1st Five Year Plan

1st Five Year PlanTHE FIVE YEAR PLAN IN OUTLINE

The Five Year Plan involves an outlay on development by public authorities of Rs. 2069 crores over the period of 1951—56. In determining this target of expenditure, the main considerations that have been taken into account are :

1. The need for initiating a process of development that will form the basis of the much larger effort needed in the future ;

2. The total resources likely to be available to the country for the purpose of development ;3. The close relationship between the rates of development and the requirements of resources in

the public and in the private sectors 4. The necessity of completing the schemes of development initiated by the Central and State

Governments prior to the commencement of the Plan ; and 5. The need to correct the maladjustments in the economy caused by the war and the partition.

2. Our approach to planning and the long-term targets of investment and income to be aimed at have been set forth in the earlier chapters. The vast and complex problems of structural and institutional re-organisation that an effort of the required magnitude will raise have also been touched upon. Viewed against this background, the Five Year Plan is essentially a plan of preparation for laying the foundation for more rapid development in the future. The targets of investment which the Plan sets, as well as the increases in production which are expected to be achieved thereby, are modest when compared to what has to be achieved within the next twenty years or so but, it must be emphasised, both are high compared to past trends.

Priorities And The Pattern Of Outlay

3. The distribution of expenditure in the development programme of the public sector is summarised in the following Table :

Rs. crores Per cent of totalAgriculture and Community Development 361 17-5Irrigation 168 8-1Multi-purpose Irrigation and Power Projects . 266 12-9Power 127 6-1Transport and Communications 497 24.0Industry 173 8-4Social Services 340 16-4Rehabilitation 85 4-1Others 52 2-5

2069 100-0

This distribution reflects the priorities discussed in Chapter II. In the present Plan period, agricultural development receives the highest precedence, which necessitates an extensive programme of irrigation covering minor as well as major projects. Generation of electric power, which is linked in most cases with the major irrigation projects, has also a high priority in its own right. Production and extensive distribution of electrical energy on a large scale is essential not only for the growth of small scale enterprises and for rural development in the larger sense of the term but for industrial expansion. In regard to transport,

public authorities have a special responsibility. The railways are a nationalised enterprise which has to respond to the needs of development in both argiculture and industry. The State has further to take the initiative in linking up the whole country through a system of roads reaching down to the village, and in promoting development in new lines like shipping and aviation.

4. The high priority given to agriculture (which as mentioned above, involves large scale investment in irrigation) as well as to basic services like power and transportation limits inevitably the investment which the public sector can itself undertake in industries. Industrial expansion in this five year period will rest largely on private initiative and resources, but they will be supplemented at certain points by the resources of the public sector as well as by foreign investment; programmes of the public and the private sectors together will not therefore be inconsiderable. In the sphere of social services, the needs are so large that what can be achieved through financial investment by public authorities is limited. In the present Plan, the rehabilitation of displaced persons absorbs a considerable proportion of the additional resources available for expansion of social services. The financial investment in social services has to be supplemented by direct community effort on a large scale for the liquidation of illiteracy, improvement of sanitation and hygiene, development of civic services, imparting of elementary technical training, etc. The lump-sum provisions in the Plan for the community development programme and for local works are designed, among other things, to evoke such community effort.

5. The significance of the outlay of Rs. 2,069 crores from the point of view of the additions it will make to productive equipment in the public and private sectors, and to the production potential of the community in the larger sense of the term, will perhaps be clearer from the following rough classification :

(Rs. crores)

(i) Outlay which will add to the stock of productive capital owned by Central and State Governments

1.199

(2) Outlay which will contribute to building up productive capital in the private sector—

(i)Expenditure on agriculture and rural development (excluding community projects and provision for scarcity affected areas)

244

(ii Loans for transport and industry 47

(iii) Provision for stimulating local development (community projects and local works)

105

(3) Outlay on social capital 425(4) Outlay unclassified above (including provision for scarcity

affected areas) 49

total 2,069

It will be seen that nearly 60 per cent. of the planned outlay will result directly in the creation of productive capital in the ownership of the Central and State Governments ; this will be mainly under irrigation and power, transport and communications, and industry. The remaining 40 per cent will partly add to productive equipment in the private sector, partly provide assistance in the form of working capital or of advisory and administrative services, partly help to maintain and expand social services, and partly act as an incentive for community effort in development.

Distribution And Phasing Of Expenditure

6. A break-up of the development expenditure of the Central and State Governments by major categories is given in the statements attached at the end of this Chapter. The distribution of the total outlay as between the Central and the State Governments is summarised below :—

(Rs. crores)

Central Government (including railways) 1,241States : Part A 610PartB 173Part C 32Jammu and Kashmir 13total 2,069

7. According to the above classification, the outlay of the Central Government (including the railways) works out to almost 60 per cent. of the total. It must be emphasised that this distribution of outlay is not an indication of the schemes which fall within the respective spheres of the Centre and the States. The 'central' multi-purpose river valley schemes (i.e., the Damodar Valley, Bhakra-Nangal, Hirakud, and Harike projects) are really the schemes of the State Governments, but in view of the fact that the territorial coverage of these projects extends in some cases over two or three States, the exact distribution of the financial liability as between them cannot be foreseen at this stage. The responsibility of finding the necessary finance for these schemes in the form of loans to State Governments also rests initially on the Centre. In regard to certain other schemes, the sharing of the financial responsibility has yet to be finally determined. For these and similar reasons the provisions in the Plan for community projects, minor irrigation and other local works, the five new major irrigation and power projects, scarcity affected areas, rehabilitation of displaced persons, basic and social education, industrial housing, etc., are shown as part of the Central Government's development programme, though they belong primarily to the States.

8. It is in the light of these observations that the distribution of the total planned outlay as between the Centre and tlie States, and the allocation of this outlay as between the major developmental heads, has to be seen. The following table summarises tlic outlay of the Centre and of the States (excluding Jammu and Kashmir) under various heads :

(Rs. crores)

Centre Part A PanB PartCAgriculture and Community Development 186-3 127-3 37-6 8-7Irrigation and Power 265-9 206-1I 81-5 3-5Transport and Communications 409-5 56-5 17-4 8-8Industry 146-7 17-9 7-1 0-5Social Services including Rehabilitation 191-4 192-3 28-9 10-4Miscellaneous 40-7 10-0 0-7total 1240-5 610.1 173-2 31-9

9. The outlay proposed in the development programmes of States other than Jammu and Kashmir is shown below :

State Plans(Rs. crores)part A states part B states part C states Assam 17-49 Hyderabad 41-55 Ajmer 1-57Bihar 57-29 Madhya Bharat 22-42 Bhopal 3-90Bombay 146-44 Mysore . 36-60 Bilaspur 0-57

Madhya Pradesh 43-o8 Pepsu . 8-14 Coorg 0-73Madras 140"84 Rajasthan 16-82 Delhi 7-48Orissa 17-84 Saurashtra 20-41 Hirnachal Pradesh 4-55Punjab 20-21 Travancore- Coch in 27-32 Kutch 3-05Uttar Pradesh 97-83 Manipur 1-55

W. Bengal 69.10 Tripura 2-07

Vindhya Pradesh 6-39

total 610-12 173-26 31-86

These State Plans were drawn up initially over a year ago in consultation with the State Governments concerned and on the basis of forecasts supplied by them regarding their likely revenues and expenditures in the period of the Plan. In cases where the State Governments made proposals subsequent!/ to raise the size of their State Plans, the upward revisions have been accepted provisionally subject to the resources corresponding to them being raised by the governments concerned.

10. The financial basis of the Plan has been discussed in detail in Chapter III. A rough picture of the estimates in relation to the development programmes can be had from the following summary table :

(Rs. crores)

Central Government States (including Jammu and Kashmir)

Total

Planned Outlay on Development 1,241 828 2,069Budgetary Resources—(i) Savings from current revenues 330 408 738(ii) Capital receipts (excluding withdrawals from reserves)

396 124 520

(iii) Internal inter-governmental transfers in connection with the Plan {i.e., " Central assistance ")

(-) 229* 229*

497 761 1,258

External Resources already received

156 156

total 653 76l 1,414

As brought out in the assessment of financial resources for the Plan, the balance of Rs. 655 crores necessary for the public development programme will have to be found from further external resources that may be forthcoming or from internal taxation and borrowing as far as possible and by deficit-financing.

II. In the phasing of development expenditures originally proposed by many of the States there was on the whole a somewhat excessive concentration of outlay in the first two years of the Plan. This was in some cases inevitable in that it only reflected the rising tempo of expenditures towards the culminating stages of certain schemes already under implementation. The actual progress of expenditure (as indicated by the revised budgets for 1951-52 and the budget estimates for 1952-53) shows that the concentration of expenditures in the first two years originally proposed has already been corrected to a great extent. It is, however, clear that in 1953-54 expenditures on a number of schemes under implementation will reach their peak levels and that there would be in consequense a heavy pressure on resources both at the Centre and at the States. New schemes which can be postponed without detriment should not therefore

be taken up in this year. In so far as can be foreseen at this stage, there will be scope for starting work on new schemes, which involve large expenditures once they are undertaken, only towards 1954-55 and in 1955-56.

* Includes Rs. 4 crores by way of statutory grants for scheduled tribes which will be available for part of the development expenditure on scheduled tribes in the Assam State Plan.

Appraisal Of The Programme In The Plan

12. In appraising the results of the Plan, the development programme in the public sector cannot be taken by itself. This progamme, as mentioned earlier, is based on an appraisal of the needs of the economy as a whole and is related to an assessment of the effort that is likely to be forthcoming from the private sector. In the case of agriculture, where the problem is primarily one of providing irrigation, fertilisers and manures, better seeds, as well as extension services which will carry to the farmer the know-how ofti-chnical improvements, the supplemental investment required would to a great extent be in the form of direct contributions of labour by the farmers themselves. In the sphere of industrial development, we have taken into account the working plans of 40 large and medium scale industries which cover about two-thirds of the total output of factory enterprises in the country. Approximate estimates regarding the likely requirements of manufacturing industries and of the likely sources of finance are shown elsewhere in this Report. The results of the Plan can thus be viewed within a wider setting as far as agriculture and manufacturing industry are concerned. In other spheres of development, particularly in respect of professions and services and small-scale enterprises in transport and industry, only broad judgements can be made at this stage. The contribution that community effort may make to extension of education, sanitation, communications, etc. cannot also be assessed in advance in precise terms. In the paragraphs that follow are outlined the salient features of the development programmes in the public and private sectors ; their results in terms of certain select targets and indices are shown in the statement below :—

1950-51 1955-56I. AgricultureFoodgrains* (million tons) 52-7 6i-6Cotton (lakh bales) 29-7 42-2Jute (lakh bales) 33-0 53-9Sugarcane (million tons) 5-6 6-3Oilseeds (million tons) 5-1 5-5II. Irrigation and PowerMajor irrigation (million acres) Minor irrigation (million acres) J"

50.0 69 -7

Electrical energy (installed capacity in million kws) 2-3 3-5III. IndustryIron and Steel(lakh tons)Pig iron available for foundries 3-5 6-6Finished Steel 9-8 13-7Cement (lakh tons) 26-9 48-0Aluminium (thousand tons) 3-7 12-0

* Including gram and pulses. Output in 1949-50 (used as the hire tor fixing the target for 1955-56) was 54.0 million tons.

1950-51 1955-56

Fertilisers (thousand tons) Ammonium sulphate 46-3 40-0Superphosphate 55-1 180-0Locomotives (Nos.) 150-0

Machine tools (Nos. in thousands) 1.1 4.6Petroleum refining Liquid petroleum (million gallons) N. A. 403-0Bitumen (thousand tons) N. A. 37-5Cotton manufactures Yam (million Ibs.) 1179 1640Mill cloth (million yards) 37l8 4700Handloom (million yards) 810 1700Jute manufactures (thousand tons) 892 1200Agricultural machinery (a) Pumps, powerdriven (thousands) 343 85,0(fe) Diesel engines (thousands) 55 50-0Bicycles (thousands) 530-0

Power alcohol (million gallons) 4'7 18-0IV. Transport Shipping (tonnage) Coastal (grt thousands) 210 315-0Overseas (grt thousands) 173-5 283 .0Roads National Highways (thousand miles) 9 12-5State Roads (thousand miles) 17-6 20-6V. Education* Pupils in : Primary schools (lakhs) 151-1 9Junior Basic schools (lakhs) . 29-0 52-8Secondary schools (lakhs) 43'9 57-8Industrial schools (thousands) 148 21-8Other technical and vocational training schools (thousands) 26-7 43 -6VI. Health Hospitals (beds in thousands) 106.5 117-2Dispensaries (number) Urban 1358 1615Rural 5229 5840

These estimates do not cover (except in respect of industrial schools), Hyderabad, Rajasthan, Ajmer and Vindhya Pradesh. In so.-ne cas.:s, data for a few States (e. Uttar Praiesh in respect of primary schools and Madhya Pradesh in the case of junior basic, and secondary schools) are also not covered in these estimates.

VII. Developmental Institutions Panchayats (thousands) 55-1 69-1Co-operative societies* Credit (thousands) 87-8 112-5Sale and marketing (thousands) l4'7 20'7Multipurpose (thousands) 31-5 40*5Lift irrigation (Nos.) 192-0 514.0Co-operative farming (Nos.) 352-0 975.0Others (thousands) 27-3 35-8Total (thousands) 161-9 211-1

Agriculture And Community Development

13. Agriculture and community development is a comprehensive description for several items of reconstruction which include, besides agricultural production, livestock improvement and dairying, forests and soil conservation, co-operation and village panchayats. The Plan makes a total provision of about Rs. 361 crores of which Rs. 184 crores is for agriculture, a little over Rs. 100 crores for community projects and rural development, Rs. 22 crores for animal husbandry and dairying, Rs. 15 crores for stimulating local development through the agency of local authorities, another Rs. 15 crores for development programmes in scarcity-affected areas, and Rs. 12 crores for forests and soil conservation. The role of the Central Government is to co-ordinate the programmes of the States and also to assist them in certain important respects. The Central Government's plan provides for the establishment of a national extension organisation, completion of the present programmes of the Central Tractor Organisation, schemes for the improvement of livestock, measures for soil conservation as well as for co-operative training, for experiments in co-operative farming and other aspects of co-operative organisation. The Technical Co-operation Programme initiated this year has strengthened considerably the programmes for tubewell development, marine fisheries, locust control and the training of extension workers.

14. The programme for increasing agricultural production covers foodgrains as well as cotton, jute, sugar-cane, and oilseeds. In foodgrains, the target for 1955-56 represents an increase of about 14 per cent over the level in 1949-50.! In the case of cotton and jute, production is expected to go up by over 42 per cent and 63 per cent respectively above the level in 1950-51, while the increases in sugar-cane and oilseeds are estimated at about 13 per cent and 8 per cent respectively. It might be mentioned here that, in 1951-52, the production of cotton was 33 lakh bales as compared to 29 -7 lakh bales in 1950-51 and the target of 42 -3 lakh bales by 1955-56. Jute production in 1951-52 v.'as 47 lakh bales—an increase of 14 lakh bales over 1950-51; the additional production now to be secured in terms of the target works out therefore at only 7 lakh bales. Foodgrains production for 1951-52, as shown by official figures was about the same as in the previous year and it is here that special effort is now called for. The detailed programmes for achieving the food targets, formulated initially in 1950-51 in consultation with the State Governments, were reappraised in early 1952. Following this reappraisal the original target of 7 -2 million tons in the State Plans had to be lowered to 6-0 million tons. The programmes have therefore been strengthened by an additional lump-sum provision of Rs. 30 erodes for minor irrigation.

15. The community development projects, which are conceived primarily as a programme of intensive development of selected areas, would also contribute to raising the level of agricultural production. A beginning has been made this year with 55 projects. The central object of the community development programme is to mobilise local manpower for a concerted and co-ordinated effort at raising the whole level of rural life. The emphasis is inevitably on improving the level of agricultural productivity. Trys is reflected in the fact that the bulk of the projected expenditure is devoted to the provision of irrigation, land development and extension services. The community development projects represent in content a synthesis of ideas gathered from rural development work in various parts of the country. As further experience is gathered, changes in structure and emphasis may be 'essary, but the intention is to cover

the entire country with schemes designed to promote ;ntensive development through increased agricultural productivity. The Five Year Plan makes a lump-sum provision ofRs. 90 crores for such development. There is, in addition about Rs. locroresinthe State Plans for other programmes of rural development, including schemes designed to promote and strengthen village panchayats.

16. Elsewhere in this Report is also a scheme for a national extension service for agricultural development ; there is provision ofRs. 3 crores for this in the Plan. This organisation, together with community development projects and the additional minor irrigation visualised, will help to step up the production offoodgrains in the country by 7-6 million tons compared to the level in 1949-50.

17. In the period of this Plan, some parts of the country may not stand to benefit directly from the various development schemes taken up. In order that the Plan creates interest on the part of as wide a section of the community as possible, and in order to draw forth local initiative and resources, a lump-sum provision ofRs. 15 crores is being made in the Plan for local development works. It is hoped that schemes will be forthcoming from municipalities, district and taluka boards and other local bodies for which financial assistance can be given out of this lump-sum provision to attract and organise local resources on a multiplied scale. There is also a special provision ofRs. 15 crores in the Plan for organising relief activities in scarcity-affected areas on developmental lines.

Irrigation And Power Programmes

18. The programme for irrigation and power is based primarily on projects initiated in the period prior to the Plan. The total cost on the projects thus taken over into the Plan has been estimated at Rs. 765 crores, of which an expenditure ofRs. 153 crores had already been incurred up to the end of 1950-51. The provision for these projects in the period of the Plan is Rs. 518 crores, leaving only a little under Rs. 100 crores to be spent in the subsequent years. The progress made on these projects will help, within the period of the Plan, to bring an additional area of 8 • 5 million acres under irrigation and to generate i • i million kws of additional power. On the completion and full development of these projects, the total addition to the area irrigated will be 16-9 million acres and to power i -4 million kws.

19. In view of the high priority given to agriculture, the construction of the projects in hand has been so adjusted as to facilitate the maximum extension of irrigation in this period. The generation of power has been related to the demand that already exists or is likely to grow in the near future. Provision is however being made in the design of dams and other works for installing additional units as and when additional demands rise.

20. Of the provision ofRs. 518 crores in the Plan on projects in progress, well over half will fall in the first three years of the Plan. During this period the pressure on financial as well as technical resources will prevent work being started on new projects. There will be scope for such additions only as from 1954-55. The five new irrigation and power projects which are proposed to be taken up towards the later stages of the Plan are the following: Kosi (Stage I), Koyna (Stage I), Krishna (the scope of which is not yet defined), Chambal (Stage I) and Rihand. The total cost of these projects will be well over Rs. 200 crores, out of which it is expected that it might be possible to spend Rs. 40 crores during the period of the Plan.

21. The programme for irrigation and power in the Plan,* taking projects in progress as well as the new projects proposed, has to be viewed as part of a more long-term programme intended to add, within the next two decades, 40-45 million acres to the area now under irrigation and 7 million kws. to the existing power generating capacity.

22. The irrigation and power benefits from the major projects in the period of the Plan will be supplemented by the results of the minor irrigation programme and by the extension schemes of private electricity undertakings. The minor irrigation programme in the Plan, involving an expenditure of Rs. 77 crores, is as follows:—

Area benefited

(million acres)

Dams and channels 4.4New wells 1.1Repairs and derelict wells 0.5Tubewells (other than those included in the major irrigation programme)

0.7

Tanks 0.8Pumping installations 0.7Schemes in respect of the additional provision for minor irri ration .

3-0

11.2

*The Plan includes, in addition to the items mentioned, ;i provr-'on of Rs. 2 crores for carrying out investigations into development possibilities in irrigation and power.

As regards power, the extension projects of private electricity undertakings will add 176.,00 kws of installed capacity in the period of the Plan.

23. There are parts of the country in which scope exists for large irrigation projects and there are others in which only smaller projects are possible. Each area has to be served by the kind of schemes for which it offers the best facilities. Large and small projects are thus complementary and not competitive. The Plan includes eight irrigation projects (including multi-purpose projects but excluding new major irrigation projects mentioned in para 20) costing above Rs. 5 crores each, sixteen costing between Rs. crore and Rs. 5 crores, twenty-one costing between Rs. 50 lakhs and Rs. i crore, and twenty-seven schemes costing between Rs. 10 lakhs and Rs. 50 lakhs.

24. Rural electrification has so far made little progress in the country, only i in about 200 villages being served with electricity. The Plan makes a provision of Rs. 27 crores for extending rural electrification. This programme is mainly confined to the Southern States of Madras, Mysore and Travancore-Cochin, but the scope for rural electrification will undoubtedly grow as more power becomes available in other areas of the country. Electricity will be useful not only for agricultural operations like pumping, but also for the processing of agricultural produce and for other cottage and small-scale industries in the villages. There is also a special advantage in the encouragement of agricultural load since utilization of power in agriculture is estimated to require only about one-third the investment required in industry. Moreover, most of the equipment required for utilization of power in agriculture can be produced in the country and its operation does not require technical skill of a high order.

Industrial Development

25. The expenditure on Industry, as shown in the development programmes of the public sector, is Rs. 173 crores ; this covers Rs. 140 crores to be spent on large-scale industries and ancillary transport expansion, Rs. 27 crores on cottage and small-scale industries, and about Rs. 6 crores on mineral development and scientific and industrial research. Some of the industrial schemes in the public sector are, however, shown under other heads. For instance, the Chittaranjan locomotive factory and the all-steel coach factory are part of the development plan for railways. The net investment in manufacturing industries figuring in the public development programme taken as a whole, but excluding a lump-sum provision of Rs. 50 crores for basic industries and transport (about which more will be said below), is Rs. 94 crores over the five years. Investment in the private sector on expansion of industries and on modernisation and replacement is likely to be of the order of Rs. 383 crores. The total investment on industrial development in this period can thus be placed at Rs. 477 crores.

26. The development programme in the public sector provides for a new iron and steel project estimated to cost Rs. 80 crores over a period of six years from the date of commencement ; the expenditure in the period of the Plan, estimated at Rs. 30 crores, is to be financed partly by Government and partly by private enterprise. Most of the industrial projects in hand in the public sector will be completed by 1953-54. The Sindri fertiliser factory has commenced production and it is expected that it will shortly reach a monthly rate of output of 1,000 tons of ammonium sulphate. With the estimated production of 120 locomotives a year in the Chittaranjan locomotive factory by 1957 (production in 1955-56 will be 100 locomotives) and the estimated output of 50 locomotives at the Tata Locomotive and Engineering Company, the railways will be able to secure their normal annual replacement requirements of locomotives almost entirely from domestic production. The production of high precision machine-tools, telephone equipment, dry core cables, and newsprint envisaged in the Plan will also strengthen the industrial structure.

27. The rate of investment, and therefore of development in this sector as a whole, will depend however primarily on the implementation of the working plans of private industries outlined in this Report.* These plans, drawn up in consultation with the representatives of the industries concerned, aim at expanding the installed capacity of several capital and producer goods industries and, in the case of consumer goods industries, primarily at utilising more fully the existing capacity. Over the five-year period, the production of heavy chemicals is expected to go up by 156,000 tons, of fertilisers by 528,600 tons, of pig iron by 310,000 tons, of steel by 394,000 tons, and of cement by 2 • i million tons. The output of consumer goods industries is also estimated to increase considerably; the production of cloth is scheduled to go up by 1,872 million yards, of sugar by 384,000 tons', of salt by 429,000 tons and of vegetable oils by 182,000 tons. The output of a number of light engineering industries is also expected to register substantial improvement. It will be the objective of Government policy to assist the private sector to the extent possible in the creation and maintenance cf conditions favourable to the attainment of the targets proposed.

28. As the development programme gets into swing and the emphasis is shifted increasingly towards industrialisation, it will become necessary to expand basic industries like iron and steel, heavy chemicals, manufacture of electrical equipment and the like. In these fields, as emphasised in Chapter II, it is necessary to anticipate to some extent the nature of the demands that will develop and make a beginning from the very start. The Plan therefore has a lump-sum provision of Rs. 50 crores for the development of basic industries and ancillary transport. This includes a provision for organising mineral exports. Part of the lu;ip-sum provision ofRs. 50 crores, it is expected, will be available for initiating the construction of a unit for the'manufacture of electrical equipment to meet the needs of power development in the country.

29. An extensive programme for village industries prepared primarily with the object of increasing rural employment has been included in the Plan. The programme includes, amongst others, the following industries: khadi, coir, village oil, matches, leather, hand-made paper, gur and khandsari, palm gur, woollen blankets ind bee-keeping. The khadi programme is to be financed by means of a small cess on mill-made cloth. A small cess lias also been proposed on mill oil for the benefit of the village oil industry. Common production programmes have been proposed for a number of cottage and small scale industries along with the related large scale industries. For instance, as part of the programme for the textile industry the output of the handloom industry is expected to be doubled. The establishment of a Khadi and Village Industries Development Board by the Central Government is being recommended. The Board which will have large executive functions, is to be responsible for initiating village industry programmes in co-operation with State Governments and other organisations engaged in the field of village industries. The total provision in the Plan for cottage and small scale industries is Rs. 27 crores.

