen.

3. Third Strata: District-Level Planning - District Planning Boards, Municipalities
- Incorrect. The Third Strata actually involves district-level planning through municipalities and corporations in urban areas and block-level planning through panchayats and tribal boards. District Planning Boards (DPBs) are involved in the Fifth Strata.

4. Fifth Strata: Local-Level Planning - Village-Level, Hill Area Planning, Tribal Area Planning
- Correct. The Fifth Strata deals with local-level planning which includes Village-Level, Hill Area Planning, and Tribal Area Planning.

Thus, pairs 1, 2, and 4 are correctly matched.

The Indian government encountered difficulties in mobilizing resources to support capital-intensive Plans, especially concerning Public Sector Undertakings (PSUs). This challenge stemmed from the need to fund these Plans, leading to the adoption of complex financial strategies such as liberal tax structures and nationalizing banks. The repercussions included issues like tax evasion, the growth of a parallel economy, and a decrease in available capital for the private sector.

1. Annapurna - Healthcare and Sanitation: Incorrect. The Annapurna scheme is related to food and nutrition, not healthcare and sanitation.

2. ASHA - Healthcare and Sanitation: Correct. Accredited Social Health Activist (ASHA) workers are involved in healthcare and sanitation initiatives.

3. Indira Aawas Yojana - Housing: Correct. The Indira Aawas Yojana is a housing scheme.

4. Sarva Shiksha Abhiyan - Education: Correct. The Sarva Shiksha Abhiyan is aimed at the universalization of elementary education.

Hence, three pairs are correctly matched.

1. National Statistical Commission - C. Rangarajan: This pair is correctly matched. The National Statistical Commission was indeed chaired by C. Rangarajan in 2000.

2. Fiscal Responsibility and Budget Management (FRBM) Act - 2003: This pair is correctly matched. The FRBM Act was enacted in 2003.

3. Value Added Tax (VAT) - Promotes centralization: This pair is incorrectly matched. VAT implementation is actually a step towards decentralization, allowing states more control over their tax revenues.

4. 73rd and 74th Constitutional Amendments - Decentralized planning: This pair is correctly matched. The 73rd and 74th Amendments promoted decentralized planning by delegating powers to local bodies.

So, pairs 1, 2, and 4 are correctly matched, while pair 3 is not.

Thus, the correct answer is Option C: Only three pairs.

Statement 1 is correct. By the mid-1960s, the Centre empowered the states to undertake planning and advised them to promote planning at lower administrative levels, including district-level planning via municipalities, corporations, and panchayats.

Statement 2 is correct. At the Centre-Level Planning, three types of plans had evolved: the Five Year Plans, the Twenty-Point Programme, and the MPLADS.

Statement 3 is incorrect. By the early 1980s, India had indeed developed local-level planning structures such as the District Planning Boards (DPBs) which acted as the nodal agencies for local planning.

Thus, the correct answer is Option B: 1 and 2 Only.

Statement-I correctly identifies that India initiated economic reforms in 1991 due to a Balance of Payment crisis, leading to the adoption of IMF conditions. Statement-II accurately mentions FERA's role in 1974, where India first considered foreign capital through technology transfer, limited to 26% of project value. Statement-II's context of FERA's provisions aligns with the background that necessitated the broader economic reforms in 1991, making both statements correct and interrelated.

All the statements provided are correct based on the information given.

1. The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 allows state governments to engage in market borrowings for plan expenditures without prior approval from the Central Government.

This statement is correct. The FRBM Act was designed to introduce financial discipline in the management of public funds and empowers state governments to undertake market borrowings for plan expenditures independently.

2. The Constitution of India mandates the establishment of a Finance Commission to recommend measures for the distribution of financial resources between the Union and the states.

This statement is also correct. The Constitution of India provides for the establishment of a Finance Commission to ensure a fair and equitable distribution of financial resources between the Union and the States.

3. The Planning Commission, as suggested by P.J. Rajamannar, was advised to be made a statutory body independent of the government.

This statement is correct. P.J. Rajamannar recommended that the Planning Commission should be made a statutory body independent of the government to clearly define its scope and functions relative to the Finance Commission.

Thus, all three statements are correct, making Option D the correct answer.

1. Phase-I (1951-1969) : State-led development with external resource mobilization - Correct. This phase focused on state-led development using external resources for infrastructure and social sector development, with the Mahalanobis Plan being implemented during this period.

2. Phase-II (1970-1973) : Inclusion of private capital in a big and open way - Incorrect. During this phase, private capital was included but not in a big and open way. The idea of the 'Joint Sector' was introduced, involving a combination of partners: Centre, state, and private sector.

3. Phase-III (1974-1990) : Utilization of foreign capital through technology transfer route - Correct. In this phase, the government proposed utilizing foreign capital through technology transfer (up to 26% of the total project value), and not through direct cash foreign investment.

4. Phase-IV (1991 onward) : Economic reforms due to Balance of Payment crisis - Correct. This phase saw economic reforms initiated due to a severe Balance of Payment crisis, leading India to seek financial help from the IMF and restructure its economy.

Thus, three out of the four pairs are correctly matched.