Five Year Plans - Economics,UPSC,IAS. | Indian Economy (Prelims) by Shahid Ali PDF Download

Five Year Plans

First Five Year Plan (1951 – 56)

• It was based on Harrod – Domar Model.
• Community Development Program was launched in 1952.
• Two – fold objectives were there :
• To correct the disequilibrium in the economy caused by 3 main problems – influx of refugees, severe food shortage and mounting inflation.
• To initiate a process of all – round balanced development to ensure a rising national income and a steady improvement in living standards.
• Emphasized on Agriculture, Price Stability, Power and Transport.
• It was more than a success, because of good harvests in the last two Years.

Second Five Year Plan of India ( 1956 – 61 )

• Also called ‘Mahalanobis Plan’ after its chief architect PC Mahalanobis. It was based on 1928 Soviet Model of Feldman.
• Its emphasis was on economic stability. Agriculture target fixed in the first plan was almost achieved.
• Consequently, the agriculture sector got low priority in the second five Year plan.
• Its objective was Rapid Industrialization, particularly basic and heavy industries such as iron and steel, heavy chemicals like nitrogenous fertilizers heavy engineering and machine building industry.
• Besides, the Industrial Policy of 1956 emphasized the role of Public Sector and accepted the establishment of a socialistic pattern of the society as the goal of economic policy.
• Advocated huge imports which led to emptying of funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon. During this plan, price level increased by 30%, against a decline of 13% during the First Plan.
• At its conception time, it was felt that Indian economy has entered a take – off stage. Therefore, its aim was to make India a ‘Self – Reliant’ and ‘Self – Generating’ Economy.

Third Five Year Plan of India ( 1961 – 66 )

• Also, it was realized from the experience of first two plans that agriculture should be given the top priority to suffice the requirements of export and industry.
• The other objectives of the plan included the expansion of basic industries, optimum utilization of country’s labor power and reducing the inequalities of income and wealth.
• Relied heavily on foreign aid ( IMF ).
• Complete failure due to unforeseen misfortunes, viz Chinese aggression ( 1962 ), Indo – Pak war (1965), severest drought in 100 Years ( 1965 – 66 ).
• Prices increased by 36% in 5 – Years.
• Hence, third plan failed in every respect.

Three Annual Plans ( 1966 – 69 )

• Plan holiday for 3 Years.
• The prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans.
• During these plans a whole new agricultural strategy involving wide – spread distribution of High – Yielding Varieties ( HYVs ) of seeds, the extensive use of fertilizers, exploitation of irrigation potential and soil conservation was put into action to tide – over the crisis in agricultural production.
• During the Annual Plans, the economy basically absorbed the shocks given during the Third Plan, making way for a planned growth.

Fourth Five Year Plan India (1969 – 74 )

• The Fourth Plan set before itself the two principal objectives – growth with stability and progress towards self – reliance.
• Main emphasis on agriculture’s growth rate so that a chain reaction can start.
• Fared well in the first 2 Years with record production, last 3 Years failure because of poor monsoon.
• Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo – Pak war.
• During the planning period, prices increased by about 61%.

Fifth Five Year Plan of India ( 1974 – 79 )

• The Fifth Plan prepared and launched by DD Dhar proposed to achieve two main objectives vizard, ‘Removal of Poverty’ ( Garibi Hatao ) and ‘Attainment of Self Reliance’, through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings.
• National Program of Minimum needs was initiated in which Primary Education, Drinking Water; Medical facilities in rural areas, Nourishing Food, Land for the Houses of Landless Labourers, Rural Roads, Electrification of the Villages and Cleanliness of the dirty suburbs were included.
• The plan was terminated in 1978 ( instead of 1979 ) when Janta Government, came to power.