Transport And Communications

30. In the programme for Transport and Communications, a little more than half of the total outlay is on railways. This outlay is designed to meet the arrears in replacement accumulated over a long period (particularly during the War) and to equip the railways with the minimum equipment and installations necessary to carry the additional load which will be placed on it as a result of development in other

sectors of the economy. At the beginning of 1951-52, about 12 per cent of the locomotives, 28 per cent of the coaches and over 10 per cent of the wagons in use were due for renewal'; to meet the existing level of traffic these had to be retained in service. Considerable lengths of the track were also in need of repair and restoration. The Plan provides for an expenditure ofRs. 50 crores per annum on railways in addition to Rs. 30 crores per annum estimated as required for meeting the current depreciation of railway installations and equipment. This will enable a few of the more urgent extensions to be undertaken, but the total provision for new lines over the five years is only about Rs. 20 crores and so the programme for railways must be regarded primarily as one of rehabilitation.

31. The total provision for road development in the Centre and the States together amounts to over Rs. 100 crores. Of this, about a quarter will be on the development of national highways, and the rest mainly on State roads. The provision for-road development includes also a sum ofRs.2 crores for the construction of the Ganga Bridge which will provide a needed link between North and South Bihar. Road development is a sphere which offers considerable scope for mobilisation of local manpower and local materials. In certain States, village roads are already being developed with the active co-operation of villagers who contribute a portion of the cost of construction by way of free labour, free gift of land or money, with the balance being contributed by State Governments or District Boards. With the projects for local and intensive development visualised in the Plan, it is estimated that approximately 16,000 to 17,000 miles of village roads could be constructed through community effort within this period. This mode of development has to be extended as rapidly as possible to cover the entire country.

32. As in the case of railways, ports are in need of attention to meet the immediate needs of expansion in other sectors of the economy. Apart from the fact that there is at present no reserve capacity in the five major ports of the country for handling normal increases in seaborne trade, port development is necessary to meet the following needs : (a) for rectifying the consequences of Partition and for providing a natural outlet for the traffic previously catered for by Karachi; (b) for the renovation and modernisation of equipment in the existing ports, and (c) for providing facilities for the petroleum refineries which are proposed to be set up. The Plan provides for Rs. 12 crores for the construction of a new port at Kandia, Rs. 8 crores for the creation of port facilities for oil refineries, and another Rs. 12 crores as loans to port authorities for carrying out a programme of rehabilitation and modernisation.

33. The Plan also visualises development in certain relatively new lines of transport, of which shipping is the most important. The programme for the development of shipping is designed primarily to enable the coastal trade of the country to be reserved for Indian vessels and to ensure their fuller participation in overseas trade. With these in view, the Plan makes provision for construction of additional berths in the Visakhapatnam shipyard, which will not only make available about 100,000 G.R.T. for coastal shipping during this period, but also help to reduce the costs of construction. In addition, there is provision in the Plan for loans to shipping companies for acquiring additional tonnage for overseas trade.

34. Civil aviation is another new line of development. It has been found that under the present conditions of traffic loads and intensity of operations, the existing air transport companies cannot work on an economic basis, and that to ensure such working they should merge into a single unit owned and operated by the Central Government. Integration of existing airlines along these lines has been decided upon and a State Corporation is to be set up for the purpose. It is proposed to give the shareholders of existing companies stock with guaranteed interest in return for their present holdings. The necessary legislation will be undertaken shortly. The Plan provides for a sum of Rs. 9-5 crores for purchase of new aircraft and for payment of compensation to existing air companies.

35. In the field of broadcasting, the new installations which are proposed to be taken up under the Plan would increase the area covered by medium wave broadcasts from 117,000 to 370,000 sq. miles. This would double the population covered by the broadcasting services, the population expected to be served by 1955-56 being of the order of 170 million people. Further, the development programme would also augment to a considerable extent the national and international services on shortwaves.

Social Services And Rehabilitation

36. The Plan provides for a total expenditure ofRs. 340 crores on social services of which Rs. 152 crores are for education, about Rs. 100 crores for medical and public health services, Rs. 49 crores for housing, Rs. 29 crores for backward classes (including scheduled castes and tribes), and nearly Rs. 7 crores for labour and labour welfare. There is a further provision of Rs. 4 crores for assistance to voluntary social welfare prganisations so that their work can be expanded and dovetailed into the national development programme. In the States, the Plan contemplates only a limited measure of expansion in social services. At the Centre there is a provision of Rs. 20 crores for further development in the field of pre-university education. The average annual expenditure proposed under education represents an increase of nearly 55 per cent over the development expenditure in 1950-51. This would lead to a certain amount of expansion of educational facilities in the States' sector. The number of pupils attending primary, junior basic, secondary and technical and vocational (other than industrial) schools is expected to increase by 25, 8i, 32 and 63 per cent respectively as compared to 1950-51. In the sphere of health, the Centre has a programme for malaria control which will be co-ordinated with the programmes of the States ; the programme is intended to protect about 200 milion people in rural areas through insecticidal spraying measures. The Plan provides also for the construction of two D. D. T. plants in order to ensure sufficient supply of D. D. T. at reduced costs to meet the needs of the country. The State Plans provide for an expenditure on public health of Rs. 39 crores ; this expenditure, which will be mainly on provision of water supply and drainage, will involve almost a trebl-ing of the existing rate of expenditure under this head. With the introduction of the scheme of provident funds for industrial workers in six industries, it has been possible to frame a programme for the construction of about 150,000 houses for industrial workers at a cost of about Rs. 38-5 crores. In addition, some States have their own housing schemes for low income groups ; the total cost of the housing programme is about Rs. 49 crores. The Plan has also a programme of amelioration for backward classes. In addition to the provision of Rs. 29 crores shown in the Plan, the Central Government is estimated to provide in the form of statutory grants a further sum of about Rs. 9 crores for the development of scheduled tribes. The programme for the rehabilitation of displaced persons, for which a provision of Rs. 85 crores has been made in the Plan, covers a period of three years ending 1953-54. The position regarding migrants across the eastern border is still somewhat fluid. For some time to come the problem of relief of those who have newly arrived may therefore continue ro be a major concern of the Government.

Assessment Of The Plan In Terms Of Income And Employment

37. A programme of development will, in the last analysis, be judged in tern-is of the improvement it is able to make to the welfare of the community. The usual indices of welfare are income, consumption and employment. With the available data only a broad assessment of the Plan in these terms is possible. There are large gaps in the information available even on the existing position. National income statistics are still in their infancy. Little is known about the distribution of income and wealth in the country. Apart from a general picture derived from the Census returns, the data available on the occupational pattern are meagre. We do not also have sufficient knowledge of the relationships between the different sectors of the economy and how they interact on each other. In a period of development, the changes in all these are likely to be of great significance.

38. The national income of India in 1950-51 has been roughly estimated at Rs. 9,000 crores. As a result of the increases in production expected to materialise by the end of the Plan, the national income (at constant prices) is expected to go up to Rs. 10,000 crores, that is, by 11 per cent. The benefits of the investment outlays undertaken during the period of the Plan will not be fully realised in this period. For instance, a. considerable part of the additional irrigation and power facilities on account of schemes included in the Plan will appear only in the following quinquennium, though the greater part of the investment necessary will have taken place in the present Plan period.

39. To the extent that the community development projects, and the other schemes in the Plan designed to stimulate local initiative and resources, succeed in evoking community effort on a large scale, the increase in national income can be expected to be larger. In specific areas, direct application of manpower and other resources and concentrated efforts for increasing product vity could raise incomes by 25 per cent or more. The scale on which such effort can be organised will determine to a considerable

degree, particularly in the countryside, the rate of development that will be achieved and the contribution it makes to the welfare of the community at large.

40. Out of the annual rate of increase of about 2 per cent in national income, about one-fifth will have to be, so to say, ploughed back into investment year after year in irder to sustain the development programme at the rate visualised in the Plan. The aggregate consumption expenditure will therefore rise at a somewhat lower rate than the nationa income. Although the Plan will meet in this period only the most urgent needs of the people, for instance in the matter of food and clothing, it will have made a substantial addition to the production potential of the country.

41. In judging the likely effects of the Plan on employment, it is necessary to bear in mind that the problem in India is more one of underemployment rather than of unemployment as such. Underemployment is another facet of low productivity, which in turn is due to shortage, of capital equipment and technical skill. The problem of removing under employment and of opening up employment opportunities for all at rising levels of real income is, therefore, in a sense, synonymous with the problem of development itself. The contribution that the Plan will make to the solution of the problem will be two-fold : firstly, in the process of stepping up the rate of investment it will create more employment for those engaged on construction activity, and, secondly, by building up capital at key points in the system, it will, at the next stage, enable a growing number of people to be absorbed into the productive system.

42. The Plan involves doubling -the development expenditure of public authorities, from Rs. 232 crores in 1950-51 to nearly Rs. 500 crores by 1955-56 , on a broad estimate about a half of this increase might be expected to be paid as so much additional wages and salaries. In the private sector, the largest investment activity is in residential construction. There are no data available on the volume of building activity in the country, but certain rough estimates, based on the allocations of materials like cement and steel and the cost of building covered by them, suggest that net private investment on constructions using these materials was probably of the order of Rs. 100 crores in 1950-51. Over the period of the Plan, the output of cement and steel is expected to go up by about 80 per cent and 40 percent respectively. No doubt, some of these increases will be absorbed by the development outlay of public authorities, but the additions to construction activity in the private sector which the larger output of cement and steel can sustain may still be considerable.

43. The secondary effects of investment on employment would take more time to show, but they are likely to be more impressive. This is particularly true in the earlier stages of industrialisation. In large scale industry, the emphasis in the Plan is on producer goods industries as far as expansion of installed capacity is concerned. Producer goods industries are highly capital-intensive, and the additional direct employment which the programme of industrialisation offers in this period would be correspondingly small. In agriculture, according to the Plan, benefits of irrigation will accrue to about 20 million acres of cultivable land in this period. Where perennial irrigation is provided, opportunities will develop for double cropping and this will help to reduce seasonal unemployment. In the rest of the agricultural sector, the provision of irrigation facilities, manures and seeds will raise productivity and increase incomes. The immediate employment effect of the higher incomes is not likely to be very pronounced, but as the trend of rising incomes establishes itself, effective demand will grow in the. rural sector and widen employment opportunities in small scale industries as well as in services ancillary to commodity production. As mentioned in an earlier paragraph, the Plan incorporates several measures for the protection and expansion of small scale industries. These industries at present suffer from a variety of handicaps : inefficient techniques, lack of finance, difficulties in getting the necessary raw materials, inadequate marketing organisation, insufficient co-ordination with expansion in other sectors of industry, etc. Recommendations for improving these have been made in the relevant chapters in this Report. The principle of giving direct assistance to cottage and small-scale industries and, in suitable cases, of assuring them a field of operation sheltered from excessive competition in the period of transition has also been accepted.

44. The problem of increasing income and employment in an underdeveloped country is, in the last

analysis, tied up with the larger problem of capital accumulation. The present Plan aims at raising domestic investible surpluses from the estimated level of Rs. 450 crores in 1950-51 to about Rs. 675 crores by 1955-56. It is the same factors which prevent the rate of capital accumulation from being stepped up further that also stand in the way of more rapid increases in income and employment. Basically, the solution lies in tapping the large investment potential which lies in the unutilised manpower and other resources in the country, this is a question of organisation. Changes in the institutional framework and the organisational measures recommended in this Report have from this point of view a vital significancecent respectively. No doubt, some of these increases will be absorbed by the development outlay of public authorities, but the additions to construction activity in the private sector which the larger output of cement and steel can sustain may still be considerable.

Statement I Development Expenditure Under the Plan: Centre and States(Rs. lakhs)

Head Total Central Govern-ment

Part' A ' States

'Part 'B ' States

Jammu andKashmir

Part' C States

1 2 3 4 5 6 7

/. Agriculture and Commnity Development—

Agriculture 18422-2 5922-2 9108-2 2771-0 22-1 598-7

Veterinary and Animal Husbandry including Dairying

2228-5 412-0 1524-6 197-9 15.0 79-0

Forests 69-5 200-0 599-8 224-7 10-0 135-0

Cooperation 711-2 50-0 491-7 125-2 44-3

Fisheries 464-1 50-5 332-5 72-9 8-2

Rural Development 1047-1 674-4 372-2 0-5

Community Projects . 9000-0 9000-0 Local Works 1500-0 1500-0 Programme for Scarcity

affected Areas 1500-0 1500-0

total 36042.6 18634-7 12731-2 3763-9 47-1 865-7

II. Irrigation and Power— Multipurpose Projects .

26590-0 26590-0

Irrigation Projects 16796-5 11234-3 5013-2 366-7 182-3

Power Projects 12754-0 9374-7 3135-5 74-9 168-9

total 56140-5 26590-0 20609-0 8148-7 441-6 351-2

III. Transport and Communications—

Railways * 25000-0 25000-0 Roads 10887-8 3124-0 5059-2 1582-8 494-4 627-4

Road Transport . 896-9 562-4 96-0 238-5

Shipping 1805-8 1805-8 Civil Aviation 2287-0 2287-0 Ports and Harbours . 3308-8 3206-4 26-0 63-0 13-4

Inland Water Transport 10-0 I0.0

Posts and telegraphs . 000-0 5000-0 Broadcasting 352-0 352-0 Overseas Communications 100-0 100-0 Meteorological Department 62-0 62-0 total 49710-3 40947-2 5647-6 1741-8 494-4 879-3

* The outlay of Rs. 250 crores is additional to the estimated expenditure of Rs. 150 crores to cover the cunent depreciation of assets in the period of the Plan.

Statement I Development Expenditure Under the Plan; Centre and States—Contd.(Rs. lakhs)

Head Total Central . Government

Part 'A ' States

Part ' B' States

Jammu and Kashmir

Part ' C' States

1 2 3 4 5 6 7IV. Industry—Large-scale Industries 14033-2 12604-3* 1025-8 352-5 50-6 Cottage and Small-scale Industries.

2704-1 1500-0 764-9 356-9 31-2 51-1

Scientific and Industrial Research

461-0 461-0

Mineral Development 106.1 106.1 total 17304-4 14671-4 1790-7 709-4 8.8 51-1V. Social Services— Education 15566-1 3901-6 9881-0 1227-4 46-0 510-1Health 9954-6 1787-4 6350-3 1238-1 128-2 450-6Housing 4881-6 3850-0 877-1 87-5 12-0 55-0Labour and Labour Welfare

691-7 397-3 273-1 20-3 1-0

Amelioration of Backward Classes and Scheduled Castes and Tribes .

2887-2t 700-0 1848-1 3i6-6 22-5

total 33981-2 10636-3 19229-6 2889-9 186-2 1039-2VI. Rehabilitation 8500-0 8500-0 VII. Works and buildings

1102-3 1102-3

VIII. Finance Ministry schemes

439-6 439-6

IX. North-east Frontier agency

300.0 300-0

X. Andamans 382-8 382-8 XI. Loans to Corporations

1200-0 1200-0

XII. Miscellaneous 1774-4 550-0 1003-5 72-0 48-9 grand total 206878-1 124054-3 61011-6 17325-7 1300-0 3186-5

"'Includes lumpsum provision of Rs. 50 crores for basic industries and transport and programme tor mineral exports.+This includes Central grants amounting to Rs. 3 crores; in addition, about Rs. 9 crores are likely to be available by way of grants from the Central Government under Article 275 (i) of the Constitution.

Statement II Development Expenditure Under the Plan : Part 'A' States(Rs. lakhs)

Head Assam Bihar Bombay Madhya Pradesh

Madras

1 2 3 4 5 6Agriculture 276-1 1284-3 1748-4 1005-5 1593-7Veterinary and Animal Husbandry

12-5 92-5 166-9 98-8 100 0

Dairying and Milk Supply 1-5 602-1 36-9 50-0

Forests 36-3 125-0 83-8 40-8 38-8Co-operation 29-3 39-0 123-2 28-8 100-0Fisheries 6-0 10-6 16-0 5-8 100-0Rural Development 39-3 124-7 131-5 165-9 200-0/. Agricultural and Rural Development.

399-5 1677-6 2871-9 1382-5 2182-5

Multipurpose ProjectsIrrigation Projects 200-0 973-3 2269-0 308-0 3408-0Power Projects 83.0 708-7 1043-0 600-0 5024-0//. Major Irrigation and Power Projects.

283-0 1682-0 3312-0 '908-0 8432-0

Cottage Industries 250-0 59-2 103-1 9-2 6-9Other Industries 60.0 250-6 226-2 85-1

III. Industry 25-0 119-2 353-7 235-4 202-0Roads 213-0 800-0 1163-6 200-0 500-0Road Transport 31-9 200-0 Ports and Harbours 25-0 IV. Transport 244-9 800-0 1388-6 200-0 500-0Education 89-9 570-4 4611.l 1079-3 800-0Medical 173-5 403-9 536-4 267-9 300 -0Public Health 17-8 196-0 iii6-7 78 .2 900-0Housing 100-0 77-2 20-0 300-0

Labour and Labour Welfare

6-0 20-0 162-3 0-5

Amelioration of Backward Classes

509-6 160.0 213-6 136-4 467-6

V. Social Services 796-8 1450-3 6717-3 1582-3 2767-6VI. Miscellaneous grand total 1749-2 5729-1 14643-5 4308-2 14084-1

Statement II Development Expenditure Under the Plan : Part 'A' States—Contd.(Rs. lakhs)

Head Orissa Punjab Uttar Pradesh West Bengal Total1 7 8 9 10 l1Agriculture 205-5 210-7 2095-9 688-1 9108-2Veterinary and Animal Husbandry

52.8 22-0 134-1 74-7 754-3

Dairying and Milk Supply . 9-2 20-6 50-0 770-3

Forests 13-1 18-0 165-2 78-8 599-8Co-operation 28-9 118 130-7 491-7

Fisheries 33-4 6-2 154-5 332-5

Rural Development 10-0 3-0 674-4

I. Agriculture and Rural Development

352-9 262-5 2552-7 10491 12731-2

Multipurpose Projects Irrigation Projects 300-0 326-2 1912-0 1537-8 234-3Power Projects 39-00 38-2 141-00 75-8 9374-777. Major Irrigation and PowerProjects

691-0 364-4 3323-0 1613-6 20609.0

Cottage Industries 27-6 48-1 301-5 74-3 764-9Other Industries 65-3 15-5 280-7 42-4 1025-8III. Industry 92-9 63-6 582-2 6-7 1790-7Roads 200-0 75-1 522-4 1385-1 5059-2Road Transport 20-0 120-0 190-5 562-4

Ports and Harbours 1-0 26-0

IV- Transport 221-0 75-1 642-4 1575-6 5647-6Education 179-5 8-0 1603-8 808-1 9860-1Medical 78-7 73-9 349-8 1210-2 3394-3Public Health 46-4 50-1 246-1 304-7 2956-0Housing 11-3 145-2 223-4 877-1

Labour and Labour Welfare 1-9 8 101-5 294-1


6-4 236-2 8-3 1848-1

V. Social Services 422-9 255-1 2682-6 2554-7 19229-6VI. Miscellaneous . 3-5 100-0 1003-5

grand total 1784-2 2020-7 9782-9 6909-7 610-06

Statement III Development Expenditure Under the Plan : Part '5' States and Jammu and Kashmir(Rs. lakhs)

Head Hyderabad Madhya Bharat Mysore Pepsu1 2 3 4 5Agriculture 346-4 750-0 443-0 364-9Animal Hubandry 49-6 50-0 53-8 10-0

Dairying and Milk Supply 1-7 Forests. 21-4 50-0 8-3 43-6Co-operation 35-3 25-0 7-1 15-0Fisheries 8-6 10-0 2-2 2-4Rural Development 60-0 8 7. Agriculture and Rural Development

463-0 945-0 595-5 435-9

Multipurpose ProjectsIrrigation Projects 2479-0 328-0 716-0 34-0Power Projects 320-6 228-0 1268-0 30-6II. Major Irrigation and Power Projects

2799 .9 55-0 1984.0 64-6

Cottage Industries 25-7 50-0 135-4 4-4Other Industries 268-7 5-0 34:8 27-3III. Industry 294-4 55-0 170-2 31-7RoadsRoad Transport 128-6 189-0 320-1 95-1Ports and Harbours IV. Transport 128-6 189-0 320- I 95-1Education 263-5 200-0 225-6 89-9Medical 117-7 77-0 56-5 56-0Public Health 88-2 121-2 158-3 29-0Housing 14-4 50-0 2-0

Labour and Labour Welfare 4-4 Amelioration of Backward Classes

80-0 100-0 10-0

V. Social Services 469-4 497-0 590-4 186-9VI. Miscellaneousgrand total 4155-0 2242.0 3660-2 814.2

Statement III Development Expenditure Under the Plan: Part 'B' States and Jammu and Kashmir—Contd.

(Rs. lakhs)

Head Rajasthan Saurashtra Travancore Cochin

Jammu and Kashmir

Total

6 7 8 9 10Agriculture 109-2 212-4 545-1 22-1 2771-0Veterinary and Animal Husbandry

18-3 10-4 2-5 15-0 194-6

Dairying and Milk Supply

6 3-3

Forests 21-8 19-6 60.0 10-0 224-7Co-operation 3-0 31-8 8-0 125-2Fisheries 34-7 15-0 72-9Rural Development 15-0 216-I 372-2I. Agriculture aiiid Rural 167-3 526-6 630-6 47-1 3763-9

Development Multipurpose ProjectsIrrigation Projects 503-6 474-6 478-0 366-0 5013-2Power Projects 40-8 212-5 1035-0 74-9 3135-5//. Major Irrigation and Poivcr Project

544-4 687-1 1513-0 441-6 8148-7

Cottage Industries 38-5 13-9 89-0 31-2 356-9Other Industries 0-9 15-8 50-6 352-5///. Industry 38-5 14-8 104'8 8r8 709-4Roads 400-0 300-0 150-0 494-4 1582-8Road Transport 1-0 53-0 42-0 96-0Ports and Harbours 33-0 30-0 63-0IV. Transport 401 .0 386-0 222-0 494-4 1741-8Education 263-5 164-9 20-0 46-0 1227-4Medical 82-0 71-5 120-0 46-0 580-7Public Health 135-5 73-7 51-5 82-2 657-4Housing 2-0 9-1 10-0 12-0 87-5Labour and Labour Welfare

5-0 10-9 20-3


42-2 24-4 60.0 316-6

V. Social Services 530-2 354-5 261-5 186-2 2889-9VI. Miscellaneous 72-0 48-9 72-0grand total 1681-4 2041-0 2731-9 1300-0 17325-7

Statement IV Development Expenditure Under the Plan : Part 'C' States(Rs. lakhs)

Head Ajmer Bhopal Bilaspur Coorg Delhi Himachal Pradesh

I 2 3 4 5 6 7Agriculture 48-4 173-0 7-0 63-6 28-0

Veterinary and Animal Husbandry

9'6 7-0 9-4 22*4

Dairying and Milk Supply

4-9

Forests 10-6 20-0 5-0 2-2 59-0

Co-operation 8-4 5-0 2-0 6.3 15-0

Fisheries 2-0 2-6 Rural Development 0-5 /. Agricultural and Rural Development .

77-0 207-0 13-6 3-0 89-0 125-4

Irrigation Projects . 80-0

Power Projects 27-9 35-0 13-5

II. Major Irrigation and Power Projects .

11-3 27-9 35-0 93-5

Cottage Industries . 5-0 0-5 7-3 23-0

Other IndustriesIII. Industry 0 0-5 7-3 23-0

Roads 15-9 40-0 23-0 20-0 25-0 110-0Road Transport 2-0 216-0 10-0

Ports and Harbours IV. Transport 15-9 40-0 25'0 20-0 241 .0 120-0Education 15-0 30-0 10-0 10-0 259-8 36-8Medical 31-9 25-0 4-0 5-0 58-9 18-1Public Health 6-1 50-0 4-0 36-0 37-9

Housing 55-0 Labour and Labour Welfare

Amelioration of Backward Classes .

5-0

V. Social Services 53-0 110-0 18-0 15-0 410-7 92-8grand total 157-2 389-9 57-1 73-0 748-0 454-7

Statement IV Development Expenditure Under the Plan : Part 'C' States—Contd.(Rs. lakhs)

Head Kutch Manipur Tripura Vindhya Pradesh Total8 9 10 11 12

Agriculture 60-6 0-8 12-6 204-7 598-7Animal Husbandry 3.9 2-5 2-8 12-9 71-6Dairying and Milk Supply . 1-5 7-4

Forests 1-4 3-0 3 22-5 135-0Co-operation . 3-5 3-0 44-3

Fisheries 1-4 1-2 8-2

Rural Development 0-5

I. Agriculture and Rural Development

70-8 6.3 27-8 245-8 865-7

Irrigation Projects 91.0 182-3

Power Projects 23-0 12-0 7-0 50-5 168-9II. Major Irrigation and Power Projects .

114-0 12-0 7-0 50-5 351-2

Cott.y Industries 3-5 5-8 6-0 51-1

Other Industries Industry 3-5 5-8 6-0 51-1

Roads 58-3 81.3 128-0 125-9 627-4Road Transport 10-5 238-5

Ports and Harbours . 13-4 13-4

IV. Transport 71-7 91 '8 128 .0 125 9 879-3Education 6-8 17-7 24-0 100-0 5IO-I

Medical .... 26.0 6-0 11-7 36-0 222-6Public Health . 10-0 21-0 3-0 60-0 228-0Housing 55-0

Labour and Labour Welfare

1-0

Amelioraton of Backward Classes

2-5 15-0 22-5

V. Social Services 45-3 44-7 38-7 211-0 1039-2grand total 305-3 154-8 207-3 639-2 3186-5

Statement V Progress of Development Expenditure : Central Government(Rs. lakhs)

Head Expenditure in 1950-51 Progress of expenditure Five Years' Total (Plan) 1951-56

1951-52 Revised

1952-53 Budget

1 2 3 4 5/. Agriculture and Community Development:Agriculture 244-3 256-2 303-2 5922-2*Animal Husbandry including Dairying.

30-3 412-0

Forests. 200-0

Cooperation 50-0

Fisheries. 50-5

Community Projects 9000.0

Local Works 1500-0

Programmes for scarcity-affected areas

1500-0

total 244-3 256-2 333-5 18634-7//. Major Irrigation and Power Projects

2210-0 3666-0 4033-0 26590

///. Industry : Large-scale industries

635-3 991-9 1272-9 12604-3

Small-scale and Cottage industries ....

14-5 17-0 20-0 1500-0

Scientific and Industrial Research

96-0 75-2 107-5 461-0

Mineral Development 4-2 18-8 106-1

total 745-8 1088-3 1419-2 1471-4

*Inclucles additional provision for the period 1953-56 for minor irrigation—Rs. 30 crores; medium and long term loans to agriculturists—Rs. 10 crores; national extension organization—Rs. 3 crores, forests and soil conservation—Rs. 2 crores; Resettlement of landless agricultural workers—Rs. 2 croresDetails of expenditure incurred are not available.

Includes Rs. 40 crores for new irrigation and power projects for the period 1953-56. % Includes lump-sum provision of Rs. 50 crores for basic industries and transport for the period 1953-56.

Statement V Progress of Development Expenditure '. Central Government—Contd.(Rs. lakhs)

Head Expenditure in — 1950-51

Progress of expenditure Five Years' Total (Plan) 1951-561951-52

Revised1952-53 Budget

1 2 3 4 5IV. Transport :Roads 296-1 365-0 600.0 3124-0Inland Water Transport 2-0 2-0 10-0

Ports and Harbours 78-8 85-7 240-0 3206-4Shipping 155-1 158-7 4i8-6 1805-8Railways 333 4689-0 4910-0 .25000.0Civil Aviation 178-2 185-0 217-0 2287-0Posts and .Teligraphs 753-9 487-0 579-0 5000-0Overseas Communications 8-0 20-0 20-0 100-0Meteorological Department 15-0 15-0 62-0

Broadcasting 16-4 35-0 43-3 352-0total 4817-5 6042-4 7044-9 40947-2V. Social Services Education 124-6 149-4 423-0 3901.6*Health 7-5 10-3 45-5 1787-4Housing 100-0 168-0 900-0 3850-0Labour and Labour Welfare .- 55-9 48-5 55-3 397-3Amelioration of Backward Classes, Scheduled Castes and Tribes

174-7 180.0 700

total 288-0 550-9 1603.8 10636-3VI. Rehabilitation 2032-7 2854-4 2657-5 8500-0VII. Works and Buildings. 23-4 57-4 207-8 1102-3VIII. Finance Ministry Schemes 92-0 100-5 108-9 439-6IX. North East Frontier Agency 10-6 30-0 20-9 300-0X. Andamans 382-8

XI. Loans to Corporations 1200-0

XII. Miscellamou 650-0

grand total 10464-3 14646-1 17429-5 124054-3

•Includes Rs. 4 crores for voluntary welfare organisations for the period 1953-56.!In addition, about Rs. 9 crores are likely to be available by way of Central grants under Article 275 (l) of the Constitution.

Statement VI Progress of Development Expenditure in States by Heads of Development(Rs. lakhs)

Head Development Expenditure in 1950-51

Progress of expenditure Five Years' Total (Plan) 1951-52 1952-53

(Revised) (Budget)1951-56

1 2 3 4 5Agriculture 2709-2 2274-6 2525-8 12500-0Veterinary and Animal Husbandry

96-9 123-9 174-8 1035-5

Dairying and Milk Supply . 122-7 138-9 95-7 781-0Forests 75-1 87-0 166-7 969-5Co-operation 82-6 99-9 6-7 661-2Fisheries 53-3 57-1 65-8 413-6Rural Development 85-2 136-8 195-2 1047-1total 3225-0 2918-2 3240-7 17407-9Irrigation Projects 2035-5 2894 .5 3506-2 16796-5Power Projects 1777-3 2224-3 2844-1 12754-0total 3812-8 5H8-9 6350-3 29550-5Cottage Industries 102-3 126-2 185-9 1204-1Other Industries 445-5 344-3 460-6 1428-9total 547-8 470-5 646-5 2633-0Roads 954-5 1226-3 1795-6 7763-8Road Transport 144-4 137-0 200-4 896-9Ports and Harbours 0-1 7-0 12-8 102-4total 1099-0 1370-3 2008-8 8763-1Education 1833-3 2005-6 2253-6 11664-5Medical 552-6 763-0 873-1 4243-6Public Health 366-0 516-5 611-5 3923-6Housing 142-5 215-8 299-7 1031-6Labour and Labour Welfare 32-3 32-8 38-8 294-4Amelioration of Backward Classes

259-6 338-6 409-7 2187-2

total 3186-3 3872-3 4486-4 23344-9Miscellaneous 72-6 108-9 303-4 1124-4grand total 943-5 13859-1 17136-1 82823-8

Statement VII Progress of Development Expenditure by States(Rs. lakhs)

States Expenditure in 1950-51

Progress ot expenditure Five — Years' Total (Plan) 1951-56

1951-52 (Revised)

1952-53 (Budget)

1 2 3 4 5Assam 103-0 141-8 247-7 1749-2Bihar 793-9 1348-6 1531-8 5729-1Bombay 2011.0 2312-2 2922-7 14643-5Madhya Pradesh 797-5 782-4 954-3 4308-2Madras 3064-2 2770-5 3008-2 14084-1Orissa 320-3 278-9 366-6 1784-2

Punjab 28l .2 377-3 591 .0 2020.7Uttar Pradesh 1378-3 1722-6 2294-1 9782-9West Bengal 1012-2 1308-1 1376-1 6909-7total'A' states 9761-6 11042-4 13292-5 6l0-6Hyderabad 602-9 714-8 792-6 4i55-0Madhya Bharat 213-1 251-0 438-8 2242-0Mysore 524-3 542-8 627-9 3660-2PEPSU 47-5 52-5 119-2 814-2Rajasthan 189-8 217-7 2I6-1 168-4Saurashtra 158-0 212-8 357-6 2041-0Travancore-Cochin 270-5 504-4 598-1 2731-9total'B' states 6-1 2496-0 3150-3 17325-7Jammu and Kashmir 27-3 134-1 136-9 1300-0Ajmer 12-6 14-5 20-3 157-2Bhopal 41-2 40-5 83-4 389-9Bilaspur 1-3 3-0 11-4 57-1Coorg 2-4 6-4 7-5 73-0Delhi 51-4 59-5 120-6 748-0Himachal Pradesh 6-4 17-7 94-7 454-7Kutch 4-1 18-2 74-7 305-3Manipur 0-4 21-5 154-8

Tripura 2-3 4-8 25-9 207-3Vindhya Pradesh 26-4 22-0 96-4 639-2total 'C' states 148-5 186-6 556-4 3186-5grand total 11943-5 13859-1 1713611 82823.8

2nd Five Year PlanHE PLAN IN OUTLINE

The broad objectives and rationale of the second five year plan have been set forth in the preceding chapter. The plan is intended to carry forward and accelerate the process of development initiated in the first plan period. The principal task is to secure an increase in national income by about 25 per cent over the five years, to enlarge employment opportunities at a rate sufficient to absorb the increase in labour force consequent on the increase in population and to take a major stride forward in the direction of industrialisation so as to prepare the ground for more rapid advance in the plan periods to come. The second five year plan is in one sense a continuation of the developmental effort commmenced in the first plan; but there is inevitably a shift in priorities with a larger accent on industrialisation, especially the development of he^vy industry, and the necessary ancillaries like transport. The acceptance of the goal of a socialist pattern of society reflects itself not only in the relative proportions of investment porposed in the public and private sectors but also in the approaches to institutional change both in the rural and in the urban sector. The fulfilment of the tasks outlined in the plan requires coordinated effort in both the public and private sectors, but the role of the public sector, as mentioned earlier, is the crucial one.

Plan Outlay And Allocations

2. The total developmental outlay of the Central and State Governments over the period of the plan works out at Rs. 4,800 crores. The distribution of this outlay by major heads of development is as under:—

Distribution of plan outlay by major heads a development

(D) First Five Year Plan Second Five Year PlanTotal provision (Rs. crores)

(2)

Per cent

( (3)

Total provision (Rs. crores) (4)

Per cent

(5)I. AGRICULTURE AND

COMMUNITY DEVELOPMENT

357 15.1 568 11.8

(v) Agriculture 241 10.2 341 7.1

Agricultural Programmes 197 8.3 no 3.5

Animal Husbandry 22 1.0 56 1.1

Foretts 10 0.4 47 1.0

Fisheries 4 0.2 12 0.3

Cooperation 7 0.3 47 1.0

Miscellaneous 1 9 0.2

(b) National Extension and Community Projects

90 3.8 200 4.1

(c) Other Programmes 26 1.1 27 0.6

Villflor PflTiphnviits 11 0.5 12 0.3

Local Development Works 15 0.6 15 0.3

n. IRRIGATION AND POWER 661 38.1 913 19.0

Irrigation 384 16.3. 381 7.9

260 11.1 427 8.9

Flood control and other projects, investigations, etc.

17 0.7 105 2.2

m. INDUSTRY & MINING 179 7.6 890 18.5

Large and Medium Industries

148 6.3 617 12.9

Mineral development 1 73 1.5

Village & Small industries 3* 1.3 200 4.1

THE PLAN IN OUTLINE

1 2 3 4 5

IV. TRANSPORT AND COMMUNICATIONS 557 23.6 1,385 28.9

Railways 268 114 900 18.8

Roads 130 5.5 246 5.1

Road Transport 12 0.5 17 0.4

Ports & Harbours 34 1.4 45 0.9

Shipping 26 1.1 48 1.0

Inland Water Transport 3 0.1

Civil Air Transport 24 1.0 43 0.9

Other Transport 3 0.1 7 0.1

Posts & Telegraphs 50 2.2 63 1.3

Other Communications 5 0.2 4 0.1

Broadcasting 5 0.2 9 0.2

V. SOCIAL SERVICES 533 ~ 22.6 "945 W

Education 164 7.0 307 6.4

Health 140 5.9 274 5.7

Housing 49 2.1 120 2.5

Welfare of backward classes 32 1.3 91 1.9

Social welfare 5 0.2 29 0.6

Labour and labour welfare 7 0.3 29 0.6

Rehabilitation 136 5.8 90 1.9

Special schemes relating to educated unemployment

5 0.1

VI. MISCELLANEOUS 69 3.0 99 2.1

Total 2,356 100.0 4,800 100.0

The total outlay mentioned above does not include all expenditures by local bodies on development schemes; only such expenditure on these schemes as is financed by State Governments is included in the allocations shown in the plan. The total outlay as presented here also does not include the contributions in cash or in kind which are made by the local population participating in developmental work within their localities. These contibutions are^ikely to be of considerable significance in terms of investment in the areas concerned even though they might not make a marked difference to the national totals.

3. The allocations under major heads of development shown above indicate the relative shift in priorities as between the first plan and the second plan. Industries and mining claim about 19 per cent of the total public sector outlay in the second plan as compared to 8 per cent in the first plan. In absolute terms, the step up in the outlay on industries and mining is very large—nearly 400 per cent. The actual outlay under this head in the first plan was less than 50 per cent of the allocation. Judged in this light the increase in the provision for industries and mining in the second plan is even larger than a comparison of the initial allocations would suggest. It will be observed that of the total outlay of Rs. 890 crores on industries and mining, Rs. 690 crores is for large scale industries including mining, while Rs. 200 crores is for promotion of village and small scale industries. The allotment of Rs. 73 crores under mineral development shown in the table is mainly for coal, coal washeries, oil prospecting and the expansion of the Geological Survey and the Bureau of Mines. The expenditure on iron ore mining is included in the allocations for the iron and steel projects.

4. Transport and communications account for 29 per cent of the total outlay in the plan period. While the development programme of the railways absorbs 19 per cent of the total outlay as compared to about 11 per cent in the first plan period, the allocations for other transport and communications form in the aggregate a somewhat smaller proportion of the total than in the first plan. In absolute terms, of course, the outlay on these latter is being stepped up significantly.

5. Some 19 per cent of the total outlay of the Central and State Governments is to be devoted to irrigation and power and another 12 per cent to agriculture and community development. The aggregate expenditure under these two heads works out at Rs. 1,481 crores. Although there is a relative shift in priorities as between agriculture and industry, increased production of food and raw materials must remain not only for the second plan period but for several years to come a major desideratum. The demand for food and raw materials is bound to increase rapidly as industrialisation proceeds and incomes increase. There cannot, therefore, be any relaxation of efforts to increase agricultural productivity. Of the total provision of Rs. 486 crores for irrigation and flood control Rs. 209 crores is on schemes which continue from the last plan, the balance ofRs. 277 crores being in respect of new schemes. The development of power is vital both for agriculture and for industry. The provision of Rs. 427 crores in the plan for power development includes roughly Rs. 160 crores on schemes continuing from the first plan and Rs. 267 crores on new schemes. The programmes for irrigation and power have been conceived as part of a wider programme of increasing the area under irrigation from Government works twofold and of increasing the supply of power sixfold over a period of about 15 years.

6. Social services take up about 20 per cent of the total outlay in the second plan as compared to 23 per cent in the first plan. In terms of percentages to total outlay under social services and related items, the allocations to education, health and housing are practically the same as in the first plan; in absolute terms they are significantly larger. Thus the provision of Rs. 307 crores for education in the second plan is a lit-de less than twice as large as that made in the first plan. The same is true of health. It must also be remembered that the plan includes only that part of the outlay on social services which is required for increasing the level of development reached at the end of the first plan. If allowance is made for the committed portion of the expenditure on social services which is not included in the plan, the share of social services in developmental outlay would be considerably larger.

7. Of the total development outlay of Rs. 4,800 crores, Rs. 2,559 crores represents expenditure to be incurred by the Centre and Rs. 2,241 crores is the total of plan expenditures by all the State Governments taken together. The break-up of the outlay by States separately together with comparable break-up for the first plan is shown in the Appendix to this Chapter, a detailed break-up by States and by heads of development being furnished at the end of this Report. The classification of outlay between the Centre and the States in the second five year plan is a little different from that followed in the first five year plan. In the first plan, in addition to the schemes to be implemented by the Central Ministries, a number of programmes which were sponsored and assisted b,y the Central Government through various Ministries were shown at the Centre. Expenditure found on a matching basis by the States for these schemes was, however, intended to form part of State plans. This led to certain difficulties in the presentation of plans. In the second five year plan, the general principle followed is that plans of States should include to the maximum'extent possible all programmes to be implemented by them or by public authorities cr local boards or special boards set up by them. The fact that for any particular programme carried out in the States either the whole or part of the resources comes from the Central Government or from agencies set up by it does riot, as a rule, affect the principle that the programme should be included within the State plan. While this principle has been generally applied, at this stage there are a few items which belong to State plans but some part of the expenditure is still shown at the Centre. For instance, in housing, welfare of backward classes and village and small scale industries part of the amounts shown at the Centre is likely to be allocated between States when certain proposals or other details which are under consideration have been agreed upon.

8. The distribution of the outlay of the Centre and of the States separately under major heads of development is shown in the table below;—

(Rs. crores)

Centre Part 'A' Part 'B' Part C'+

Total

2 3 4 5 6

I. Agricultural & Communit) Development 65 359 112 31 568*

II. Irrigation & Power 105 567t 217 24 913III. Industry & Mining 747 99 37 7 890IV. Transport & Communications 1203 120 41 21 1385V. Social Services 396 393 117 39 945VI. Miscellaneous 43 42 11 3 99

Total 2559 1580 535 125 4800*

•Includes the unallocated portion of Rs. I crore for N.E.S. and Community Project in the States.includes Andaman and Nicobar Islands NEFA and Pondicherry. ^Includes Centre's share of expenditure on D. V. C.

9. The Central Ministries as well as the State governments have worked out a phasing of their plans year by year. An examination of this phasing showed a somewhat excessive concentration of expenditure in the first two or three years of the plan. A part of this concentration was accounted for by the increasing momentum of expenditure on projects carried over from the first plan and are already in an advanced stage of execution, and it is necessary that such projects should be completed as early as possible so that they yield the benefits expected. This means correspondingly that the outlay on the new projects should be so phased that the total expenditure on the plan, both by the Centre and by the States, shows a steadily rising trend over the plan period. This is necessary as much from the point of view of matching expenditures and resources as for ensuring that employment is stepped up steadily as the plan proceeds. As has been mentioned earlier, the second plan is to be regarded as a framework within which detailed annual plans are worked out in the light of an examination of the financial and real resources available. The phasing of the plan has necessarily to be flexible. It is, however, necessary to have in readiness a well-worked out annual phasing of outlays from the start, as in many cases orders have to be placed in advanced for machinery and equipment and preliminary work commenced by way of setting up the necessary administrative and field staff.-y

Investment In The Second Plan

10. Of the total expenditure of Rs. 4,800 crores, roughly Rs. 3,800 crores represents investment, i.e., expenditure on building up of productive assets, and Rs. 1,000 crores is what may broadly be called current developmental expenditure. A rough break-up of the two types of expenditure under major heads is shown in the following table:—

(Rs.Crores)

Investment outlay Current outlay Total outlay

0) (2) (3) (4)

I. Agriculture & Community Development.

338 230 568

ii) Agriculture 181 160 341

iii) National Extension & Community Development@.

157 70 227

n. Irrigation & Power 863 50 913

(i) Irrigation & Flood Control. 456 30 486

(ii) Power 407 20 427

m. Industries & Mining 790 100 890

(i) Large and Medium Industries and Mining.

670 20 690

(ii) Village and Small-scale Industries 120 80 200

IV. Transport and Communications. 1.335 50 1,385V. Social Services 455 490 945VI. Miscellaneous 19 80 99

Total 3,800 1,000 4,800

investment programmes envisaged for the private sector. The targets of production and development represent the combined result of investment in both the sectors, and it is evident that the development programmes in the two sectors have to proceed at a pace and in a manner that ensure a balanced growth in outputs. Dependable estimates of total investment in the private sector are not available, and it is not possible to present anything more than a broad guess of the likely trends over the next five years. Judging from rough calculations regarding the trends of investment over the last five years and taking into account the known investment programmes in certain fields, the likely level of investment in the private sector over the second plan period might be put at Rs. 2,400 crores, broken down as follows:—

(Rs. crores)

l Organised industry and mining 5752 Plantations, electricity undertakings and transport other than

railways125

3 Construction 1,0004 Agiiculturei and village and small-scale industries 3005 Stocks . 400 Total 2,400

12. In the first plan period, total investment in the economy appears—very roughly—to have been around Rs. 3,100 crores, the investment in the private sector being a little more than half the total. The target for the second plan period works out at Rs. 6,200 crores, and for reasons stated earlier, the share of the public sector in the total investment records a substantial rise. The ratio of public to private investment in the second plan is 61:39 as compared to 50:50 envisaged in the first plan. Investment through the public sector is scheduled to go up 2Vi times, and the increase in investment in the private sector is expected to be of the order of 50 per cent.

Targets of Production And Development

13. The size and pattern of plan outlay as indicated in the earlier section give a measure of the over-all effort and the priorities envisaged in the plan. Within this broad framework, the plan must outline the concrete programmes of development to be taken in.hand and make an assessment of the results to be achieved. The programmes of development in different spheres are reviewed in detail in later chapters of this report. A brief account of these programmes is, however, given here in the paragraphs that follow. The principal targets of production anddevelopment to be achieved over the second plan the public and private sectors are set forth period as a result of the investments proposed both in below:—

Main targets at production and development

Sector&Item1

Unit2

50-513

55-564

60-615

Percent-age increase in 60-61 over 55-566

I.Agriculture end Community Development1. Foodgrains (million 54.0* 65.0 75.0 15

tons)1 Cotton ( " bales) 2.9 4-2 5.5 313. Sugarcane-raw gar ( " tons) 5.6 5.8 7.1 224. Oilseeds (million

tons)5.1 5.5 7.0 27

5. Jute ( " bales) 3.3 4.0 5.0 256. Tea ( "pounds) 613 644 700 97. National Extension Blocks ( Nos. ) Nil 500 3,800 6608. Community Development

Blocks( Nos. ) Nil 622 1,120 80

9. Population served by National Extension & Community Development Programme

(million persons)

Nil 80 325 306

10

Village Panchayats (Thousand Nos.)

83 118 200 70

(*) Relate* to the year 1949-50.

n. Irrigation Power1. Area irrigated (million

acres)51 67 88 31

2. Electricity (installed capacity) (million kw) 3.4 6.9 103

m Minerals1. Iron Ore (million

tons)3.0 4.3** 12.5 191

2. Coal (million tons)

32.3+ 38.0+ 60.0+ 58

IV Large-Scale Industries1 Finished steel (million

tons)1.1 1.3 4.3 231

2 Pig iron (for sale to foundries)

(million tons)

0.38 0.75 97

I. Aluminium (000 tons) 3,7 7.5 25.0 2334 Heavy steel forgings for sale (000 tons) Nil Nil 12 5. Heavy steel castings for sale (000 tons) Nil Nil 15 6 Steel structural fabrications (000 tons) N.A 180 500 1787 Machine Tools (graded) (value in

Rs. lakhs)31.8 75 300 300

8 Cement Machinery (Do. ) N.A 56** 200 2579 Sugar Machinery (Do. ) N.A 28** 2fip 77910

Textile Machinery (Cotton & Jute)

(Do. ) N.A 412 1950 373

11

Paper Machinery (Do. ) Neg. Neg. 400

12

Power Driven Pumps—Centrifugal

(000 Nos.) 34 40 86 115

1 Diesel Engines (000 H.P.) N.A 100 205 105

114

Automobiles (Nos.) 16,500

25,000

57,000

128

15

Railway Locomotives (Nos.) 3 175 400 129

16

Tractors (20-30 DBHP) (Nos.) 3,000

17

Cement (million tons)

2.7 4.3 13 202

18 Fertilisers:

(a) Nitrogenous (in terms of Ammn. Sulphate)

(000 tons) 46 380 1,450 282

(b) Phosphatic (in terms of Superphosphate)

(000 tons) 55 120 720 500

19

1. Sulphuric Acid (000 tons) 99 170 470 176

20

l Soda Ash (000 tons) 45 80 230 188

21

Caustic Soda (000 tons) 11 36 135 275

22

Petroleum Refinery—(crude processed)

(million tons)

3.6 4.3 19

23

Electric Transformers 33 K. V. and below

(000 KVA) 179 540 1.360 151

24. Electric Cables (ACSR Conductors)

(tons) 1,420 9,000 18,000 100

25 Electric Motors' (000 H.P.) 99 240 600 15026. Cotton Textiles (million

yards)4,618 6,850 8,500 24

27. Sugar (million tons)

1.1 1.7 2.3 35

28. Paper & Paper Board

(000 tons) 114 200 350 75

29. Bicycles (organised sector only)

(000 Nos.) 101 550 1,000 82

30. Sewing Machines (Organised sector only)

(000 Nos.) 33 110 220 100

31. Electric Fans (000 Nos.) 194 275 600 118V. Transport and Communications(a) Railways:(1) Passenger train

miles(millions) 95 108 124 15

(2) Freight (million tons)

91 120 181 51

(b) Roads:(1) National (000 miles) 12.3 12.9 13.8 7

Highways(2) Surfaced Roads (000 miles). 97.0 107.0 125.0 17(c) Shipping:(1) Coastal and

Adjacent*(lakh GRT) 2.2 3.2 4.3 34

(2) Overseas** (lakh GRT) 1.7 2.8 4.7 68(d) Ports:Handling

capacity (million tons)

20 25 32.5 30

(e) Posts & Telegraph*:(1) Post Offices (000 Nos.) 36 55 75 36(2) Telegraph Offices (000 Nos.) 3.6 4.9 6.3 28(3) Number of

telephones(000 Nos.) 168 270 450 67

VI. Education1. School-going children as percent of children in the respective age groups:(a) Primary Stage (6—11 age

group)42.0 51.0 63.0

(b) Middle Stage (11—14 age group)

14.0 19.0 22.5

(c) Higher Secondary Stage

(14—17 age group)

6.4 9.4 12.0

2. Elementary/Basic Schools

(lakhs) 2.23 2.93 3.50 19

3. Teachers in Primary/Middle Secondary Schools

(lakhs) 7.4 10.3 13.4 30

4. Teachers Training Institutions

(Nos.) 835 1,136 1,412 24

5. Enrolement in Teachers Training Institutions

(000 Nos.) 75.6 103.5 134.2 30

W. Health1. Medical

Institutions (000 n(

is.) 8.6 10 12.6 26

2. Hospital beds. (000 N

as.) 113 125 155 24

3. Doctors . (000 Ni as.) 59 70 82.5 184. Nurses . (000 Ni as.) 17 22 31 415. Midwives .. (000

Nias.) 18 26 32 23

6. Nurse-Dais & Dais (000 Ni

as.) 4 6 41 583

7. Health Assistants and Sanitary

OS.) 3.5 4 7 75

Inspectors (000 Ni

(••) Relate* to the calendar year 1954. (t) Flourag relates to calendar years.(*) Inclusive of tankers.(*•) Inclusive of tramp tonnage.