Rolling Plan in India ( 1978 – 80 )

• There were 2 Sixth Plans – One by Janta Government ( for 78 – 83 ) which was in operation for 2 Years only and the other by the Congress Government when it returned to power in 1980. The Janta Government Plan is also called ‘Rolling Plan’.
• The focus of the plan was enlargement of the employment potential in agriculture and allied activities, encouragement to household and small industries producing consumer goods for consumption and to raise the incomes of the lowest income classes through minimum needs program.

Sixth Five Year Plan (1980 – 85)

Objectives :

• Increase in National Income, Modernization of Technology, Ensuring continuous decrease in Poverty and Unemployment, Population Control through Family Planning, etc.

Seventh Five Year Plan ( 1985 – 90 )

• The Seventh Plan emphasized policies and programs which aimed at rapid growth in food – grains production, increased employment opportunities and productivity within the framework of basic tenants of planning.
• It was a great success, the economy recorded 6% growth rate against the targeted 5%.

Eighth Five Year Plan of India ( 1992 – 97 )

• The Eighth Plan was postponed by 2 Years because of political upheavals at the Centre and it was launched after a worsening Balance of Payment ( BoP ) position inflation during 1990 – 91.
• The plan undertook various drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6%.
• Some of the main economic performances during Eighth Plan period were rapid economic growth, high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit.
• The most notable feature of the Eighth Plan period was that the GDP grew at an average rate of 6.8% exceeding the target growth rate of 5.6%.

Ninth Five-Year Plan (1997–2002)

• runs through the period from 1997 to 2002 with the main aim of attaining objectives like speedy industrialization, human development, full-scale employment, poverty reduction, and self-reliance on domestic resources.

Main objectives

• to prioritize agricultural sector and emphasize on the rural development
• to generate adequate employment opportunities and promote poverty reduction
• to stabilize the prices in order to accelerate the growth rate of the economy
• to ensure food and nutritional security.
• to provide for the basic infrastructural facilities like education for all, safe drinking water, primary health care, transport, energy
• to check the growing population increase
• to encourage social issues like women empowerment, conservation of certain benefits for the Special Groups of the society
• to create a liberal market for increase in private investments
  • During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the target GDP growth of 6.5 per cent. 

Tenth Five-Year Plan (2002–2007)

• Attain 8% GDP growth per year.
• Reduction of poverty ratio by 5 percentage points 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.
• 20 point program was introduced.
• Target growth:8.1% Growth achieved:7.7%

Eleventh Five-Year Plan (2007–2012)

objectives

Income & Poverty

• Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016–17
• Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits
• Create 70 million new work opportunities.
• Reduce educated unemployment to below 5%.
• Raise real wage rate of unskilled workers by 20 percent.
• Reduce the headcount ratio of consumption poverty by 10 percentage points.

Education

• Reduce dropout rates of children from elementary school from 52.2% in 2003–04 to 20% by 2011–12
• Develop minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality
• Increase literacy rate for persons of age 7 years or above to 85%
• Lower gender gap in literacy to 10 percentage point
• Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the plan

Health

• Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births
• Reduce Total Fertility Rate to 2.1
• Provide clean drinking water for all by 2009 and ensure that there are no slip-backs
• Reduce malnutrition among children of age group 0–3 to half its present level
• Reduce anaemia among women and girls by 50% by the end of the plan

Women and Children

• Raise the sex ratio for age group 0–6 to 935 by 2011–12 and to 950 by 2016–17
• Ensure that at least 33 percent of the direct and indirect beneficiaries of all government schemes are women and girl children
• Ensure that all children enjoy a safe childhood, without any compulsion to work

Infrastructure

• Ensure electricity connection to all villages and BPL households by 2009 and round-the-clock power.
• Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015
• Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012
• Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016–17

Environment

• Increase forest and tree cover by 5 percentage points.
• Attain WHO standards of air quality in all major cities by 2011–12.
• Treat all urban waste water by 2011–12 to clean river waters.
• Increase energy efficiency by 20%
• Target growth:8.33% Growth achieved:7.9%