Agriculture And Community Development

14. The first five year plan has already initiated the process of increasing productivity in agriculture. Foodgrains production increased by 11 million tons, Le., by 20 per cent, over the last five years and the increase in agricultural production as a whole has been of the order of 15 percent. Over the second plan period, agricultural production is estimated to increase by 18 per cent. The lines on which efforts have to be made for increasing the productivity of land are already familiar. The provision of irrigation facilities, better seeds, fertilizers and the spread of improved techniques of cultivation will offer scope for expansion for many years to come. In addition to carrying forward these programmes, the second five year plan is designed to bring about greater diversification in agricultural production. As levels of living in the country improve and the industrial structure gets more broad-based it becomes necessary to devote increasing attention to cash crops and to the production of subsidiary foods such as vegetables, fruits, dairy products, fish, meat and eggs. Another aspect of agricultural development which will receive greater attention in the second plan relates to the institutional arrangements for promoting land use and land management on more efficient lines and for ensuring a greater degree of social justice among the classes dependent on land.

15. The target for additional production of foodgrains in the second plan is placed at 10 million tons, i.e., an increase of 15 per cent. from 65 million tons in 1955-56 to 75 million tons in 1960-61. As a result, the consumption of foodgrains in the country would increase from the present level of 17.2 oz. to 18.3 oz. per adult per day. Larger increases in production are envisaged for cotton (31 per cent), sugarcane (22 per cent), oilseeds (27 per cent) and jute (25 per cent). About a million more acres are expected to be brought under cultivation for sugar-cane as a result of additional irrigation facilities. If the target for sugarcane is realised, it will be possible to increase the consumption of sugar in the country from 1.4 to 1.7 oz. per adult per day. Apart from the increase in production that is proposed, special efforts will be necessary to improve the quality of domestically produced jute and to increase the proportion of long staple varieties in the outturn of cotton.

16. The targets for agricultural production set out above embody the results of discussions that have taken place with State Governments and the Central Ministry concerned. We feel, however, that these targets are modest in relation to the scope that exists for raising productivity and the demands that will be made by the large investments envisaged in the plan. The provision for agriculture and community development is being increased from Rs. 357 crores in the first plan to Rs. 568 crores in the second plan. This allocation is exclusive of increased facilities for short-term credit which will be afforded by the Reserve Bank, the State Bank and the cooperative movement. Early in 1955 the Planning Commission suggested to State Governments that in framing programmes for agricultural production, it was necessary from the national point of view to place before villages a goal which they should strive to attain over a period of years: viz., a doubling within a period of about 10 years of agricultural production, including food crops, oilseeds, fibres, plantation crops, animal husbandry products, etc. It was emphasised that this goal involved on the part of State Governments an obligation to provide the supplies, services and finance needed, plans for which would have to be worked out The targets set out at present in the plan are in the nature of working estimates indicating the increases in production potential arising from various development programmes. It is hoped that through better integration of the agricultural and the national extention programmes, it will be possible to fix appreciably higher targets for agricultural production. This problem is at present under duscussion between the Planning Commission and the authorities concerned. Considering the need for economising foreign exchange, it is important that a coordinated effort is made to step up the domestic production of foodgrains. In fact all crop yields in India are exceedingly low and they have to be raised rapidly if the programmes of industrial development are to

proceed at the rates required. To this end, the national extension agency should concentrate more and more on getting every village and every family to work out and implement a plan for improvement of agricultural productivity through the adoption of improved practices and by investment of their own labour and resources. We suggest also in this connection that systematic sample surveys be undertaken to measure the increases in agricultural production secured in various national extension and community development areas, so that necessary adjustments can be made in the programmes of development in this field froni time to time.

17. Among the programmes to be taken in hand for increasing agricultural production, precedence will continue to be given to the provision of irrigation facilities, the target of additional area to be brought under irrigation being 21 million acres. The consumption of nitrogenous fertilizers is expected to increase from 610,000 tons in 1955 to 1.8 million tons in 1960. Some 3,000 seed multiplication farms covering a total area of about 93,000 acres will be established and land reclamation and improvement programmes extending over 3Vi million acres of land will be undertaken.

18. The plan provides for considerable increases in the supply of protective foods like fruits and vegetables; a sum of Rs. 8 crores has been provided for promoting fruit and vegetable cultivation. The production in the allied occupations of fisheries, forestry and dairying is also expected to register substantial increases. The provision for animal husbandry and fisheries in the second plan amounts to Rs. 68 crores as against Rs. 26 crores in the first plan. During the first plan 600 key villages and 150 artificial insemination centres were established; these are to be increased by 1258 and 245 respectively. \feterinary dispensaries which increased from 2,000 to 2,650 in the first plan are expected to increase by another 1,900 during the second plan. The plan also contemplates the establishment of 36 urban milk supply unions, 12 cooperative creameries and 7 milk drying plants. Off-shore and deep sea fishing is to be expanded and for this purpose additional exploratory off-shore fishing stations will be established on the western and eastern coast and in the Andaman Islands.

19. The second plan makes a provision of Rs. 47 crores for cooperation, marketing and warehouses. The integrated scheme of credit, marketing and production recommended by the Rural Credit Survey Committee is to be jointly implemented by the State . Bank, the Reserve Bank and the Government and work has already been taken in hand in pursuance of the Committee's recommendations. In particular, the programme of building a network of warehouses all over the country will be carried through with expedition. It is estimated that cooperative agencies will be able to handle about 10 per cent. of the marketable surplus by the end of the second plan. In th.e meanwhile, greater emphasis is being placed on the extension of regulated markets in the country. The total number of such markets is expected to be doubled by the end of the plan. Over a period, the object of institutional reforms in the field of agriculture is to apply the cooperative principle to a steadily increasing range of activities. It has been found by experience that the growth of the cooperative movement in the sense of a spontaneous coming together of small and needy persons in the interests of larger production or more equitable distribution cannot be rapid enough. It becomes incumbent on the State, therefore, to sponsor and assist actively in the reorganisation and development of the cooperative movement. A comprehensive programme is being formulated to this end.

20. Perhaps the most significant feature of the First Five Year Plan was the emphasis it placed on the community development and national extension programme. The basic aim of this programme is to improve the economic condition of the people by spreading the knowledge of better techniques and to instil in them a desire for higher standards of living and a spirit of self-help and cooperation. Extension services and community organisations are one of the principal sources of vitality in democratic planning. Nearly one-fourth of the country has already been covered by this programme and the response of the people has been encouraging as seen from the fact that the voluntary contributions by the people in community project areas have amounted to about 60 per cent. of the expenditure incurred by Government It is proposed to carry forward the programmes of community development and national extension so as to cover the entire country by the end of the second plan. Aprovi-sion of Rs. 200 crores is made in the plan for this purpose. As indicated earlier, these programmes, suitably orientated from time to time, can,

we feel, be relied upon to secure increases in agricultural production even beyond the targets envisaged in the plan.

21. The development of village panchayats is an important constituent of the programme of fostering corporate life in the rural areas and of promoting among the rural community active interest in the development programmes of the village. In the first plan period the number of village panchayats increased from 83,000 to 117,000 and the aim in the second plan is to increase it further to 245,000. The plan makes a provision ofRs. 12 crores for promoting the development of village panchayats. There is also a provision of Rs. 15 crores for local development works. The object of this programme, which operates in areas not yet reached by the national extension service, is to enable village communities to undertake works of local benefit mainly with their own labour.

Irrigation And Power

22. The total area under irrigation in the country has increased from 51 million acres to 67 million acres over the first plan period. An additional area of 21 million acres is expected to come under irrigation by the end of the second plan with the result that the irrigated area in the country will increase by almost 75 per cent in ten years. Of the 21 million acres to be brought under irrigation in the second plan period, some 12 million acres will benefit from large and medium projects and 9 million acres from minor irrigation works.

23. The bulk of the additional irrigation from large and medium projects is expected as a result of the completion of the programmes continuing from the first plan (some 9 million acres) whereas new projects included in the second plan will account for additional irrigation of some 3 million acres. On completion, the irrigation potential of the major and medium projects started in the second plan would be of the order of 15 million acres. The benefit from major and medium irrigation projects is expected to flow more or less evenly over the second plan period—at the rate ol 2 million acres per year over the first three years and some 3 million acres per year over the last two years.

24. In view of the need for a steady increase in agricultural output, it is proposed to devote increasing attention to medium-sized projects. The First Five Year Plan provided for 7 irrigation projects costing more than Rs. 30 crores, 6 costing between Rs. 10 and 30 crores, 54 costing between Rs. 1 and 10 crores and about 200 costing less than Rs. 1 crore each. In the second plan, of the 1S8 new irrigation projects to be taken 11 hand, there is none which is expected to cost more than Rs. 30 crores, some ten will cost between Rs. 10 and 30 crores, 42 between pa 1 and 10 crores and die remaining 136 wili cost less than Rs. 1 crore each. Apart from their quick yielding nature, medium-sized projects offer particular scope for spreading the benefits of irrigation more evenly among different regions.

25. Among programmes of minor irrigation, mention may be made of the proposed ouday of pa 20 crores for the construction of 3,581 tubewells with a view to providing irrigration facilities for 916,000 acres. In addition, the exploratory programme of the drilling of deep tubewells which was begun in the first pSaa for assessing the possibilities of exploiting ground xter resources for irrigation will be continued in the tcond plan.

26. At the beginning of the First Five Year Plan, the total installed capacity for the generation of electricity m the country was 2.3 million kW. The first plan report envisaged an increase in power capacity of some 7 million kW. ia 15 years. The installed capacity for power generation has already increased by 1.1 million LW. over thi first plan period and an increase of another 3.5 million kW. over the second plan period is envisaged. A substantial increase—of over 100 per cent—in the capacity for power generation in the next five years is essential m view of the considerable emphasis on industriaiisation in the second plan, Since this emphasis has to be continued in subsequent plan periods, the original target, of an increase of 7 million fcW. in power capacity by 1965-66 has to be raised to about 13 millioci S.W.

27. The coasumption of electricity in the country is expected to increase from 14 units per capita ia 1950-51 to 25 units in 1955-56 and 50 unite in 1960-61. By the L;;, i of the first pian, about 95 per cent of the

towns with of 20,000 or more and some 40 per cent p.c the towns wth a population between 10,000 and 20,900 would ba s-ssured of electricity. The aim in the second plan is pror 1 Ac Eridty to all tovms with a populatior. of caw and <o 85 per cent. of the towns with a population between 5.0CO and 10,000. The provision 'if electric supply to villages and siaaU towns with a pwilation. of less than 5,000 entails heavy expenditure. The programme for rural electrification has, therefore, to be spread over a fairly long period. In the Second Five Year Plan, a provision of Rs. 75 crores is made for this programme, and it is expected that the number of small towns and villages receiving power supply will increase from 5,300 in 1956 to 13,900 in 1961. In considering the pace of rural electrification, it has to be remembered that it is not merely the availability of power as such, but its quantum in relation to industrial and other needs of particular areas and the terms on which power is made available that provide the real index of progress.

28. The bulk of the additional capacity for power generation in the country will be in the public sector with the result that the State wilLsoon have a dominant position in this field. The total installed capacity in the public sector is expected to increase from 0.6 million kW. in 1950-51 to 4.3 million kW. in 1960-61. The shareofthe public sector in the total capacity for power generation in the country will increase from 26 to 67 per cent. over the ten years. The significance of this can also be seen from the fact that the total investment of the public sector in electricity undertakings has increased from Rs. 40 crores in 1950-51 to some Rs. 270 crores in 1955-56 and is expected further to increase to about Rs. 680 crores by 1960-61.

Industriai And Mineral Development

29. The Major point of departure in the second plan is the precedence that is accorded to the public sector in industrial and mineral development Governmental initiative in the development of agriculture, power, transport and social services is already an established feature of economic planning in India. But projects of industrial and mineral development have hitherto not figured prominently in the investment plans of the public sector. Thus in the first plan a total provision of Rs. 94 crores was made for the establishment of large-scale industries in the public sector as against an estimated programme of new investment in the private sector of Rs. 233 crores. In the second plan, the provision of Rs. 690 crores for large-scale industries and mining (including scientific research) in the public sector compares favourably with the estimated new investment of Rs. 575 crores for industries and mining in the private sector. While the private sector is expected to play an important part in the process of industrialisation, there is a pronounced shift in emphasis in favour of the projects in the public sector.

30. Practically the whole of the proposed outlay of Rs. 690 crores for large-scale industry and mining is for development of basic industries such as iron and steel, coal, fertilizers, heavy engineering and heavy electrical equipment. During the second pian three steel plants of one million tons ingot capacity each will be established in the public sector at Rourkela, Bhilai and Durgapur. In addition, at one of these plants, 350,000 tons of pig iron will be produced for sale. Steel production at the Mysore Iron and Steel Works is to be expanded to 100,000 tons. The combined output of finishedsteel from all the projects in the public sector is expected to be of the order of 2 million tons by the end of the second plan.

31. The programme for the establishment of heavy engineering industries includes a heavy steel foundry at the Chittaranjan Locomotive factory for meeting the requirements of railways for heavy castings and the establishment of heavy foundries, forge shops and structural shops, under the auspices of the N.I.D.C. Arrangements are being made for the manufacture of heavy electrical equipment in the public sector. The Chittaranjan Locomotive factory is to be expanded so as to increase its output of locomotives to 300 per annum as against 125 per year at present. The Integral Coach Factory which went into production in 1955 will produce 350 coaches per annum by 1959. Provision has also been made for a new metre gauge coach factory.

32. The output of minerals in the country is expected to increase by 58 per cent over the second plan period. Mention may be made particularly of coal in view of the large increase in requirements that is implied in the programmes of industrial and transport development The present production of coal in the country is of the order of 38 million tons. The bulk of this production is in the private sector, the share of the public sector being only 4.5 million tons. It is proposed to increase She production of coal by some 22

million tons in the next five years, some 12 million tons in the public sector and the remaining 10 million tons in the private sector.

33. In view of the paucity of coal deposits in Southern India high priority has been given to the multi-purpose Lignite Project at Neiveli in South Areot district. Under this project 3.5 million tons of lignite aie to be produced and used for (1) generation of power in a station of 211,000 kW capacity, (2) production of carbonised briquettes in a carbonisation plant of about 700,000 tons annual capacity, and (3) production of 70,000 tons of fixed nitrogen in the form of urea and sulphate/nitrate. In addition, two mor" fertilizer factories are to be set up. One of these, to be located at Nangal, will produce nitro-limestone cones-ponding to 70,000 tons of Fixed nitrogen per annum. The other fertilizer factory is to be established at Rourkela. It wili produce nitro-limestone equivalent to 80,000 tons of fixed nitrogen per annum. Further, the Sindri Fertiliyer Factory will be expanded so as to increase its outpus from 66,000 tons of nitrogen to 117,000 tons.

34. Several of the projects completed during the first plan such as die D.D.T. plant, Hindustan Cables, Hindustan Antibiotics and the Indian Telephone Industries will be expanded. It is also proposed to establish a second D.D.T. plant in Travancore-Cochin. Among the projects included in the plans of States, mention may be made of the Durgapur coke-oven plant in West Bengal and the manufacture of electric porcelain insulators and transformers in Mysore.

35. The bulk of the investment in the private sector is also for the development of basic industries. Substantial programmes of expansion are envisaged for the iron and steel industry in the private sector and the capacity of the industry is expected to increase from the present level of 1.25 million tons of finished steel to 2.3 million tons by 1958. It is proposed to increase the production of cement from 4.3 million tons to 13 million tons—the capacity of the industry being raised to 16 million tons—by the end of the plan. Similarly, capacity for aluminium, ferro-manganese and refractories will be substantially stepped up.

36. The programmes of development in the private sector provide for a substantial increase in the production of machinery in the country, including machinery for cotton textiles, jute, sugar, paper, cement, agriculture and road making. The chemical industry which has already registered a sizeable advance in the first plan period will achieve significant diversification and growth in output The production of soda ash, for example, is to be increased to three times and of caustic soda to four times of the present level. The third oil refinery at Visakhapatnam will be completed by 1957 and an increase in the production capacity for power and industrial alcohol from 27 to 36 million gallons is envisaged.

37. Among consumer goods industries the output of cotton texiilef is to be increased by 24 per cent—from 6850 million yards to 8500 million yards. The breakup of this target as between mills, poweriooms and handloorns has not yet been determined. This, together with the allocation of the required yam output as between. mills and the cottage sector, wili be decided upoa in the light of a closer assessment of the possibilities of expanding handloom production and of the technical potentialities of ihe Ambar Charkha. The overall target of production envisaged here will provide for per capita consumption of cloth at about 18 yards and for exports of the order of 1,000 HiUSion yards a year. Judging from recent trends in ths demand for cloth, a larger increase in production may in fact become necessary. As regards other consumer goods the plan envisages an increase of about 35 per cent in the ;'reduction of sugar; for a doubling of the output of paper and paperboard; the production o! vegetable oils is expected to increase from 16 to 2.1million tons; and, there are also in the plan programmes for development of rayon, drugs and pharma-ceuticals.

38. The net output of factory establishments is expected to increase by 64 per cent in response to the programmes of development in the public and private sectors. The emphasis on capital goods industries can be seen from the fact that the net output of these industries is expected to increase by some 150 per cent India is still in the early stages of the development of basic industries. The next few steps in industrial development are fairly clear in view of the large and growing requirements which are at present met to a significant extent by imports. As these pressing needs are satisfied and the superstructure of basic

industries grows, it will be necessary to visualise an integrated programme of development for basic capital goods industries', for organised consumer goods industries and small scale industries.

39. The second five year plan provides for a sum of Rs. 200 crores for the development of village and small-scale industries. Of this, Rs. 59.5 crores is earmarked for the handloom industry, Rs. 55 crores for small-scale industries, Rs. 55.5 crores for Khadi and other village industries, and the rest for other industries. Considerable technical examination with reference to the potentialities of each industry and of various areas will be necessary before targets of production in this field can be presented in concrete terms.

Transport And Communications

40. Of the total amount of Rs. 1385 crores set apart for transport and communications in the public sector plan, Rs. 900 crores are provided for railways. In addition, the railways will spend some Rs. 225 crores for normal replacement The backlog of replacement accumulated during the war and the early post-war years has not been made good so far and a sizeable increase in traffic is expected over the second plan period mainly in response to the programmes of industrial and mineral development. The volume of goods traffic is expected to increase from 120 million tons in 1955-56 to about 181 million tons in 1960-61, i.e. by 50 per cenf and it is felt that even the large outlay of Rs. 900 crores may not suffice to enable the railways to lift all the additional goods traffic that is offered. It is in view of this that the plan provides for an increase of only 3 per cent per annum in passenger traffic. This order of increase in passenger services will not help much in relieving present over-crowding. The plan outlay of Rs. 900 crores also includes ho provision for the construction of new lines to open up parts of the country not served by railways at present. The provision in the plan for new lines is confined to those required for operational purposes and for the new industrial project^. Special attention will be paid during the second plan period to improvements in operational efficiency of the railways. The programme for the development of railways and other means of transport will be reviewed from year to year so as to ensure that the progress of the plan is not impeded by inadequacy of transport facilities.

41. The railway plan provides for doubling of 1607 miles of track, conversion of 265 miles of metre gauge lines into broad gauge, electrification over sections totalling 826 miles and dieselisation over 1293 miles. Provision is also made for the construction of 842 miles of new lines and for the renewal of 8000 miles of obsolete track.

42. With a total capital investment of about Rs. 974 crores at present the railways are the largest single national undertaking. Apart from providing the bulk of transport facilities, the railways run a large number of industrial enterprises for meeting their requirements. These enterprises are to be greatly expanded during the second plan period. The significance of the programmes of industrial development in relation to railway requirements can be seen from the fact that as against the total purchase of '2258 locomotives, 107,247 wagons and 11,364 coaches in the second plan period, the output of locomotives, wagons and coaches at the end of. the second plan is expected to reach the level of 400, 25,000 and 1800 per annum respectively. In the second plan period, the railways will need to import materials and equipment worth Rs. 425 crores—Rs. 137 crores for steel, Rs. 81 crores for locomotives and the rest for rolling stock including wagons. In view of the proposed increases in industrial production over the next five years, the dependence of railways on imports will diminish considerably in subsequent plan periods.

43. The second plan makes a provision of Rs. 263 crores for roads and road transport, Rs. 96 crores for shipping, ports and harbours and inland water transport, Rs. 43 crores for civil air transport and Rs. 76 crores for broadcasting, posts and telegraphs and other communications. The Nagpur Plan (1943) outlined a long-term programme for road development over a period of twenty years. With the investment proposed in the second plan the target for road mileage envisaged in the Nagpur Plan will be practically reached by 1960-61. Road transport nationalisation programme is to be suitably phased and the State Governments are expected to add to their existing fleet about 5,000 vehicles. The capacity of the major ports is to be increased by 30 per cent and minor ports in the maritime States are to be further developed. The plan also provides for an extensive programme for the development of lighthouses. The total tonnage

of ships is expected to be increased from 6,00,000 GRT at the end of the first plan to 9,00�000 GRT at the end of the second plan after allowing for the obsolescence of 90,000 GRT. The allotment for shipping, it is recognised, may prove less than adequate, and it may be necessary to increase it, especially in view of the rise in the price of ships. The Hindustan Shipyard is to be expanded and a dry dock is to be constructed at Visakhapatnam. The question of construction of a second ship-building yard may be examined later. The Indian Airlines Corporation and the Air India International have sizeable programmes for purchase of additional aircraft and .for improving their operational facilities. The number of post offices which increased from 36,000 to 55,000 in the first plan is to be increased further to 75,000 in the second plan. The demand for telephones is increasing rapidly and the plan provides for a 67 per cent increase in the number of telephones in the country—fro'm 270,000 to 450,000. As a minimum, the extension of telephone facilities in the country must match the present tempo of production of telephones, and the programmes for manufacture of telephones and for extension of telephone facilities have to dovetail. In view of this consideration the provision made in the plan under this head may have to be reviewed. As regards broadcasting, a 100 KW short-wave transmitter as well as a 100 KW medium-wave transmitter will be set up at Delhi and 50 KW short-wave transmitters are to be provided at Calcutta, Bombay and Madras. It is proposed to instal about 72,000 community receivets in rural areas.

Social Services

44. The total outlay on social services in the plan is placed at Rs. 945 crores or about twice the provision made in the first plan. The continuing emphasis on the development of educational and medical facilities as well as on the advancement of industrial labour, displace persons and other under-privileged classes is an integral part of the socialistic pattern of society which seeks to achieve a greater degree of equality of opportunities in the country.

45. One of the Directive Principles in the Constitution is that within a period of 10 years as from 1950-51, free and compulsory primary education for all children until the age of 14 should be provided. On the basis of the targets proposed in the plan, by 1960-61, only 63 per cent of the children in the age-group 6 to 11 and 22.5 per cent. of the children in the age-group 11 to 14 would be provided for. The number of pupils will increase by 7.7 millions at the primary stage and I. 3 million at the middle stage. These targets will require the establishment of 53,000 new primary schools and 3,500 middle schools. At the secondary stage it is proposed to provide increasing diversification of courses. The number of multipurpose schools is to be increased from 250 at the end of the first plan to about 1200 by'the end of the second plan. In each sector of development, technical personnel will be needed in rapidly increasing numbers. It is, therefore, proposed to establish three higher technological institutes, one each in the Northern, Western and Southern regions and to develop further the Delhi Polytechnic and the Kharagpur Institute of Technology. The Indian School of Mines and Applied Geology at Dhanbad will also be expanded. The total number of engineering institutions will be increased from 45 to 54 for graduate and post-graduate studies and from 83 to 104 for diploma courses. The out-turn of graduates in engineering is expected to increase from 3,000 in 1955 to 5,480 in 1960 and of engineering diploma holders from 3,560 to about 8,000.

46. The basic difficulty in extending health services in the country lies in the lack of trained personnel in sufficient numbers. Consequently, it is proposed to increase the supply of doctors, nurses, and health assistants by 18, 41 and 75 per cent respectively in the second plan. An increase of 24 per cent in the number of hospital beds is also envisaged. A sum of Rs. 4 crores is set apart for family planning arid it is expected that about 300 urban and 2000 rural clinics will be set up during the plan period.

47. The proposed outlay of Rs. 120 crores on housing relates to the schemes sponsored by the Works, Housing and Supply Ministry. In addition, provisions for housing have also been made in the plans of a number of Central Ministries including Railways, Iron and Steel, Production, Rehabilitation, Defence and others, and in the plans of States. The total number of dwelling units to be constructed by public authorities in the second plan period comes to 1. 3 million. The plan provides for an outlay of Rs. 29 crores for implementing schemes relating to labour. Apart from the provision for welfare centres and of training facilities on an extended scale, it is proposed to increase the number of employment exchanges

in the country from 136 to 256 and also to expand their activities. The various activities initiated in the first plan for the welfare of the backward classes will be continued on an expanded scale. Greater assistance will be given to the various voluntary agencies for social welfare. Programmes for rehabilitation of displaced persons will have to be continued in the second plan. A sum of Rs. 90 crores has been provided for this purpose.

National Income, Consumption And Employment

48. The targets of achievement and the programmes of development to be taken in hand in different sectors have been outlined in the earlier sections. The sum total of developments in various fields is reflected in the growth of national income. The expected increase in national income during the first and second plan periods is given in the table below:

National Product by Industrial Origin

(Rs. crores at 1952-53 prices) Percentage

increase during

1950-51

1955-56

1960-61

1951-56

1956-61

I. Agriculture & allied pursuits 4,450 5,230 6,170 18 182.

Mining 80 95 150 19 58

3.

Factory establishments 590 840 1,380 43 64

4.

Small enterprises 740 840 1,085 14 30

5.

Construction 180 220 295 22 34

6.

Commerce, transport and communications 1,650 1,875 2,300 14 23

7.

Professions and services including Government Administration

1,420 1,700 2,100 20 23

8.

total national product 9,110 10,800 13,480 18 25

9.

Per capita income (Rs.) 253 281 331 11 18

49. For the major sectors of agriculture, mining and factory establishments the estimates of net output are based largely on the detailed targets of production set out earlier. But in the case of other sectors such as commerce, professions and other services which are largely outside the purview of the plan, only an indirect estimate is possible. Nonetheless, it would appear that national income wiil increase from Rs. 10,800 crores in 1955-56 to about Rs. 13.480 crores in 1960-61 (at constant prices) i.e. by about 25 per cent. This will mean an increase of about 18 per cent in per capita income (from Rs. 281 in 1955-56 to Rs. 331 in 1960-61) as against an increase of 11 per cent over the first plan period (from Rs. 253 to Rs. 281). It will be seen that despite the substantial increase in the net output of mining and factory establishments that is envisaged, the structure of the economy will change only marginally over the plan period. Thus the share of agriculture and allied pursuits in total national income will decline from 48 per cent in 1955-56 to 46 per cent in 1960-61, and that of mining and factory establishments will increase correspondingly from 9 to 11 per cent It is this fact which underlines the need for a continuing emphasis on industrialisation during subsequent plan periods.

50. The average level of consumption in the economy will not increase as fast as national income, inasmuch as a larger proportion of domestic output will have to be saved and invested. The programme of investment envisaged for the second plan period— Rs. 6,200 crores—requires, broadly speaking, a set-

up in the rate of domestic saving from the present level of some 7 per cent of national income to about 10 per cent of national income in 1960-61. This is on the assumption that external resources of the order of

Rs. 1100 croreswill become available, as postulated in the plan, for supplementing domestic savings. Total consumption expenditure in the country may, on this assumption, be expected to increase by some 21 per cent as against the increase in national income of 25 per cent The corresponding increase in total

consumption over the first plan period amounts to some 16 per cent The following table indicates the broad position in regard to national income, investment, domestic savings and consumption expenditure

at the end of the second plan period as compared to the position in 1950-51 and in 1955-56:

National Income, Investment, Savings and Consumption (Rs. crores at 1952-53 prices)

1950-51 1955-56 1960-61

1. National income 9,110 10,800 13,4802. Net investment 4.48 790 1,4403. Net inflow of foreign resources . (-)7 34 1304. Net domestic savings (2—3) 455 756 1,3105. Consumption Expenditure (1—4) 8,655 10,044 12,1706. Investment as per cent of national

income (2 as % of 1)4.94 7.31 10.68

7. Domestic savings as per cent of national income (4 as % ofl) .

4.98 7.03 97

51. It maybe emphasised that if foreign resources of the order required are not forthcoming, it would be necessary to restrict the growth in consumption to a correspondingly greater extent Indeed, the postulated increase in consumption itself rests on the assumption that national income would increase by 25 per cent in response to an investment programme of Rs. 6,200 crores and that the necessary rate of saving for achieving this order of investment will materialise. The problem of mobilizing resources as required is discussed in the next chapter. But it is noteworthy that the essence of economic development lies precisely in this that unless increases in consumption are held in check to the extent required for realising the rate of investment, the expected increase in national income and standards of consumption cannot materialise. It is also clear that an investment of Rs. 6,200 crores will result in an increase of 25 per cent in national income only if a number of assumptions are satisfied—assumptions about coordination in planning, the avoidance of waste, the requisite effort at organisation and leadership for enlisting the support and cooperation of the people in taking to improved methods of production and for creating a climate favourable for development. The achievements of a plan cannot be read simply from a list of programmes. They depend primarily on the energy and organisational ability brought to bear on the implementation of programmes and policy measures at all levels.

52. Problems relating to employment pattern and policies and the employment potential of the plan are discussed in Chapter V. Additional employment likely to be generated over the second plan period in sectors other than agriculture is estimated at 8 million. In this estimate only full-time employment has been taken into account There are in the plan programmes of development such as irrigation and land reclamation which will reduce under employment to some extent and may also absorb new persons. In the present socio-economic structure in the rural areas the distribution of a given quantum of work or income cannot be split up as between employment for the underemployed and fulltime employment as such. With the increase in agricultural production envisaged in the plan and the substantial increase in employment opportunities outside agriculture, there will be a significant increase in incomes and a reduction in underemployment in the primary sector- The promotion and reorganisation of village and small-scale industries along the lines suggested in the plan will provide fuller employment to large numbers of persons engaged in these industries. Altogether, in aggregative terms, the plan envisages a

sufficient increase in the demand for labour to match the increase in the labour force amounting to 10 million.

APPENDIX PLAN OUTLAY BY STATES(Rs. crores)

First Plan Second Plan1 2

Andhra 75.9 119.0Assam 28.1 57.9Bihar 104.4 194-2Bombay 1813 266.2Madhya Pradesh 57.5 123.7Madras 97-0 173.1Orissa 852 100.0Punjab 124.0 1263Uttar Pradesh 165.9 253.1West Bengal 151.9 153-7total 'A' states 1071.2 1567.2Hyderabad 57.0 100Madhya Bharat Mysore 36.1 53.2 67- 80Pepsu 392 36.3Kajasthan 62-8 97'Saurashtra 29.8 47.7Travancore-Cochin 35.4 72.0Jainmu & Kashmir 132 33.9total 'B' states . 326.7 535.4Ajmer 3.6 7.9Bhopal 9.3 14.3Coorg 2.0 3.8Delhi 10.5 17.0Himadial Pradesh 7.5 14.7 Kuteh 4.8 7.9Manipur 22 62Tripura 3.0 8.5Vindhya Pradesh 93 24.9total 'C' states . 52.2 105.2Andaman & Nicobar Islands 15 5.9North East Frontier Agency 4.4 95Pondicheny 0.8 4.8total 6.7 102Centre's share of expenditure on D.V.C . 12-2National Extension Service and Community Projects

0.7*

Grand Total 1456.8 2240.9

*This is in addition to V.s. 187 crores included in the Plan allotments for individual Stales- For national extension and community projects the Plan provides Rs 200 cmres, of which about Rs. 12 crores are shown at the Centre. Provisional allotments under this head were made to individual Stales when State Plans were formulated; these are to be reviewed when certain details of the pnogrammer have been determined.

3rd Five Year Plan

THE THIRD PLAN IN OUTLINE

PHYSICAL TARGETS

the principal aims of the Third Five Year Plan have been set out in the preceding Chapter. If these aims are to be achieved, it is essential that a certain minimum development should take place in different sectors of the economy during the next five-year period. The physical targets of the Third Plan have been formulated keeping these minimum needs in view. A detailed list of these targets is given in Annexure I to this Chapter. It is estimated that national income should go up by about 30 per cent and per capita income by about 17 per cent over the next five years. A few selected targets are included in the Table below with the object of giving a synoptic view of the Pian :

Table 1 Selected targets

item unit 1960-61 1965-66 percentage increase in 1965-66 over

1960-61index number of agricultural production .

1949-50=100 135 176 30

foodgrains production million tons 76 100 32nitrogenous fertilisers consumed

000 tons of N 230 1000 335

area irrigated net (total) million acres 70 90 29cooperative movement : advances to farmers Rs. crores 200 530 165index number of industrial production

1950-51=100 194 329 70

production of : steel ingots million tons 3.5 9"02 163aliminium 000 tons 18.5 80" 332machine tools (graded) value in Rs. croreg 5.5 30.0 445sulphuric acid 000 tons 363 1500 313petrolium product* million tons 5.7 9,9 70cloth : mill made million yards 5127 "5800 13handloom, powerloom and khadi

million yards 2349 3500 49

total million yards 7476 9300 24minerals : iron ore million tons 10.7 30.0 180coal million tons 54.6 97.0 76exports Rs. crores 645 850' 32power : installed capacity million kW 5.7 12.7 123railways : freight carried million tons 154 245 59road transport : commercial vehicles on road

000 numbers 210 365 74

shippil g : tonnage lakh GRT 9.0 10.9 21general eductaion : students in schools million numbers 43.5 63.9 47technical education : engineering and technology—

degree level intake 000 numbers 13.9 19.1 37health : hospital beds 000 numbers 186 240 29doctors practicing 000 numbers 70 81 16consumption levels : food calories per capita

per day2100 2300 10

cloth yards per capita per annum

15,5 17.2 11

PHYSICAL PROGRAMMES

2. The increase in population, the growing expectations of the people and the urgent need for attaining the stage of self-sustained growth over the next two or three Plan periods make it essential that there should be every possible effort to achieve these targets during the next five years. In addition, certain measures must be taken during the Third Plan period itself in preparation for the Fourth Plan. The physical programmes included in the Third Plan have been formulated with both these objectives in view. The total cost of completing all these programmes exceeds Rs. 8000 crores for the public sector, and is estimated at Rs. 4100 crores* for the private sector.

3. It is important that programmes for industrial development, including power, transport, techn''cal education and scientific research, should proceed in a connected manner in accordance with an approved scheme of priorities so that. as the requisite foreign exchange and personnel become available, corresponding internal resources are also found and raoid progress is assured. In fields like agrcu^ure, small industries and social services, where there is scope for attracting a great deal of local community effort and public participation and where imported supplies are not a limiting factor, the effort has to be related to the maximum physical capacity for implementation and should not fall below the minimum needs of the country. In fact, as the productive prefects in the industrial and agricultural sectors are implemented and additional output becomes available, it should be possible to raise additional resources for expanding the scope of some of the protects which have large employment potential but do not require much foreign exchange outlay.

4. These considerations suggest that the phvsi'cal programmes to be accepted for implementation over the five vear period should not be altogether limited by the financial resources immediately in s^ht at the stage of drawing up the Plan, although the outlays have necessarily to be regulated with reference to the resources actually mobilised from year to year. Past experience has shown that if a Plan for a five-year period is prepared only in terms of the financial resources in s^ht at the time of the preparation of the Plan, the fullest use cannot be made of all the opportunities which present themselves in the course of the implementation of the Plan.

FINANCIAL PROVISIONS

5. The estimate of financial resources has been placed for the present at Rs. 7500 crores. Recent studies, however, indicate that there are possib'lities of raising additional resources if certain measures are taken for mobilising the savings of the country. In fact, to the extent that the physical targets included in the Plan are achieved, the prospects of raising additional financial resources will correspondingly improve. As a result of the support which India's development p'ans are receiving from friendly countries and from the International Bank of Reconstruction and Development and other international agencies, there is reason to hope that the shortage of fore^ exchange may not be a major impediment in the realisation of the goals of the Third Plan. On the other hand, as the Plan proceeds, it may be found that some of the projects approved for implementation may not be completed within the Third Plan period, and a part of the investment may in fact be deferred to the early phase of the Fourth Plan. A cons-'derable proportion of the projects, especially in industry and mining, have relatively long gestation periods and frequently involve difficult technical problems. Delays in designing and setting up industrial plants or undertaking complementary development or in securing equipment and components may well extend the priod of completion of some of these projects bevond the Third Plan. Whatever the consequential adiust-menfs, special care would, however, be taken to ensure that projects which are essential for achieving the key targets included in the Third Plan are completed in time.

6. The following Table gives the distribution of the financial outlay of Rs. 7500 crores under major heads :

Table 2 Financial provisions(Rs. crores)

Second plan Third plan—financial provisions

head total expenditure

percentage

States

Union Territories

Centre

total percentage

agriculture and community development

530 11 919 24 125 1068

14

maior and medium irrigation 420 9 630 2 18 650 9power 445 10 880 23 109 101

213

village and small industries 175 4 137 4 123 264 4organised industry and minerals. 900 20 70 neg 1450 152

020

transport and communications . 1300 28 226 35 1225 1486

20

social service and miscellaneous 830 18 863 87 350 130 17

0inventories. — — — — 200 200 3total 4600 100 3725

@175 3600 750

0100

(@ This is subiect to the observation made in the following paragraph and paragraph 27 of Chapter VI. * This excludes the estimated transfer of Rs. 200 crores from the public to the private sector.

Out of the total financial outlay of Rs. 7500 crores in the public sector, investment* is estimated at Rs. 6300 crores and current outlay,'"* representing expenditure on staff, subsidies, etc. at Rs. 1200 crores. These figures include only that part of the expenditure on development programmes of local bodies like municipalities panchayats, etc. as is financed by Central and State Governments as part of their Plan expenditure. They do not include the contributions which these local bodies make out of their own resources. Similarly they do not include the contributions in cash or in kind which are made by the local people in projects of a local character involving local participation. Expenditure on development services and institutions established upto the end of the Second Plan, estimated at about Rs. 3000 crores for the five year period, falls outside the Third Plan outlays shown in Table 2.

7. In the Table above, the financial provision for the States is shown as Rs. 3725 crores. As against this the total cost of the physical programmes included in State plans amounts to Rs. 3847 crores. The revenues of States have, however, recently shown marked improvement. It is considered that given the necessary additional taxation, States should find it possible to finance fully the physical programmes included in their plans. Thus the gap between physical programmes and financial resources such as it may be, relates mainly to the centre. In the programmes of the Central Government those dependent on external resources constitute a large proportion, for instance, industries, minerals. transport and communications- As foreign exchange becomes available, necessary steps will have to be taken to raise the requisite rupee resources.

8. As has been mentioned earlier, the Plan includes outlays not only by the public sector but also by the private sector. Investment by the private sector is estimated at Rs. 4100 crores. The break-up of the public and the private sector investment under major Plan heads is given below :

Table 3 Investment in Second and Third Plans(Rs. crores)

head public Second private

plan total

percentage public Third plan private

total percentage

agriculture and community

development 210 625 835 12 660 800 1460 14major and medium irrigation

420 * 420 6 650 * 650 6

power 445 40 485 7 1012 50 1062 10village and small industries

90 175 265 4 150 275 425 4

organised industry and minerals .

870 675 1545 23 1520 1050 2570 25

transport an'i communications

1275 135 1410 21 1486 250 1736 17

social services and miscellaneous

340 950 1290 19 622 1075 1697 16

inventories — 500 500 8 200 600 800 8total 3650 3100{ 6750 100 6300 4100f 10400 1009. The foreign exchange requirement for an investment of 10,400 crores is estimated to be over Rs. 2030 crores. The level of investment, public and private, is expected to rise from about Rs. 1600 crores in the last year of the Second Plan to about Rs. 2600 crores at the end of the Third. Corresponding figures for the public sector alone are Rs. 800 crores and Rs. 1700 crores.

10. It will be seen from Table 3 that the Third Plan provides for an increase of about 54 per cent in total investment-70 per cent in public sector investment and 32 per cent in private sector investment. The proportion of the public sector will be, however, higher to the extent that the public sector outlay is raised above the financial provision of Rs. 7500 crores, near to the physical Plan of over Rs. 8000 crores.

STATE PLANS

11. Out of the programmes included in the public sector of the Third Plan the plans of States account for Rs. 3847 crores and of Union Territories for Rs. 175 crores. The remaining programmes fall within the plans of the Central Ministries. Details have been given in Annexure II to this Chapter. Provisions in the States and at the Centre have been made on the principle that generally development schemes to be implemented by State Governments should form part of the State plans and only certain limited categories of schemes should be shown in the plans of Central Ministries as being 'sponsored' by the Central Government. In this way, an attempt has been made to broaden further the scope of the plans of States and facilitate the integrated working of their development programmes.

'"Investment is expenditure on the creation of physical assets (e.g. buildings, plant and equipment), including expenditure on personnel required for putting up these assets. The expression corresponds broadly to expenditure on capital accouni

**Current outlay corresponds broadly to expenditrure on revenue account on Plan schemes: it is expenditure othe' than that. classified as 'investment'.

•{•Included under agriculture and community development. ^Excludes transfers from public to private sector.

4th Five Year PlanPLAN IN OUTLINE

Size of the Plan and Pattern of Outlay

A total outlay of Rs. 24,882 crores is envisaged for the Fourth Plan. of the aggregate outlay, Rs. 15,902 crores is in respect of the public sector Plan and Rs, 8,980 crores for the private sector. In the public sector Rs. 13,655 crores have been provided for investment and Rs. 2,247 crores for current outlay. The total investment for the creation of productive assets aggregates to Rs. 22,635 crores. Table I indicates the distribution of the public and private sector outlays by major heads of development.

3.2. The estimates of development outlays do not include most of the expenditures by local bodies out of their own resources on development schemes. Expenditure on the maintenance of developmental services and institutions established during the earlier Plans as well as the Annual Plan years (1966-69) will be provided for in the normal budgets and does not form pan of Plan outlay. Table 2 shows the pattern of investment by the public and private sectors as envisaged in the Fourth Plan compared to the pattern in the Third Plan

Table 1 Fourth Plan Onllay and Investment Public and Private Sectors(Rs. crores)

Sl No.

head of development

public sector private sector public and private sectors

total outlay

current outlay

investm

-ent

% distribution of total outlay (col. 2)

investment

%distribution of investmen (col. 6)

total investment (44-6)

total outlay (2+6)

% distribution of total outlay (col. 9)

(0) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)1 agriculture and

allied sectors .2728 610 2118 17.1 1600 17.8 3718 4328 17.4

2 irrigation and flood control .

1087 14 1073 6.8 — — 1073 1087 4.4

3 power 2448 — 2448 15.4 75 0.8 2523 2523 10.14 village and

small industries .

293 107 186 1.8 560 6.2 746 853 3.4

5 industry and minerals

3338 40 3298 21.0 2000 22.3 5298 5338 21.4

6 transport and communications

3237 40 3197 20.3 955 10.6 4152 4192 16.8

7 education 823 545 278 5.2 50 0.6 328 873 3.58 scientific

research140 45 95 0.9 — — 95 140 0.6

9 health 434 303 131 2.7 — — 131 434 1.710 family planning 315 262 53 2.0 — — 53 315 1.3

11 water supply and sanitation

407 405 2.6 — — 405 407 1.6

12 housing, urban and regional development

237 235 1.5 2140 23.9 2375 2377 9.6

13 welfare of backward classes

142 142 — 0.9 — — 142 0.6

14 social welfare 41 41 — 0.3 — — — 41 0.215 labour welfare

and craftsmen training

40 20 20 0.3 20 40 0.2

16 other programmes

192 74 118 1.2 — 118 192 0.8

17 inventories — — — — 1600 17.8 16.00 160 6.4

Total 15902

2247 13658 100.0 8980 100.0 22635 24882

100.0

FOURTH PLAN OUTLAY : PUBLIC AND PRIVATE SECTORS

PUBLIC SECTOR OUTLAY AND EXPENDITURE

Table 2 : Pattern of Investment : Third and Fourth Plans(Rs. crores)

Sl. No. head of development third plan fourth plan public sector

private sector

total percentage distribution of col. (4)

public

sector

private sector

a-total

percentage distribution of col. (8)

(0) (1) (2) (3) (4) (5) (6) (7) (8) (9)1 agriculture and allied sectors. 660 800 1460 14.0 2118 1600 3718 16.42 irrigation and flood control. 650 — 650 6.3 1073 — 1073 4.7

3 power 1012 50 1062 10.2 2448 75 2523 11.24 village and small industries 150 275 425 4.1 186 560 746 3.35 industry and minerals 1520 1050 2570 24.7 3298 2000 5298 23.46 transport and

communications3486 250 1736 16.7 3197 955 4152 18.3

7 social services and other programmes

622 1075 1697 16.3 1335 2190 3225 15.6

8 inventorie- 200 600 800 7.7 — 1600 1600 7.19 Total 6300 4100 10400 100.0 1365

58980 2263

5100.0

3.3 Table 3 compares the proposed public sector outlay in the Fourth Plan with the expenditure in the Third Plan and Annual Plans (1966—69) under each head of development. The total public sector outlay nf Rs. 15.902 crores in the Fourth Plan includes Rs. 8090 crores as outlay on Central schemes, Rs. 781 crores for Centrally sponsored schemes, Rs. 6606 crores in the States and Rs. 425 crores in the Union Territories. Compared to the Third Plan, substantially increased provision has been made in almost all^secfors. The more noteworthy increases are in respect of agriculture and allied sectors, power, industry, scientific research, family planning and water supply.

Table 3: Public Sector Outays in the Fourth Plan and Expenditure in the Third Plan and Annual plans (1966—69)

(Rs. crores)

Sl. No. head of development third plan 1966—691 fourth plan(0) (1) (2) (3) (4)1 agricniture and allied sectors 1088.9 1166.6 2728.22 irrgation and flood control 664.7 457.1 1086.63 power 1252,3 1182.2 2447.64 village and small industries 240.8 144.1 293.15 industry and minerals 1726.3 1575.0 3337.76 transport and communications 2111.7 1239.1 3237.37 education 588.7 322.4 822.68 scientific research 71.6 51.1 140.39 health 225.9 140.1 433.510 family planning 24.9 75.2 315.011 water supply and sanitation 105.7 100.6 407.312 housing, urban and regional

development127.6 63.4 237.0

13 welfare of backward classes 99.1 68.5 142.414 social welfare . 19.4 12.1 41.415 labour welfare and craftsmen trainning 55.8 35.5 39.916 other programmes 173.1 123.5 192.317 Total 8576.5 6756.5 15902.2

'Subject to final adjustments.

Central Assistance

3.4. The principles of allocation and the pattern of Central assistance to the State have also undergone a change. Many States had expressed a view that the Central assistance for State Plans should be distributed in accordance with certain objective criteria. The question was, therefore, placed before the Committee of Chief Ministers of the National Development Council. It was decided that after providing for the requirements of the States of Assam, Nagaland and Jammu and Kashmir, the Central assistance to the remaining States for the Fourth Plan be distributed to the extent of 60 per cent on the basis of their population, 10 per cent on their per capita income if below the national average and 10 per cent on the basis of tax effort in relation to per capita income, and that another 10 per cent be allotted in proportion to the commitments in respect of major continuing irrigation and power projects. The remaining 10 per cent. it was decided, should be distributed among the States so as to assist them in trackling certain special problems, like those relating to metropolitan areas, floods, chronically drought affected areas and tribal areas.

3.5. Hitherto the Plan schemes under different heads of development had their own patterns of assistance and the States could draw their grants or loans accordingly. Outlays under certain heads of development as also on some of the specified schemes were earmarked and could not be diverted to other heads of development or schemes. This involved procedure of estimation, intimation and payment of Central assistance led to a complicated system of accounting and delays in final financial adjustments.Another feature of this system was that comparatively more advanced States were able to obtain a larger proportion of Central assistance in the form of grant even though the total quantum of assistance from the Centre was less in comparison with the less advanced States as they could adopt, in view of their revenue position being comfortable, such schemes as would attract larger amounts of grant. In order to simplify the procedure for release of Central assistance, to avoid adoption of standard schemes unsuited to local conditions and needs as well as to ensure equity among States in regard to the grant assistance for the Plan, it has been decided that in future there will be no schematic patterns c'f assistance. Central assistance will not be related to any specific schemes or programme under the State Plans but would be give into the States through block grants and block loans. Each State will get a fixed proportion (30%) of Central assistance in the form of grant and the balance (70%) by way of loans. In order to ensure that the overall priorities of the Plan are adhered lo, outlays under certain heads of subheads of development and specified schemes will, however, be earmarked and will not be diverted to other heads of development. The distribution of Central assistance to the different States and the total size of their Plans are given in Annexure II. The details of distribution of outlays by each head of development for the Centre and the Centrally sponsored schemes are given in Annexures IV and V.

3.6. States will now have much greater initiative in the formulation of schemes and programmes. Till now the State Plans had been formulated by and large in terms of standard schemes which had been approved by the Central Ministries and the Planning Commission and which carried with them a quantum of assistance in the shape of loans and grants.

3.7. The decision that 60 per cent of the assistance should be distributed on the basis of population and that the States in which per capita incomes were below the national average should get another 10 per cent of the total assistance is a step towards the reduction of regional imbalances.

3.8. The distribution of Central assistance according to the formula accepted by the National Development Council reduces the uncertainties which have till now attended the process of fixing the size of the Five Year and Annual Plans of States. Central assistance being pre-determined, the size of the States' Plans will now be dependent largely on the efforts of the individual State to marshal its own resources for Plan programmes.

Centrally Sponsored Schemes

3.9. Ever since the First Plan, a variety of programmes had been launched through schemes in which uniform patterns of staffing and administrative organisations were laid down by the Centre. Thef usually carried with them substantial Central assistance during the Plan period. These were called Certrally

sponsored schemes. The responsibility for financing the committed expenditure for these at the end of the Plan fell on the States,

3.10. The States felt that most of the programmes envisaged in these schemes could be more appropriately carried out by them through thtir own Plans. The Administrative Reforms Commission had also expressed a similar view in their report on the Machinery for Planning and suggested res-Iriction of the number of Centrally sponsored schemes to the barest minimum and simplification of their operation. It has been decided that in future only those Centrally sponsored schemes will be taken up which fulfil the following criteria :

a. that they relate to demonstrations, pilot projects, surveys and research;b. that they have a regional or inter-State character;c. that they require lump sum provision to be made until they could be broken down territorially; andd. that they have an overall significance from the all-India angle.

3.11. The position was reviewed in the light of the above considerations and a shorter list of Cen-rally sponsored schemes was drawn up a^d approved by the Committee of the National Development Council in September 1968. The list contained 52 schemes compared to 92 originally included. Sub-sequantly the Planning Commission and the Ministry of Food, Agriculture, Community Development and Cooperation decided that the seven schemes to be administered by ICAR may be classified as purely Central schemes with the result that in the Fourth Five Year Plan 1969—74 the tot^l number of Centrally sponsored schemes is 47. Those schemes will hereafter be wholly financed by the Central Government. The outlay on these schemes is Rs. 781 crores. The Centrally sponsored schemes are mainly under agriculture, health, family planning and welfare of backward classes.

3.12. The distribution of outlay between the Centre, Centrally sponsored schemes. States and Union Territories under major heads of development is shown in table 4. Annexure I gives more detailed, information about the expenditure under variousr heads of development in the Third Plan and Annual Plans (1966—69) and the corresponding outlays in the Fourth Plan:

FOURTH PLAN (1969-74) PUBLIC SECTOR OUTLAY

STATE PLAN OUTLAYS AND EXPENDITURE

Table 4 : Distribution of Public Sector Outlays : Centre, Centrally sponsored States and Union Territories(Rs. crures)

Sl. No.

head of development centre centrally sponsored

union territorie'

states total

(0) (1) (2) (3) (4) (5) (6)1 agriculture and allied

sectors 1104.26 126.83 71.58 1425.51 2728.18

2 irrigation and flood control

23.50 — 12.68 1050.39 1086.57

3 power 424.72 22.00 81.78 1919.07 2447.57 4 vllage and small

industries 148.65 5.10 10.41 128.97 293.13

5 industry and minerals 3150.86 — 3.79 183.06 3337.716 transport and 2622.00 42.00 90.72 482.54 3237.26

communications7 education 241.00 30.00 51.77 499.89 822.668 scientific research 140.26 — — 140.26 -

9 health 53.50 176.50 19.28 184.25 433.5310 family planning — 315.00 — 315.00

11 water supply and sanitation

3.80 2.00 43.33 358.16 407.29

12 housing, urban and regional development

48.60 — 21.33 167.10 237.03

13 welfare of backward classes

6.50 59.50 4.95 77.43 142.38

14 social welfare 27.43 2.00 1.41 10.54 41.3815 labour welfare and

craftsmen training 10.00 — 2.88 27.02 39.90

16 other programmes 90.68 — 9.09 92.54 192.3117 Total 8089.76 780.93 425.00 6606.47 15902.16

3.13. The outlay under agriculture does not fjlly reflect the anticipated ste up in as much as does not take into account the substantial investment to be financed in this sector by some of the finan:ial instituions, namely, agro-industries corporations, land development banks and central cooperative banks. The investment in agriculture to be financed by these institutions from resources other than Plan outlays would amount to Rs. 950 crores. The Rural Electrification Corporation will make a supporting investment of Rs. :150 crores. The relevant figures are:—

Table 5 : Investment in Agriculture from Different Financial Institutions

investment loans advanced

1969—74

Sl. No.

institution — 1966-67

1967-68

1968-69

total investment loans to be financed

a-plan outlay

other resources to be raised

(0) (1) (2) (3) (4) (5) (6) (7)1 agriculture refinance corporation 2 5.7 10.0 200.0 200.0 2 agro-industries corporations — ''— 100.0 50.0 50.0

3 land development banks 60.0 78.0 100.0 700.0 200.0 500.04 central cooperative banks 15.0 15.0 15.0 150.0 150.0

5 indian dairy corporation — — — 95.0 95.0 6 commercial banks — — — 250.0 250.0

7 Total 77.1 98.7 125.0 1495.0 545.0 950.0

Centres Plan

3.14. The details of the requirements of Central projects were discussed with the Ministries concerned. Keeping in view the priorities and the essential needs of the economy, certain adjustment'; in the outlays of the various sectors have been made.While considering tile programmes to be included in the Plan in the Central sector, an attempt has also been made to identify more clearly and fully the programmes

which were being financed through certain Central institutions to which funds wt-re flowing partly from the Central Government resources and partly from banking and other sectors. In

30 FOURTH FIVE YBAR PLAN

particular, mention has to be made of the resources to be raised by the Food Corporation of India for building up buffer stocks of foodgrains; and by term-lending institutions like the Industrial Development Bank. the Industrial Finance Corporation, the Industrial Credit and Investment Corporation and the Agricultural Refinance Corporation for tinancing Plau programmes.

State Plans

3.15. In the light of the reassessment of reasouces after the award of the Fifth Finance Commission and special accommodation to States in respect of their non-Plan dehcits, the State Plan outlays have now been put at Rs. 6606 crores for the Fourth Plan period. This will be supplemented by an outlay of Rs. 781 crores for Centrally sponsored schemes mainly under agriculture, health, family planning and welfare of backward classes. The Central Phin also includes provision to the extent of Rs. 545 crores by way of support to the State programmes through institutions like Agricultural Refinance Corporation, Land Development Banks, Rural Electrification Corporation and Indian Dairy Corporation. Provision has also been made in the Central sector Plan for a few schemes which will directly benefit the States. Among them are the schemes for small farmers and agricultural labourers (Rs. 115 crores), dry farming (Rs. 20 crores) and area development (Rs. 15 crores). Thus a significant proportion cf the additional outlay in the Central sector Plan is designed to support the development programmes included in the State Plans and the total Plan expenditure in States (excluding purely Central sector programmes, as for railways, large industries and ports) will be substantially larger than the outlays of State Plans.

Table: Slate Plan Outlay by Major Heads of Development (Rs. crores)

Sl.No, head of development third plan annual plans 1966—691

fourth plan

(0) (1) (2) (3) (4)1 agriculture and allied sectors 972 779 14262 irrigation and flood control 655 448 10503 power 1139 970 19194 industry and minerals 203 146 3125 transport and communications 294 210 4836 social services 844 456 13247 other programmes 58 43 928 Total 4165 3052 6606

Subject to final adjustments

3.16. The targets aimed at and the results anticipated in selected fields are indicated in table 7 :

Table 7 : Selected Targets and Estimates

Sl. item no. unit 1960-61 actuals

1965-66 actuals

1968-69 estimated

1973-74 targets./ estimates

(0 (1) (2) (3) (4) (5) (6)

)agriculture and allied sectors 1 foodgrains production mill. tonnes 82 72 981 1292 sugarcane (in terms of gur) mill. tonnes 11.2 12.1 12.01 153 oilseeds mill. tonnes 7 6.3 8.51 10.54 cotton mill. bales 5.3 4.8 61 85 jute mill. bales 4.1 4.5 6.21 7.46 tobacco thou. tonnes 307 298 350 4507 high yielding varieties (area

covered)mill. hectares — — 9.2 25

consumption of fertilisers 8 nitrogenous (N) thou. tonnes 210 550 1145 32009 phosphatie (P,0s) thou. tonnes 70 130 391 140010 potassic (K.a 0) thou. tonnes 26 80 160 90011 plant protection (area covered) mill. hectares 6.5 16.6 40 8012 short and medium term loans

advanced by primary cooperative credit societies

Rs. crores 203 342 490 750

13 membership of agricultural cooperative credit societies

mill. numbers 17 26 30 42

area irrigated (gross) 14 major and medium mill. hectares 13.1 15.2 16.9 20.815 minor mill. hectares 14.8 17 19 - 22.216 agricultural pumpssts energised thou.

numbers191.8 512.9 1087.6 2337

AGRICULTURE AND ALLIED PROGRAMMES

SELECTED OUTPUT AND INPUT

INDUSTRY AND MINERALS

Selected Production Targets and Achievements

Table 7—Contd.

(0) (1) (2) (3) (4) (5) (6)industry and minerals17 steel ingots. mill. tonnes 3.42 6.5 6.5 10.818 alloy and special steel thou. tonnes — 40 43 22019 aluminium thou. tonnes 18.3 62.1 125.3 22C

20 machine tools Rs. erores 7 29 24.7 6521 sulphuric acid thou. tonnes 368 662 1038 250022 caustic soda thou. tonnes 101 218 304 50023 soda ash thou. tonnes 152 331 405 55024 refinery products (in terms of

crude throughput)mill. tonnes 5.8 9.4 15.4 26.0

25 petroleum crude mill tonnes 0.41 3.02 6.06 8.526 paper and paper board thou. tonnes 350 558 647 85027 plastics thou. tonnes 9.5 31.3 58.1 225fertilisers production 28 nitrogenous(N) thou. tonnes 101 232 541 250029 phosphatic (PaO;) thou. tonnes 53 123 210 90030 cement mill. tonnes 8 10.8 12.2 18cfort 31 mill made mill. metres 4649 4401 4297 510032 man-made fabrics mill. metres 546 870 1090 150033 handloom, powerloom and

khadimill. metres 2067 3141 3596 4250

minerals34 iron ore mill. tonnes 11 24.5 28.1 51'435 coal excluding lignite mill. tonnes 55.7 67.7 71.5 93.5WMW36 installed capacity mil!, kw. 5.65 10.17 14.29 23transport37 railway freight originating . mill. tonnes 156 203 204 26538 surfaced roads thou. kms. 236 287 325 38539 commercial vehicles on road thou. nos. 225 333 386 58540 shipping tonnage thou. grt 857 1540 2140 3500education general education41 students in schools mill. numbers 44.7 66.3 74.3 96.4technical education—admission capacity42 degree thou. numbers 13.8 24.7 25 2543 diploma thou. numbers 25.8 48 48.6 48.6Health44 hospital beds thou. numbers 185.6 240.1 255.7 281.645 doctors practising thou. numbers 70 86 102.5 137.9family planning46 rural centres . numbers 1100 3676 4326 522547 rural sub-centres . numbers — 7081 22826 3175248 urban centres . numbers 549 1381 1797 1856

'base level.

3.17. On the basis of the programme of investments proposed for the Fourth Plan and the level of outputs expected to be reached in different sectors by 1973-74, it is estimated that the overall 'at^ of growth

during the Fourth Plan will be about five and a half per cent a year. Detailed sectors! estimates are presented in Table 8.

Table 8 : Estimates of Net National Product : 1968-69 to 1973-74(Rs. crores at 1968-1969-prices)

Sl. No.

item 1968-69 1973-74

(0) (1) (2) (3)1 agriculture 4250 2 forestry and logging 4.1 533 fishing 165 4 wb-total 14864 1895)5 mining and quarrying 317 4656 large seal; msnufactiiring. 2242 34907 small scale manufacturing 3559 30118 construction 1142 17229 electricity, gas and water supply 237 27010 sub-total 5497 805811 transport and communications 1309 178512 railways 469 59513 communications 181 26514 transport by other means, 659 92515 trade, storage, hotels and restaurants 3105 435716 sub-total 44!4 614217 banking and insurance 440 55418 real estate and ownership of dwellings 675 79719 public administration and defence 1308 144420 other sen ices 1873 236021 Sub-total 4296 515522 net domestic product 29071 3830623 net factor income from aborad (-)270 (-)40824 net national product at factor cost or 28801 37898national income or or

28800 37900

3.18. According to the estimates of the Registrar General, population is expected to grow at the rate of 2.5 per cent per year during the five year period. The increase in per capita income over the Plan period will be about 3 per cent per year. In order to realise the rate of growth postulated, it will be necessary to. step up the rate of domestic savings from the level of 8.8 per cent in 1968-69 to 13.2 per cent and that of investment from 11.3 per cent to 14.5 per cent by the end of the Plan. The increase in foodgrains output visualised in the Plan will pnab'e the country to dispense with concessional food imports by 1971. Efforts will be made to limit the growth of non-food imports to 5.5 per cent per year while securing an annual increase of 7 per cent in exports. As a result, the requirements of foreign aid, net of debt repayment and interest payments, in the" terminal year of the Plan will be brought down to about half the level in 1968-69. A detailed discussion of the programmes designed to achieve these objectives appears in 'the succeeding chapters. Table 9 'yves a few selected macro-economic pro jections for the Fourth Plan :

Table 9 : Macro-Economic Projections : 1968-69 and 1973-74

Sl. No. unit 1968-69 1973-74(0) (1) (2) (3) (4)1 national-incomeR' : at crores 1968-

69 prices28803 37900

2 population (mid year-october 1) million 527 5963 per capita income rupees 546 6364 domestic savings as percentage of national

incomeper cent 8.8 13.2

5 net investment as percentage of national income per cent 11.3 14.5

POWER AND TRANSPORT

SELECTED TARGETS AND ACHIEVEMENTS

EDUCATION, HEALTH AND FAMILY PLANNING

SELECTED TARGETS AND ACHIEVEMENTS

ANNEXURE I Public Sector Outlay in the Fourth Plan and Expenditure ill the Third Plan and Anticipated Expenditure during 1969. (Rs. crores)

Sl. No. head of development third plan 1966-69 Fourth Plan(0) (1) (2) (3) (4)1 agriculture and allied sectors 1083.9 1166.6 2728.22 agricultural production including

research and education 202.5 252.5 505.2

3 development of small fanners and agricultural labour

— — 115.0

4 minor irrigation 270.1 314.1 515.75 soil conservation 77.0 87.9 159.46 area development 2.3 13.1 38.37 animal husbandry 43.4 34.0 94.18 dairying and milk supply 33.6 25,7 139.09 fisheries 22.5 36.9 83.310 forests 46.0 44.1 92.511 warehousing, marketing and storage 27.4 15.0 94.012 food processing and subsidiary food . — — 18.613 central support to financial institutions — 40.0 324.0

(agricultural sector) 14 buffer stocks — 140,0 255.013 cooperation 75.6 63.9 178.616 17 community development panchayats 276.8 99.4 115.518 irrigation, food control, etc. 664.7 457.1 1086.619 irrigation 583.2 414.1 953.820 flood control, etc. 81.5 43.0 132.821 power 1252.3 1182.2 2447.622 village and small Industries 240.8 144.1 293.123 industry and minerals 1726.3 1575.0 3337.724

25

organised industries

mineral development

1726.3 1575.0 2676.6

26 transport and communications 2111.7 1239.1 661.127 railways 1325.5 525.8 1050.028 roads 439.6 308.2 870.929 road transport 26.7 53.7 92.730 ports and harbours 92.9 55.3 195.031 shipping 40.4 25.4 140.832 inland water transport 4.0 6.2 11.733 lighthouses 4.0 1.7 7.034 civil air transport and air corporations 48.9 69.7 203.235 tourism 4.7 8.7 36.036 posts and telegraphs 110.3 117.8 492.237 other communications 6.4 9.3 27.838 broadcasting 8.3 12,0 40.039 farakka barrage — 45,3 70.040 social services 1353.6 894.3 2579.441 general education and cultural

programmes 463.9 240.9 677.2

42 technical education 124.8 81.5 125.443 scientific research 71.6 51.1 140.344 health 225.9 140.1 433.545 family planning 24.9 75.2 315.046 water supply 105.7 100.6 407.347 48 housing

urban and regional development .127.6 45.51 17.9 237.0

49 welfare of backward classes 99.1 68.5 142.450 social welfare 19.4 12.1 41.451 labour welfare and craftsman

training 55.8 35.5 39.9

52 pubiic cooperation 1.9 69 —53 local works 13.7 — —54 rural works 19.3 18.5 —55 other programmes 138.2 98.1 192.3

56 rehabilitation 48.4 39.5 66.057 statistics 4.4 11.7

58 information and publicity 4.0 12.5

59 state capital projects 25.4 30.7

60 special and backward areas 89.8 13.3 43.661 evaluation machinery 0.3 0.9

62 expansion of printing capacity 3.1 11.6

63 research programmes committee 0.6 0.6

64 others 7.5 14.7

65 Total 8576.5 6756.5 15902.3

Subject to final adjustments.

ANNEXURE II Fourth Five Year Plan—Stales' Outlays (Rs. crores)

Sl.No. state states' resoure central es assistan total oe outlay(0) (1) (2) (3) (4)1 Andhra Pradesh 180.50 240.00 420.502 Assam 41.75 220.00 261.753 Bihar 193.28 338.00 531.284 Gujarat 297.00 158.00 455.005 Haryana 146.50 78.50 225.006 Jammu and Kashmir 13.40 145.00 158.407 Kerala 83.40 175.00 258.408 Madhya Pradesh 121.00 262.00 383.009 Maharashtra 652.62 245.50 898.1210 Mysore 177.00 173.00 350.0011 Nagaland 5.00 35.00 40.0012 Orissa 62.60 160.00 222.6013 Punjab 192.56 101.00 293.5614 Rajasthan 82.00 220.00 302.0015 Tamil Nadu 317.36 202.00 519.3616 Uttar Pradesh 439.00 526.00 965.0017 West Bangal 101.50 221.00 322.5018 Total 3106.47 3500.00 6606.47

ANNEXURE III Fourth Five Yew Plan— territories' Outlays (Rs. crores)

Sl. No. union territory outlay(0) (1) (2)1 Andaman and Nicobar Islands 14.002 Chandigarh 7.75

3 Dadra and Nagar Haveli 2.304 Delhi 162.655 Goa, Daman and Diu 39.506 Himachal Pradesh 101.407 Laccadive, Amindivi and Minicoy Islands 2.008 Manipur 30.259 NEFA 17.9910 Pondicherry 12.5011 Tripiira 34.6612 Total 425

ANNEXURE IV Fourth Five Year Plan-Central Schemes (Rs. crores)

Sl.No. head of development outlay(0) (1) (2)1 agricultural aitd allied sector 1104.262 agricultural production 19.643 development of small farmers and agricultural labour 115.004 research and education 85.005 minor irrigation 8.006 soil conservation 0.637 area development 16.268 animal husbandry 12.509 dairying and milk supply . 97.2510 fisheries 28.0011 forests 3.7312 ware-housing, marketing and storage 87.0013 food processing and subsidiary food 16.1014 centra! support to financial institutions (agricultural

sector) 324.00

15 buffer stocks 255.0016 cooperation 30.2517 18

community development.1,Panchayats

5.80

19 irrigation,, flood control, etc 23.5020 irrigation . 15.5021 flood control, etc. 8.0022 power 424.7223 village and small industries 148.6524 industry and minerals 3150.8625 metals 1236.6826 machinery and engineering 174.7027 fertilisers and pesticides 495.9528 intermediates 212.09

29 consumer goods 42.3730 atomic energy 64.2531 other schemes 291.8732 mineral development 632.9433 transport and communications 2622.0034 railways 1050.0035 roads 303.0036 road transport 3.0037 ports and harbours 167.0038 shipping 140.0039 inland water transport 5.0040 lighthouses 7.0041 civil all-transport and air corporations 202.0042 tourism 25,0043 posts and telegraphs 492.2044 other comrminication' 27.8045 broadcasting 40.0046 farakka barrage 70.0047 social services 528.0948 general education and cultural programnw, 185.7049 technical education 55.3050 scientific research 140.2651 health 53.5052 water supply and sanitation 3.8053 housing, urban and regional development 48.6054 welfare of backward classes 0.5055 social welfare 27.4356 labour welfare and craftsmen training 10.0057 other programmes 90.6858 rehabilitation 66.0059 statistics 7.9160 information and publicity 5.0061 expansion of printing capacity 10.0062 research programmes committee 9.6063 others 1 1764 Total 8089.76

ANNEXURE V Fourth Five Yew Plan—Centrally Sponsored Schemes (Rs. crore)

Sl. No head of development outlay(0) (1) (2)1 agriculture and allied sectors 126.832 agricultural production 46.303 soil conservation . 29.44

4 animal husbandry. 5.255 fisheries . 6.006 forests 1.397 food processing and subsidiary food 2.508 cooperation 24.509 community development and panchayats . 11.4510 power 22.0011 village and small industries 5.1012 transport and communications 42.0013 roads 25.0014 ports and harbours 13.0015 Inland water transport 4.0016 social services 585.0017 general education and cultural programmes 18.2018 technical education 11.8019 health 176.5020 family planning 315.0021 water supply 2.0022 welfare of backward classes 59.5023 social welfare 2.0024 Total

5th Five Year PlanPLAN OUTLAYS AND PROGRAMMES OF DEVELOPMEN

I. Plan Outlays

The Draft Fifth Five Year Plan envisaged an outlay of Rs. 37250 crores in the public sector. The revised Plan outlay is now estimated at Rs 39303 crores excluding provision for inventories.

Public Sector Outlays

5.2. Not only has the Total Plan Outlay been increased from Rs 37250 crores to Rs 39303 crores but the outlay for the next two years has been reckoned at Rs 19902 crores as against the estimate for the first three years of the Plan which aggregate to Rs 19401 crores.

5.3. The break down of the revised outlay under major heads of development is as follows :

Fifth Five Year Plan Outlay-1974-79 (Rs. crores)

draft fifth plan revised fifth plan1974-77 1977-79 1974-79

(0) (1) (2) (3) (4)

1. agriculture and allied programmes

4935.00 2130.19 2513.40 4643.59

2. irrigation and flood control 2681.00 1651.50 1788.68 3440.183. power 6190.00 3513.05 3780.85 7293.904. industry and mining 9029.00 5205.35 4995.25 10200.605. transport and

communications7115.00 3552.67 3328.76 6881.43

6. education 1726.00 587,77 696.52 1284.297. social and community

services (including economic and general services but excluding education)

5074.00 2322.42 2444.35 4766.77

8. hill and tribal areas and NEC schemes

500.00 177.50 272.50 450.00

9. sectoral distribution not yet reported.

260.44 66.29 326.73

10 Total 37250.00 79400.89 79856.60 39287.491

1 Does not include an amount of Rs- 16 crores for which sectoral break-up is not worked out.2 Sectoral break-up does not include an amount of Rs. 203 crores added subsequently.

The outlays for the remaining years of the Plan are based on the following broad considerations : -

i. The plan priorities of the Draft Fifth Plan have been kept unchanged;ii. the outlays for on-going projects/schemes have been determined on the basis of present and

future demand, past performance, current completion schedules and escalation in costs ;iii. provisions have been made for new starts, including those which have long gestation periods,

keeping in view the demand pattern for 1981-82 and in some cases 1983-84 ; andiv. an attempt has been made to see that the investments are not only fruitful but that they also

ensure adequate return. In agricultural production, power, irrigation and education sectors targets were suggested keeping in view the national targets, natural resources of States and their present state of preparedness.

5.4. There is substantial step-up in the outlays on irrigation and flood control, power and industry and minerals. In agriculture, education and social services sectors though the revised outlays for the Fifth Plan as a whole are smaller, the outlays for the last two years of the Plan are higher than the outlays for the first three years.

20-Point Economic Programme

5.5. The 20-Point Economic Programme was announced by the Prime Minister on 1st July, 1975. The various constituents of the 20-Point Economic Programme, especially those which require financial investment, have been identified. Priority has been accorded to the implementation of the schemes falling under this programme. The outlays of the Centre, States and Union Territories for the remaining two years of the plan—1977-79 and the Fifth Plan are indicated below :

(Rs. crores)

1975-76 anticipated 1976-77 approved outlay

1977-79 proposed outlay

total

(0) (1) (2) (3) (4)centre 119.01 163.71 757.06 1039.78states and U.Ts.

1850.68 2173.97 5334.67 9359.32

Total 1969.69 2337.68 6091.73 10399.10

Annexures 21 and 22 indicate the proposed outlays for 1 977-79 in respect of different constituents of the 20-Point Economic Programme.

Overall Outlay

5.6. The distribution of the outlays by sectors, by Ministries, by States and by Union Territories is shown in Annexures 17-20, Briefly, the revised Plan outlays are as follows :

(Rs. crores)

1. central sector 19954,102. states 18265.083. union territories 634.064. hill and tribal areas 450.00Total 39303.24

2. Agriculture and Irrigation

5.7. Agriculture Production: The methodology followed in arriving at the projections of foodgrains, important commercial crops, irrigated areas and other physical programmes has been explained in the chapter on the Rate and Pattern of Growth. These estimates relate to average weather conditions in a given year. However, in order to allow for variations in the effect of weather, provisions have been made in individual state plans on a slightly higher scale so that the total production is not materially lowered even if some part of the country is affected. If these outlays are utilised with a fair degree of efficiency and if weather conditions are favourable in all the states, the total production would naturally be much higher and could be of the order shown in the table below.

(mt-million tonnas, mh-million hectares, mb-million bales )

item 1973-74 level maximum production estimates(0) (1) (2)foodgrains (mt) 104.7 132.9oil seeds (mt)-five major 8.9 12.6sugar cane (mt) 140.8 173.5cotton ( mb -170 kg) 6.3 9.0jute and mesta (mb -180 kg) 7.7 7.7high-yielding varieties (mh) 25.8 40.0fertilizers 2.8 5.0consumption (mt)minor irrigation (mh) 23.1 31.6

5.8. The expenditure on Agriculture and allied programmes during 1974-77 is likely to be about Rs. 2 I 30 crores. The outlays proposed for the last two years of the Plan period are of the order of Rs. 251 3 crores. The Sectorwise outlays are shown in Annexure 23 and the State-wise allocations are given in Annexure 24.

5.9. Performance of the important programmes, like DPAP, minor irrigation, production and distribution of high-yielding varieties of seed and distribution of fertilisers have been specifically examined and necessary provision has been made. The outlays for reclamation of alkline, saline and acidic soils and plant protection programmes have been suitably enhanced. Emphasis has also been placed on developing organic sources of manure and higher outlays provided for setting up biogas plants. Adequate provision has also been made for accelerating the minikit seed programme and strengthening of the extension services. Provision has also been made for augmenting storage capacity in the public sector.

Irrigation

5.10. The total irrigation potential likely to be created during the Fifth Plan period is placed at 13-1 million hectares ; 5-8 million under 'major and medium' and 7'3 million under'minor'. Allowing for certain adjustments the additional potential should be of an order higher than 11 million hectares.

Major and Medium Irrigation

5.11. During the first three years of the Fifth Plan the expenniture on major and medium irrigation projects is likely to be Rs. 1474 crores. For the remaining two years of the Plan, an outlay of Rs. 1 621 crores is indicated keeping in view the progress achieved on each project, new completion schedules, development of additional command and escalation in costs. Where work could be accelerated, higher, outlays have been provided for projects such as Nagariuna-sagar, Sarda Sahayak, Rajasthan Canal, Malaprabha and Kadana, Commitments to international agencies like the World Bank in respect of certain projects and obligation of States to provide matching funds in respect of inter-State projects have been kept in mind.

5.12. An Outlay of Rs. 1013 crores has been provided for new starts during the Plan period. In selecting new projects, priority was accorded to those located in drought prone areas. On the basis of the data furnished by the States and the discussions held recently, an additional potential of 5-8 million hectares is expected to be acnieved during the Fifth Plan period. Details indicating the outlays and benefits State-wise are given in Annexures 25 and 26.

5.13. Planning Commission has been laying great emphasis on modernisation of certain important irrigation schemes urgently, particularly those completed earlier to the Plan periods. Provision has been made for some schemes like Godavari Barrage, Tajewala and Okhia Barrages and Bhimgoda headworks.

Minor Irrigation

5.14. According to the outlays available to the states for the first three years, a maximum potential of nearly 3'4 million hectares is likely to be created during the first three years of the Plan. The provision made in the following two years of the Plan almost equals the provision in the first three years. As a number of the projects are nearing completion, it is expected that an additional 3-9 million hectares will be brought under irrigation during the next two years.

Soil and Water Conservation

5.1 5. The programme for treatment of area in river valley catchment of major reservoirs and other soil and water conservation programme made a late start. A considerable step-up in outlays for implementation of these programmes has been made for the remaining two years'of the Fifth Plan. In

some of the States, soil and water conservation programmes have also been taken up with institutional credit support and the targets of physical performance are likely to be achieved.

Area Development

5.16. This important programme for optimising the use of irrigation water and utilisation of the potential created from selected commands of major irrigation works also took time to make a start. Now the Command Area Development Authorities have been set up and other infrastructure facilities developed. Therefore, the provision in the Central sector would be almost 22 per cent higher for the remaining two years as compared to the outlays for the first tnree years. The provisions in the respective states adequately match the provision made in the Central sector.

Investment in Agricultural Financial Institutions

5.17. More and more institutional finance is being extended to the development programme for rural areas which leads to higher physical achievements with less public sector outlays. Accordingly, for providing support to Agricultural Refinance and Development Corporation, adequate budgetary provision has * been made in the Central Sector, which is almost 55 per cent higher than the outlay in the draft Fifth Plan. In the State, sector, provisions have also been made for investment in agricultural financial institutions which are higher by about 22 per cent. The provision made for the remaining two years in some of the States especially in the eastern region for strengthening of cooperative structure and development of loaning programmes by the Land Development Banks is almost 62% higher than the outlays available for the first three years. The total investment outlay is being raised to Rs. 129 crores. It is to be noted that the major portion of it will go to minor irrigation sector. This should generate sizeable investment and strengthen the operational capability of the Central/State Ground Water Boards.

Forestry

5.18. Taking note of the fact that forestry development has assumed a significant dimension as a source of timber and fuel and for the maintenance of the natural ecological system, special programmes for social forestry and economic plantations have been given high priority. Accordingly, for the remaining two years of the plan, the provision made is almost double the outlays provided for in the first three years of the Plan. Adequate provision has also been made for 'project Tiger' and for the development of National Parks and for strengthening the reserch programme in the forestry sector.

Animal Husbandry and Dairy Farming

5.19. There had been some delay in giving a start to the special livestock development programmes through small and marginal farmers and agricultural labourers. By and large the targets under production oriented projects such as intensive cattle development projects, intensive poultry production-cum-marketing centres, sheep and wool extension centres and fluid milk plants and milk product factories are expected to be achieved in full. There are 85 subsidised projects for cross-breed calf rearing, 57 poultry production projects, 45 piggery production projects and 38 sheep production projects through small and marginal farmers and agricultural labourers in 148 districts. Intergrated milk production-cum-marketing projects would be implemented in the States of Meghalaya, Assam, Sikkim, Himachal Pradesh, J and K, Orissa and Kerala as a second phase of the 'Operation Flood' project. Emphasis will continue to be laid on cross-breeding in cattle through establishment of exotic cattle breeding farms and intensive artificial insemination measures. Particular emphasis will be laid on scientific poultry breeding programme. Programmes for the control of rinderpest and foot and mouth disease would be continued.

Fisheries

5.20. There has been some delay in the start of a few projects but the targets for mechanisation of boats, production of fish seed and development of fishing harbours are expected to be achieved in full A special

Trawler Development Fund will be created in order to helo, in particular, smaller entrepreneurs and cooperatives to purchase and operate trawlers for marine fishries. Fish Farmers Development Agencies would be started in the states for augmenting inland fish production and exploitation of water bodies in rural areas.

5.21. The UNDP assisted palagic fishery project would be continued for exploration and exploitation of fishery resources and this scheme would be extended to cover both the West and South East coasts. A survey of the North West coast would be conducted. An intergrated fishery development project around two fishing harbours at Veraval and Mangrol in Gujarat would be taken up with world Bank assistance. A research vessel will be provided to the Central Marine Fishries Research Institute.

Research and Education

5.22. In spite of the fact that the trend of expenditure during the first three years has been low on account of ban on recruitment of staff, the research priorities in different fields of crop production and animal husbandry have been maintained to yield new innovations in developing farm level technology. The coordinated research programmes have been suitably strengthened with the active participation of the Agricultural Universities in different States. A new research complex has been established in the north-eastern region. New institutes have also been established for strengthening cotton research and for developing research programmes on farm tools, equipment and machinery. Provisions have been made for projects with collaboration of agencies of United Nations. The Educational programmes have been further strengthened by setting up new Agricultural Universities which now number 21 covering 1 6 States.

Cooperation

5.23. Taking note of the desirability of strengthening the cooperative structure, provision has been sufficiently enhanced for Agricultural Stabilisation Fund, rehabilitation of weak Central Cooperative Banks and assistance to cooperative credit institutions in developing States. Thus the revised outlay for 1977-79 is almost 60 per cent higher than the outlays for the first three years of the Fifth Plan. Similarly, adequate provisions have been made in the State sector to provide for strengthening of cooperative structure by organising Farmers Service Societies-and LAMPS in the tribal areas. Provisions have also been made for increasing the loaning programmes for m'nor irrigation, land development and supply of inputs.

Flood Control

5.24. The anticipated expenditure in the first three, years is likely to be of the order of Rs. 177-69 crores. For the next two years (1 977-79). an outlay of Rs. 167.59 crores has been indicated (Annexure 27).

5.25. Some of the .important schemes are the Patna City Protecton Works, flood protection works in North-Bihar and U.P., flood control and drainage works in Jammu and Kashmir, drainage works in Punjab, improvement of lower Damodar system in West Bengal and flood protection works in North Bengal. The provision also covers the flood control works in the Brahmputra valley for which provision has been rr.ade in the Central sector.

5.26. The Centre is also assisting in sharing the cost of flood control component of the Rengali dam in Orissa and anti-sea erosion works in Kerala. It also meets the cost of the flood forecasting system that has been set up in the Department of Irrigation.

3. Power

5.27. In the Fourth Plan an additional 4280 MW of generating capacity was added, taking the installed capacity to 18456 MW. In the first two years of the Fifth Plan 3524 MW were added, and with the requisite

efforts on the part of the project authorities, it might be possible to add 2387 MW capacity during 1976-77. In the first three years, the outlay on generation projects would be about Rs. 2145 crores. It is now expected that a total of about 12500 MW of generating capacity would be added during the Fifth Plan. Out of the projects which are currently under implementation, generating capacity of about 6000 MW would be still under construction at the end of the Fifth Plan. Experience indicates that management and techniques of construction and monitoring, would need to be considerably improved.

5.28. In finalising the Fifth Plan for Power, emphasis has been placed on the completion of on-going schemes as expeditiously as possible. In recommending outlays, the latest cost of each generation project, status of progress of major items of works, delivery schedules for the equipment and any constraints likely to be faced in implementation were all taken into account. Particular consideration has also been given to infra and inter-State transmission lines, setting up and strengthening of regional load despatch centres, and investments on distribution. Transmission and distribution losses are expected to be reduced. The needs of schemes covered by external assistance have baen also kept in view. Rural electrification will also be significantly higher than in the first three years of the Fifth Plan. The States will also be attracting institutional finance for rural electrification. The programme of energising pump sets will be accelerated. About 13 lakh pump sets are expected to be energised during the Fifth Plan period, as against about 6.3 lakh pump sets in the first three years. About 81,000 additional villages are also expected to be electrified in the Fifth Plan.

5.29. In planning advance action for the Sixth Plan, the power requirements till the end of the Sixth Plan are being kept in view. It has been assumed that the healthy trends In improved utilisation of capacity which have been observed in the Fifth Plan period and the progress in reduction of distribution losses, will continue. Special attention will be paid towards ensuring that regional grids are strengthened, that there is a balanced development of peaking and base load stations in each region, and that optimal use is made of these stations both by an integrated operation within the region and where necessary by cooperation between regions. With these considerations in mind, provision has been made for a number of new starts in the thermal and hydel projects including a centrally owned super thermal station. The views of the States were taken note of particularly in regard to aspects like readiness of projects, construction periods and escalation in cost. Many States expressed their willingness to raise additional resources to meet the requirements of new power projects.

5.30. The power position in northern and eastern regions will continue to be comfortable. But western and southern regions are expected to face both peaking and energy deficits.

5.31. Increased outlays are provided for training facilities for the operation and maintenance of power system, testing facilities for electrical equipment and R and D in such priority areas as geothermal and tidal power.

5.32. The revised outlays under the various categories are summarised below:-

Fifth Plan Power-Financial Outlay

(Rs crores)

item states union terntone centre total dratititth plan(0) (1) (2) (3) (4) (5)1. generation 3722.71 6.52 665.24 4394.47 3323.812. transmission and distribution

1897.73 78.78 104.74 2081.25 1634.27

3. rural electrification(a) M.N.P. and state plan 360.54 10.74 371.28 698.24

(b) rural electrification corporation

314.02 314.02 400.00

4. survey and investigations

74.92 2.72 55.24 132.88 133.68

5. Total 6369.92 98.76 825.22 7293.90 6190.00

5.33. The generation schemes which have been or are expected to be commissioned '•n Fifth Plan period are shown in Annexure 28. The regionwise break up of installed capacity is expected to be as in Annexure 29.

4. Industry and Minerals

5.34. The stresses and strains in the economy kept the industrial growth low :2.5% during 1974-75 and 5.7% during 1975-76. Even so, significant increase in production have been achieved in some of the basic industries like steel, coal, cement, non-ferrous metals and power generation. Decline was particularly noticed in industries like passenger cars, consumer durables and cotton textiles.

5.35. Some of the steps taken to correct this situation can be mentioned. 21 industries including cotton spinning, basic drugs and industrial machinery have been delicensed. In respect of 29 selected i ndustries, the existing units including foreign and MRTP companies have been permitted to utilise their installed capacity without limit. In order to promote exports of engineering goods, 15 engineering industries have been allowed the facility of automatic growth of capacity,at 5% .per annum or up to a ceiling of 25% in a Plan period in physical terms. Various facilities have been extended to non-resident Indians for the establishment of industrial undertakings and for investing their earnings in selected industries. The resources of I DBI and other term lending institutions are also proposed to be augmented. Conditions are now favourable for maintaining the tempo of growth in industrial production and investment, achieved during the last quarter of 1975-76.

5.36. In making revised allocations, speedy completion of projects and appropriate action for starting new projects with long gestation periods have been kept in mind. As against an outlay of Rs. 13,528 crores envisaged in the draft Fifth Plan, the revised figure is placed at Rs. 1 6,660 crores : Rs. 9660 crores in the Central and States Public Sectors and Rs. 7000 crores in private and cooperative sectors.

Central Public Sector

5.37. A detailed list of projects and programmes included in the Central sector of the plan is given in Annexure 30. The broad break up of certain important groups of industries in the public sector is as follows :

Outlays for important groups of industries

(Rs. crores)

Industry Outlay Industry Outlay1. Steel 1675 7. Non-ferrous metals 4682. Fertilisers 1533 8. Iron ore (including

Kudremukh Project)513

3. Coal (including lignite) 1147 9. Paper and newsprint 2034. Oil exploration, 1575 10. Cement 102

refining and distribution 11. Textiles 1045. Petrochemicals 349 12. Ship Building 147

6. Machinery and engineering industries

365

5.38. The targets of production visualised in the Plan for selected industries is given in Annexure 31. The average rate of industrial growth during the Fifth Plan is reckoned to be around 7% per annum. In view of the relatively lower rate of growth in the first 2 years of the plan, the growth rate in industrial production in the lernaining 3 years of the Plan will have to be maintained around 9 to 10%

Steel

5.39. The domestic demand for finished mild steel is estimated at about 7.75 MT by 1978-79, while the production is expected to be 8.8 MT including a production of 1.06 MT from the mini steel plants and re-roilers. Though a few special categories of steel will still need to be imported, on the whale the country has now emerged as a net exporter of steel.

5.40. The 1.7 MT stage of Bokaro is expected to be completed by the end of 1976. This plant, except the cold-rolling mill, is expected to expand to 4.0 MT by June 1979. The work on the expansion of Bhilai steel plant to 4.0 MT is expected to be completed by December 1981. Plans have also been drawn up for rehabilitation and modernisation of the IISCO plant.

5.41. Considering the longer gestation period in the steel industry, various alternatives for expansion and development are under consideration.

Non-Ferrous Metals

5.42. The Korba plant is expected to achieve its full capacity of 100,000 tonnes of aluminium along with associated fabricating facilities, before the end of the Fifth Plan. Along with the capacity existing in the private sector, this will contribute to the total capacity of 325,000 tonnes and will be adequate to meet the domestic requirements.

5.43. With the commissioning of the Khetri copper complex, the current smelting capacity is 57,000 tonnes per annum. Provision has been made for the development of mining projects at Malanjkhand and Rakha and expansion of copper mines in the Bihar belt. The Plan envisages a production target of 37,000 tonnes of copper from domestic ore by 1978-79.

5.44. The capacity for zinc production is expected to increase to 95,000 tonnes by 1978-79 with the completion of the expansion of Debari smelter (45,000 tonnes) and installation of a new smelter at Vizag (30,000 tonnes).

5.45. A provision of Rs. 468 crores has been made in the Plan towards the various schemes included for the development of non-ferrous metals and associated facilities.

Engineering Industries

5.46. The bulk of the investments is for completing the programme for the production of electric generation equipment and supporting facilities in Bharat Heavy Electricals Limited and for diversification of the production programme of Hindustan Machine Tools for the manufacture of lamp machinery, printing machinery, tractors and watches. Provision has also been made for balancing facilities at Heavy Engineering Corporation and for rehabilitation and diversification programmes of engineering undertakings taken over by the Government.

5.47. A large step up in scooter production is envisaged. The concept of a mother unit supplying components for assembly to a number of subsidiary units has been introduced in the public sector.

5.48. Provision has been made for the Hindustan Shipyard to achieve a production of three ships per annum of 21,600 DWT size. Cochin shipyard will have a capacity of two ships per annum of 75,000 DWT size by 1 977-78. The further expansion to four ships per annum will also be started before the end of the Plan. The establishment of one or more new shipyards is currently under consideration.

5.49. A detailed plan for the development of electronic industry on a scientific basis has been drawn up. Provision has been made for testing facilities and R & D support for the growth of the electronic industry.

Fertilisers

5.50. The installed capacity for nitrogenous fertilisers is expected to reach 4.7 million tonnes by 1 978-79. Since a part of this capacity will be realised only in the last year of the Plan, the production target is placed at 2.9 million tonnes.

5.51. The demand for phosphatic fertilisers has not increased to the extent envisaged. Measures have been mitiated to stimulate consumotion of phosphatic fertilisers. Further expansion of phosphatic fertiliser capacity is being planned.

5.52. Apart from the new plants envisaged in the public sector, it is expected that additional capacity will be promoted in the private sector.

5.53. A total provision of Rs. 1 533 crores has been made in the Fifth Plan for fertilser projects as compared to Rs. 1093.28 crores in the draft Plan. This includes a lumpsum provision for new fertiliser projects and also fertiliser projects in the cooperative sector.

Oil and Natural Gas

5.54. Programme for the exploration and exploitation is being stepped up to intensify activities in the most promising oil bearing areas where the payback is likely to be quicker. Resources are, therefore, mainly being canalised to the development and production of oil from off-shore and selected on-shore areas.

5.55. A time-bound programme has been drawn to develop production of oil from Bombay High to a rated capacity of 10 million tonnes per annum by 1980-81. Studies for optimal exploitation of resources, transportation, processing and utilisation of the oil and associated natural gas are being currently carried out.

5.56. The draft Plan envisaged a step up of crude oil production from 7.2 million tonnes in 1973-74 to 12.0 million tonnes in 1978-79. The production target for crude oil is now placed at 14.18 million tonnes in 1978-79.

5.57. Taking into account the enlarged programme, the outlays for ONGC during the Fifth Plan, have now been revised to Rs. 1056 crores as compared to Rs. 420 crores in the Draft Fifth Plan.

Oil Refining

5.58. The refinery programmes included in the Plan cover the completion of the Kaldia refinery, the expansion of Koyali and the establishment of refineries at Mathura and Bongaigaon. All these projects are expected to be completed in the Fifth Plan excepting Mathura refinery which is scheduled to be commissioned by 1980. By the end of the Fifth Plan, refining capacity will be stepped upto31.5 million tonnes. Provision has been made in the Planter these schemes.

Petrochemicals

5.59. The first major petrochemicals complex at Baroda will be completed during the Fifth Plan period. The Aromatic Project of the complex has already been commissioned. The defines and the downstream units are expected to be commissioned between August, 1977 and April, 1978. The polyester filament yarn project of Petrofils Cooperative Ltd. is also expected to be commissioned in phases between March and July, 1977. A provision of Rs. 349 crores has been made for the above mentioned schemes. A Refinery-cum-Petrochemical unit at Bongaigaon has been included in the Plan.

Coal

5.60 In consonance with the broad policy frame for the Energy sector drawn up by the Fuel Policy Committee, the Draft Fifth Plan envisaged a production target of 1 35 million tonnes by 1978-79. �

5.61. A comprehensive programme of advance action involving bulk purchase of standardised plant and equipment and various technical, managerial and administrative improvement together with a favourable industrial climate has resulted in higher production of coal.

5.62. The demand for coal, however, has not kept pace with production. After keeping in view the outlook for coal consuming industries and a review of the current energy situation, the likely demand of coal at the end of the Fifth Plan period has now been projected at 124 million tonnes. Provision has been kept for an export of 2.5 million tonnes of coal in 1978-79 as compared with 1.5 million tonnes envisaged earlier. Consistent witn the revised outlook in demand, the production programmes are being rephased, in a way which would not hamper the future growth.

5.63. Even with this target, the outlays for the Plan are likely to be of the order of Rs. 1025 crores as against the earlier provision of Rs. 747.60 crores. This includes the requirements for the setting up of 1 0 million tonnes of additional washery Capacity, of which, 4 million tonnes will be operational by 1 978-79. Two units of low temperature carbonisation plants are also contemplated. Adequate provision has been made for better housing facilities and other welfare activities etc.

Lignite

5.64. The draft Fifth Plan made a provision of Rs. 39.80 crores for the Neyveli Lignite Project which was expected to reach a production of 6.0 million tonnes in 1978-79.

5.65. On the basis of the review now carried out, this provision has been increased to Rs. 122.25 crores, mainly on account of escalated cost of the specialised mining equipment which is to be imported. In view of the slippages in the implementation of the programme, a production of 4.5 million tonnes of lignite is now expected by the end of the Fifth Plan period, the production of 6 million tonnes being attainable by 1 980-81.

Iron Ore

5.66. The production target envisaged for iron ore in the Draft Plan was 58 million tonnes. Due to slight fill in the domestic demand, the production now envisaged is 56 million tonnes,

5.67. As currently reckoned Donimalai, Bailadila-5 and Kiriburu expansion projects will be commissioned in 1976-77. The development of Meghahatu-buru project for meeting the requirements of Bokaro steel plant at the 4 million tonnes stage is expected to be taken up shortly. Provision has also been made for establishing pelletisation capacity. A notable feature in the field of iron ore development has been the decision to develop the Kudremukh magnetite deposit for a production of 7.5 million tonnes of magnetite concentrates at a cost of around Rs. 567 crores.

5.68. Based on current estimates, a provision of Rs. 107.57 crores, excluding the investments on Kudermukh Project, has been made in the Plan.

Consumer Industries

Sugar

5.69. To achieve speedy implementation of licences issued and to make new sugar factories and expansion schemes economically viable, incentives were announced in September, 1975. The capacity is expected to increase from 4.3 million tonnes in 1 973-74 to 5.4 million tonnes in 1 978-79.

Cotton Textiles

5.70. From a production of 7900 million metres of cloth in 1973-74, the production is expected to go up to 9500 million metres in 1978-79. The share of the mill sector is envisaged at 4800 million metres and the decentralised sector would contribute the balance of 4700 million metres.

5.71. The spinning capacity .is being expanded so as to ensure adequate availability of yarn to the decentralised sector.

5.72. To accelerate the modernisation of the textile industry, a scheme to extend long term finance at concessional rate is being drawn up. A provision of Rs. 104 crores has been made for the rehabilitation and modernisation of the mills of the National Textile Corporation.

Cement

5.73. The capacity in the cement industry is expected to go up to 23.5 million tonnes by 1978-79 from 19.7 million tonnes in 1973-74.

5.74. The share of the public sector (Central and States) in the cement industry is expected to increase from 2.30 million tonnes in 1973-74 to 3.88 million tonnes in 1978-79.

Drugs and Pharmaceuticals

5.75. The drug industry which was mainly confined to formulation activities and the manufacture of bulk drugs from penultimate intermediates has in a progressive manner entered into the field of manufacture of bulk drugs.

5.76. Public sector has been given a prominent role in the overall development of drug industry. A significant step up in production in the area of antibiotics, synthetic drugs and formulations in public sector is envisaged.

Vegetable Oils and Vanaspati

5.77. The production of vanaspati is expected to increase from 449,000 tonnes in 1973-74 to 610,000 tonnes in 1978-79.

Paper and Newsprint

5.78. The production of paper and paper board is expected to be stepped up to 1.05 million tonnes by 1978-79 from 0.77 million tonnes in 1973-74 Provision has been made for initiating construction of two new projects in the Central sector.

5.79. Production of newsprint is envisaged to be stepped up to 80,000 tonnes by 1978-79. The additional production will be contributed primarily by the expanded capacity of NEPA and the Kerala Newsprint project in the public sector.

5.80. A provision of Rs. 203 crores has been made in the Central Sector of the Plan for the development of paper and newsprint industry.

Industrial and mineral programme relating to atomic energy

5.81. The major programmes in this field are the completion of heavy water plants, the schemes under the nuclear fuel complex and the expansion of public sector undertakings under the Department of Atomic Energy. A provision of Rs. 184.18 crores has been made for these programmes.

5. Village and Small Industries Small Scale Industries

5.82. The number, volume and range of production of small scale industries have continued to grow. Schemes of extension services and increase in institutional finance have materially assisted in this increase. Regional testing centres have been established. A few branches of Small Industries Service Institutes have also been opened.

5.83. For the next two years, adequate provisions have been made both for the continuing schemes and for schemes to be formulated for margin or seed money to facilitate institutional finance and for supply of machines on hire-purchase terms.

Industrial Estates

5.84. Of 455 estates functioning by March, 1974, 347 were located in urban and semi-urban areas and the remaining 108 in rural areas. In these estates, about 1 0,1 40 units were functioning providing employment to 1.76 lakh persons.

5.85. Adequate provision has been made for the continuing schemes as well as some new schemes.

Khadi and Village Industries

5.86 Ihe employment in Khadi ragistered an increase from 9.78 lakhs in 1974-75 to 10.0 lakh persons in 1975-76. The increase in village industries was from 9.82 lakhs to 11.28 lakh persons.

5.87. A study has recently been completed by the Administrative Staff College, Hyderabad, regarding the viability of some village industries. Meanwhile, provisions have been made for expansion of the existing programmes.

Handloom and Powerloom Industries

5.88. Certain special schemes have been initiated for revitalisation and development of the handloom industry as a part of the 20-point Economic Programme. These schemes include intensive development projects (each covering about 10,000 handlooms) and export-oriented production projects (each covering about 1,000 handlooms).

5.89. Adequate provisions for continuing schemes as well as for the States to meet a part of the cost of intensive development projects have been made. For the powerloom industry, provisions have been made for processing facilities and setting up technical service centres. The value of exports of handloom fabrics and manufactures is expected to go up to Rs. 1 40 crores from the current level of about Rs. 1 00 crores.

Sericulture

5.90. During the last two years, schemes have been taken up for production of industrial bivoltine mulberry silk in Karnataka, West Bengal, Tamil Nadu and Andhra Pradesh.

5.91. These schemes will be expanded during the next two years. The production of raw silk is expected to increase from the present level of about 3.2 m. Kgs to about 5.0 m. Kgs. by 1978-79 and the exports from Rs. 17.5 crores to Rs. 21.0 crores.

Coir Industry

5.92. Recently, a high-powered Study Team has been set up to review the proQress and suggest measures for the development of this industry. Meanwhile, adequate provisions have been made for the continuing schemes. Over the next two years, the value of exports is expected to increase from the present level of about Rs. 19 crores to Rs. 22 crores.

Handicrafts

5.93. Recently, a massive scheme for training 30,000 carpet weavers has been initiated which will help to promote larger exports of woollen carpets. Steps have been taken to develop a few selected handicrafts having a high potential for development.

5.94. The value of exports of handicrafts is expected to go upto Rs. 240 crores, as against the present level of about Rs. 190 crores.General

5.95. The levels of production and exports achieved by some industries are shown in Annexure 32.

5.96. The provisions made for the next two years in the Central and the State sectors for different small industries are shown in Annexure 33.

6. Transport and Communications

5.97. A sectorwise break-up of the provisions in the Central sector for Transport and Communications is indicated in Annexure 34.

Railways

5.98. The expenditure for the first three years of the Plan is likely to be about Rs. 1149 crores; while an outlay of Rs. 1053 crores is proposed for the next two years.

5.99. By 1978-79, the railways would be equipped to carry an estimated originating freight traffic of 250 to 260 million tonnes, of which the largest single commodity would be 98 million tonnes of coal. While finalising provision for replacement or acquisition of locomotives and wagons, emphasis has been laid on better utilization of existing track and rolling stock capacity by maximising movement in block rakes and reducing turn-round time.

5.100. In regard to non-suburban passanger traffic,outlays have been provided after taking into consideration past trends and possible growth in the next two years. Provision for suburban traffic takes into consideration the optimisation programmes of the Railways.

5.101. Full provisions have been made for completion of on-going traffic and project oriented lines. Some provision has also been made for new lines of promotional character to the extent permitted by the available resources.

5.102. Despite constraints on resources, the electrification projects of Virar-^abarmati, Panskura-Haldia and Tundla-Delhi sections have been completed. By the end of the Fifth Plan, it is expected that the Madras-Trivellore section will be fully electrified while electrification of Waltair-Kirandul and Madras-Vijayawada sections would have reached an advanced stage.

5.103. Adequate provision has been made for meeting the Railways' share of the investment in Road Transport Corporations. An outlay of Rs. 50 crores has also been provided for Metropolitan Rail Transport scheme.

5.104. Outlays on the different items of the Railway Development programmes are given in Annexure 35.

Roads

5.105. Main emphasis has been on completion of spill over works of the Fourth Plan, which included a number of missing bridges and road links. It is expected that during the last two years of the Plan, work will be largely completed on such of those works which were in progress at the commencement of the Fifth Plan. Besides, provision has also been made for certain new schemes of essential character, particularly those relating to safety of the traffic.

5.106. The revised outlays for the Central programmes are given below. The figures in the brackets refer to spill over schemes.

(Rs. crores)

programme estimated expenditure (1974-77)

outlays (1977-79) revised plan outlay

(0) (1) (2) (3)1. national highways 176.56 {159.79} 151.06 ('93.06) 327.62 ('252.85)2. strategic roads 14.00 (12.00) 24.00 ('21.00) 38.00 (33.00}3. roads of inter-siate and

economic importance9.24 (9.24) 20.76 (14.76) 30.00 (24.00}

4. highway research and developmer

0.20 1.80 2.00

5. roads in sensitive border areas

1.00 9.00 10.00

6. special road/bridge works of national significance mainly for second Hooghly bridge at Calcutta

9.02 15.98 25.00

7. tools and plants 7.82 5.00 12.828. Total 217.84 (181.03) 227.60 (1128.82) 445.44 (309.85)

5.107. In the State Plans also emphasis has been laid on completion of the spill over works so that investments already made fructify early. Provision has also been made for rural roads under the Minimum Needs Programme.

5.108. The likely expenditure during the first three years, 1974-77 is reckoned at about Rs. 479.32 crores and the outlays for the next two years are kept at Rs. 423.04 crores.

Road Transport

5.109. The main scheme under the Central sector road transport relates to the Delhi Transport Corporation. At the beginning of the Fifth Plan, the D.T.C. had a total fleet of 1495 buses. During the first three years, the Corporation is likely to acquire 1137 buses, including 682 buses for augmentation and 455 buses for replacement. Provision has been made for acquisition of additional 389 buses based on consideration of traffic growth and efficient fleet utilisation and for construction of additional depots and terminals. A total outlay of Rs. 29.77 crores is envisaged against the Draft Fifth Plan provision of Rs. 23.00 crores.

5.110. In the State sector the estimated expenditure on Road transport during 1974-77 is likely to be Rs. 197.08 crores and an outlay of Rs. 205.87 crores is provided for the next two years.

Major Ports

5.111. The traffic handled at Major Ports is expected to increase from 65.84 million tonnes in 1974-75 to about 77 million tonnes in 1978-79. The main increase is expected to be in iron ore and general cargo,

5.112. With the completion of the major spillover projects at Haldia, Madras, Visakhapatnam, Marmugao and Mangalore during 1976-77 the capacity for handling traffic in bulk commodities like iron ore, coal and fertilisers will be considerably augmented. Provision has also been made for work in connection with replacement of oil pipeline at Bombay, Salaya off-shore terminal, and Kudremukh Iron ore export at Mangalore.

5.11 3. The draft Fifth Plan, provided an outlay of Rs. 308 crores for major ports including about Rs. 200 crores for spill-over schemes. The total outlay now envisaged is Rs. 521.46 crores including Rs. 363.55 crores for spill-over schemes.

Minor Ports

5.114. In the revised Fifth Plan, an outlay of Rs. 49,67 crores has been provided for minor ports including Rs. 27.29 crores in the Plans of States and Union Territories. The provision for Central schemes is on account of Minor Ports Survey and Dredging Organisation and development of port facilities in the Andaman and Nicobar Islands and Lakshadweep.

Shipping

5.115. In view of a number of major and far-reaching developments such as decline in the import of crude oil, opening of the Suez Canal, non-materialisation of the projected coastal movement of coal, and escalation in the price of ships, the target for shipping tonnage has been reduced from 8.6 million GRT to 6.5 million GRT. Details of the operative tonnage, tonnage on order and tonnage to be acquired are shown in Annexure 36.

5.116. Indian ships, whether new or old are acquired partly by the Shipping Companies out of their own resources and partly through loans granted by the Shipping Development Fund Committee (SDFC) at subsidised rates of interest. A provision of Rs. 410 crores for the Plan period has been made as against the original estimates of Rs. 243 crores.

5.117. Suitable provision has also been made for expansion of training facilities and programmes for the walfare of seamen and for loan assistance to the sailing vessels industry.

Inland Water Transport

5.118. Outlay of Rs. 14.73 crores for next two years includes development of Rajabagan Dockyard, operations of the Central Inland water Transport Corporation and operation of river services on the Ganga. In the Centrally Sponsored programme, the provision of Rs. 5.83 crores is mainly for dredging of Cum-berjua Canal in Goa, ferry services on Hooghly, improvement of Champakara-Neendakara Canal in Kerala and improvement of Buckingham Canal in Andhra Pradesh and Tamil Nadu.

5.119. In addition, a provision of Rs. 7.75 crores has been made for the development of Inland Water Transport in the States and Union Territories.

Light Houses

5.120. As against the draft Fifth Plan provision of Rs. 12 crores for lighthouses and lightships, the revised provision is Rs. 1 3.66 crores. Of this, the provision for 1977-79 is Rs. 6.13 crores. The revised outlay includes Rs. 6.53 crores for Salaya Decca Chain and Floating Aids for approach channel to the Salaya Off-shore Terminal.

Air-India

5.121. One Boeing 747 aircraft joined the Air India fleet of 5 Boeing 737 and 9 Boeing 707 during the Plan period. The outlay of Rs. 38.65 crores during "1977-79 has been made to cover this liability as well as other supporting facilities including interim arrangements towards establishing real time computer system.

Indian Airlines

5.122. Indian Airlines have already acquired during this Plan period 6B-737 aircraft and placed orders for 3 Air Buses (equivalent to 9B-737 aircraft) which are expected to join Indian Airlines fleet shortly. The old Turboprop aircraft are also to be replaced. A total provision of Rs. 99.45 crores has been made to cover the payment liability of the aircraft acquired or to be acquired and for interim arrangements towards use of real time computer facilities.

International Airports Authority of India

5.123. A sum of Rs. 27.67 crores has been provided for the programme of IAAI in the Fifth Plan. This includes a provision of Rs. 11 crores for a new International and Cargo Terminal Complex at Bombay.

Civil Aviation Department

5.124. The provision of Rs. 65.15 crores inter alia includes outlays on aeronautical communication services and works at aerodromes. Under aeronautical communication services, provision has been made for augmentation of calibration facilities and for improving the aeronautical fixed and mobile telecommunication net work. These would further improve the safety of aircraft operation. As regards works at aerodromes, the emphasis in the Draft Fifth Plan on the development of existing aerodromes rather than the taking up of new works has been continued.

Meteorology

5.125. The Plan provision of Rs. 39.58 crores includes the completion of 2.36 M Telescope by the Indian Institute of Astro-physics. This also includes a provision of Rs. 20 crores for Monsoon 1977 experiment, Monex 1979 and INSAT programme.

Tourism

5.126. A provision of Rs. 23.62 crores has been made for the programme of Department of Tourism and that of Rs.17.12 crores for the India Tourism Development Corporation (ITDC). The programmes under the Department of Tourism include loans to hotel industry in the private sector, integrated development of tourist resorts at Kovalam, Gulmarg, Goa and Kulii—Manali and construction of a number of youth hostels,tourists bungalows and forest lodges. The programmes under ITDC include expansion of hotels and construction of travellers' lodges, motels and cottages.

5.127. In the State Sector also a provision of Rs. 33.21 crores has been mt.de for the development of tourism.

Postal Services

5.128. The Plan provision of Rs. 24.38 crores apart from covering the expenditure on opening or upgradation of 2520 post offices during the first three years of the Fifth Plan, is expected to enable opening or upgrading of additional 3800 post offices in the next two years.

Telecommunications

5.129. The revised Plan outlay of Rs. 1129.45 crores would enable creation of additional exchange capacity of 8.42 lakh lines.

5.130. Adequate funds have been set apart for expanding the telegraph system and opening of about 45 Telex exchanges with 10,000 lines capacity.

Overseas Communication Services

5.131. The revised provision of Rs. 35.87 crores includes funds for INTEL-SAT Dehradun Earth Station, SPC Telex Exchange at Bombay and Indo-USSR Tropo Link. Token provisions have also been made for a wide-band submarine Link between India and Malayasian Peninsula as well as the new schemes relating to Indo-Afghan Tropo-scatter Link, Andaman Earth Station and Third Earth Station at Calcutta.

I.T.I, and Hindustan Teleprinters Limited

5.132. Adequate provision has been made for the continuing and the expansion programmes of these industries.

5.133. The statement below gives the programme-wise outlays:

Fifth Plan Outlay : Communications

programme outlay (Rs. crores)

(0) (1)

1. P and 7" Department 1153.83

(i) postal services 24.38

(ii) telecommunications 1129.45

2. other communications 112.78

(i) indian telephone industries 52.85

(ii) overseas communications service 35.87

(iii) hindustan teleprinters limited 3.00

(iv) monitoring organisation (for radio frequency management) 1.06

(v) INSAT 20.00

3 Total 1266.61

Sound Broadcasting

5.134. The revised provision of Rs. 37.63 crores lays emphasis on completion of continuing schemes costing Rs. 32.52 crores. The balance provision is for initiating action for new Transmitter schemes, improvement of studio facilities, software requirements and construction of staff quarters.

Television

5.135. The revised Fifth Plan outlay for TV is Rs. 50.98 crores, of which Rs. 33.41 crores is for continuing schemes and Rs. 17.57 crores for new schemes. The new schemes include setting up of 2 transmitters of 10 KW each at Hyderabad and Jaipur and 4 low-power transmitters of 400 watts at Gul-barga, Sambalpur, Muzaffarpur and Raipur. These transmitters would serve about 40 per cent of the villages covered under the Satellite Instructional Television Experiment (SITE) programme after the termination of Experiment. For Community Viewing, provision has been made for about 3000 conventional TV sets and modificatipn of about 2400 special sets deployed under the SITE programme. The Plan also provides for software schemes to improve the quality of programme.

7. Education

5.136. Plan outlays for education during the first three years of the plan have been somewhat modest because of the economic situation but the growth in the total governmental expenditure on education, both plan and non-plan, must be considered substantial. The total expenditure is estimated to rise from Rs. 1450 crores in 1974-75 to about Rs. 2287 crores in 1 976-77.

5.137. Elementary Education : Very high priority has been given to this programme. Adequate provision has been made for additional enrolment in terms of teaching personnel and construction of class-rooms, especially in backward areas.

5.138. The table below indicates the additional enrolments, which are likely to be achieved by the end of the Fifth Plan :

Growth of Enrolment (figures in lakhs)

CLASSES I-V CLASSES VI-VIIIboys girls total boys girls total

(0) (1) (2) (3) (4) (5) (6)1. 1973-74 (position) * 396

(100)245 (66)

641(84) 107 (48) 46 (22) 153 (36)

2. 1974-77 (additional achievemenit)

37 33 70 17 12 29

3. 1977-79 (proposed additional target)

30 30 60 16 13 29

4. 1974-79 (additional achievement line 2+3)

67 63 130 33 25 58

5. 1978-79 (likely position) 463 (111)

308 (79)

771(96) 140 (59) 71 (32) 211 (46)

5.139. In addition to the expansion of educational facilities, provision has been made for curricular reorientation, work experience and strengthening of educational institutions for teachers.

5.140. Secondary Education : The existing trend in the increase of enrolment has been kept in view. Against the additional enrolment of 1 5 lakhs likely to be achieved in the first three years, an enrolment target of another 15 lakh in classes IX-XI/XII has been proposed for 1977-79. The percentage of children of the age-group 1.4-1 71 8, enrolled in classes IX-XI/XII will increase from 20 in 1973-74 to 25 in 1978-79. While making provisions, note has been taken of the requirements on account of the introduction of the new pattern of education.

5.141. After detailed preparatory work, vocationalisation at the secondary stage will be initiated in selected areas during the next two years so that well-conceived and fully thought-out programmes are implemented.

5.142. University Education : The main emphasis in university education is on consolidation and improvement. Provision is, however, being made to provide additional educational facilities to weaker sections of society and in the backward areas. Facilities through evening colleges, correspondence courses and private study will be expanded. Post-graduate education and research will continue to be strengthened through the development of centres of advanced study, science service centres, common computer facilities and regional instrumentation workshops. Programmes of faculty development, like summer institutes, seminars and orientation courses will be stepped up. These figures are taken from Draft Fifth Plan. The Third Education Survey, however, indicated that the enrolments in classes l-V-and-VI-VIII in 1973-74 were 611 lakhs (80%) and 141 lakhs (33%) respectively. Assuming the Survey enrolments as the base figures, the loial enrolment in 1978-79 in Ihese iwo groups would be 741 lakhs (92%) and 199 lakhs (43 %).Figures in parenthesis indicate the proportion of children of respective age groups enrolled in Classes I-V and VI-VIII.

5.143 Non-Formal Education : With the strengthening of existing programmes of non-formal education, about 16 lakh participants are expected to be covered under these programmes. The existing programmes are intended to be reviewed.

5.144. Scholarships: 12,000 awards are being given every year from 1974-75 onwards, from the non-plan budget. The number of annual awards under the National Scholarship Scheme was 3,000 in each of the first two years of the Plan and 5000 in 1 976-77. Provision has been made to increase the number to 7,000 in 1 977-78 and to 10,000 in 1 978-79. Provision has also been made for continuing 20,000 yearly national loan scholarship awards during the Fifth Plan period. The number of national scholarships for talented children from rural areas, which was 1 0,000 each year during 1 974-77, will be increased to 1 5,000 per year during 1 977-79; thus increasing the number of scholarships per community development block from 2 to 3. Other programmes of scholarships will be continued.

5.145. Language Development: Provision has been made for the appointment of 2000 additional Hindi teachers in middle and secondary schools during 1977-79, in non-Hindi speaking States. These are in addition to 4,000 teachers appointed during 1974-77. This programme will be reviewed with a view to determining its benefits. The Central Institute of Indian Languages (Mysore), the Kendriya Hindi Sansthan (Agra), the Rashtriya Sanskrit Sansthan (New Delhi) and the Central Institute of English and Foreign Languages (Hyderabad) will be further developed.

5.146. Other Programmes : Provision has been made for strengthening of the existing Nehru Yuvak Kendras and for setting up some more Kendras at approved places. While the coverage of the National Service Scheme will be expanded. National Service Volunteers Scheme is expected to be launched on a pilot basis. Facilities for games and sports, coaching camps and rural sports will be expanded. Provision has been made for the development of Central Libraries.

5.147. Technical Education : Generally, the emphasis is on consolidation and quality improvement in terms of faculty development, replacement of obsolete equipment and diversification of courses. Centres of studies in material science, cryogenic engineering, energy studies and ocean engineering are expected to be established in close collaboration with user agencies. Provision has been made for augmenting physical facilities at the existing Institutes of Management, and preparatory work will be started for establishment of the fourth Institute at Lucknow. Reginal Engineering Colleges and the Engineering Departments in the universities will be-further developed.

5.148. Cultural Programmes : Provision has been made, inter alia, for further development of the three national academies of Sahitya, Sangeet Natak and Lalit Kala, propagation of culture among college and school students, revision of district gazetteers and development of various activities of the Archaeological Survey of India.

5.149. 20-Point-Socio-Economic Programmes : Three components of this programme are provision of books and stationery to students at cheaper rates, supply of essential commodities to hostel students at subsidised prices and expansior if apprenticeship training programme. The capacity of the textbook printing presses is being developed further. Book banks will continue to be established in educational institutions. The coverage of apprenticeship scheme is being expanded.

5.150. Outlays : For completing the various tasks related to educational development, an outlay of Rs. 1285 crores has been provided for different sectors as indicated below :

(Rs. crores)

sub-head likely expenditure 1974-77 proposed 1977-79

proposed fifih plan outlay

(0) (1) (2) (3)

1. elementary education 180 230 4102. secondary education 111 139 2503. university education 140 152 2924. special education 9 9 185. other programmes 57 65 1226. toial (general education) 497 595 10927. technical education 75 81 1568. art and culture 16 21 379. Total education 555 697 7285

In relation to the first three years, the proposed outlay in the next two 'ears marks a considerable step-up.

8. Health, Family Welfare Planning and Nutrition

Health Central Sector

5.1 51. In the draft Fifth Plan, an amount of Rs. 252.79 crores was provided for this sector The expenditure during the first three years is likely to be Rs. 1 52-93 crores. An outlay of Rs. 182'90 crores has been recommended for the last two years after assessing the performance of various major on-going programmes and after keeping in view the broad aspects of health strategy.

5.152. Among the Centrally sponsored schemes National Malaria Eradication Programme has been allocated Rs. 196-44 crores as against the original provision of Rs 96-71 crores in the Draft Fifth Plan. A

substantial increase in the outlay for this programme has become necessary to contain the disease according to a revised strategy. Provision has also been made for more effective implementation of National Leprosy Control Programme and the National Scheme for prevention of impairment of vision and control of blindness. A pilot research project to develop a strategy for control of filaria in rural areas has also been included. Adequate provision has been made during 1 977-79 for establishing combined food and drug testing laboratories and for giving Central assistance to existing food laboratories in the States.

State Sector

5.153. An outlay of Rs. 543 21 crores was provided in the draft Plan for various health programmes under the States and Union Territories. The total likely expenditure for the first three years of the Fifth Plan is estimated at Rs. 159-92 crores. For the remaining two years of the Fifth Five Year Plan i.e., 1977-79, an outlay of Rs. 185-91 crores has been recommended.

5.154. These provisions include the requirements of the on-going programmes and the reed for reasonable expansion, extension and development of rural health services. It has been ensured that all the primary health centres and sub-centres in the country would get drugs at the enhanced level of Rs.1 2,000/-per PHC and Rs. 2,000/- per sub-centre per annum. Adequate provision has also been made for medical education.

General

5.155. The revised total Fifth Plan outlay for the Health Sector thus works out to Rs. 681.66 crores. The break-up of the outlay for the Central and State Sectors is given below :

(Rs. crores)

scheme 1974-77 anticipated expenditure


revised fifth plan outlay

(0) (1) (2) (3)1. central 28.60 39.06 67.662. centrally sponsored 124.33 143.84 268.173. siaies/U.Ts 159.92 185.91 345.834. Total 372.85 368.87 681.66

Family Welfare Planning Programmes

5.156. In the draft Plan an amount of Rs. 516.00 crores was provided for programmes relating to family welfare planning. The likely expenditure during the first three years of the Fifth Plan is expected to be of the order of Rs. 237.65 crores.

5.157. An outlay of Rs. 259'71 crores has been recommended for the period 1977-79. The family planning programmes wilt be carried forward in an integrated manner alongwith Health,Maternity and Child Health Care and Nutrition services on the basis of the strategy outlined in the draft Fifth Plan. Firm and bold steps envisaged in the National Population Policy to improve the tempo of the programme has been kept in view in recommending the revised outlays. To cope with the increasing demand for sterilisation, facilities will be expanded at 1000 selected Primary Health Centres and 325 Taluka level hospitals during 1976-79. Two hundred additional post-partum centres beyond the original targets in the draft Fifth Plan are also proposed to be opened. Another unit of the Hindustan Latex Ltd. will be set up at Farakka to meet the increased demand of Nirodh. The India Population Project with Sl DA/I DA assistance will be carr.pleted by the end of the Fifth Plan. Special multi-media motivation campaigns on pilot basis will be launched in Uttar Pradesh, Andhra Pradesh, and West Bengal. Maternity and child

health programmes will be vigorously pursued and furds for this purpose will be made available on the basis of performance. Research and evaluation facilities will be strengthened. Funds for completion of incomplete buildings and for construction of essential buildings for Rural Family Welfare Planning Centres have been provided. 288 New Rural Family Welfare Planning Centres will be opened in a phased manner.

5.158. A total provision of Rs. 497.36 crores has been envisaged in the revised Fifth Plan. Summary of the outlays is given in the enclosed statement (Annexure 37).

Nutrition Central Sector

5.159. Indraft Fifth Ptan, an amount of Rs. 70 crores was provided in the Central Sector. Rs. 50 crores were earmarked for the Subsidiary Food and a Nutrition Scheme of the Department of Food, and Rs. 20 crores for the Applied Nutrition Programme of the Department of Rural Development.

Nutrition Schemes of the Department of Food

5.160. The likely expenditure during the first three years of the Fifth Plan is placed at Rs. 6.53 crores. Under the revised Fifth Plan an outlay of Rs. 6.70 crores has been provided during 1977-79 for production of nutritions foods. An amount of Rs. 1.27 crores has also been recommended during 1977-79 for other schemes like fortification of Food Stuffs, nutrition education through mass media, Pilot Research Projects etc. An outlay of Rs. 7.97 crores has thus been recommended for 1977-79 making up a Fifth Plan provision of Rs. 14.50 crores.

Applied Nutrition Programme (Deptt. of Rural Development)

5.1 61. The outlay of Rs. 20 crores provided in the draft Fifth Plan was meant for providing Central assistance to the on going Applied Nutrition Blocks, opening of 700 new blocks and maintenance of post operational blocks for one year after existence for a period of five years. Due to constraint of resources in the social Services Sector only 192 blocks were set up in the first two years (1974-76) of the Plan. The likely expenditure during the first three years of the Plan is Rs. 4.48 crores. A sum of Rs. 8.51 crores has been recommended for 1977-79. The total outlay under the revised Fifth Plan works out to Rs. 1 2.99 crores.

State Sector

5.1 62. In the draft Fifth Five Year Plan, an amount of Rs. 330.00 crores was provided for the States and Union Territories, for the supplementary Feeding programmes, i. e.. Mid-day Meals Programme for the School going children and Special Nutrition Programme for the children in the age group of 0-6 years and expectant and lactating mothers. Likely expenditure during the first three years of the Plan is placed at Rs. 44.24 crores. The slow progress in the initial years of the Fifth Plan was mainly due to the financial constraint and non-availability of funds in the non-Plan budgets of the State Governments for meeting cost of food, administration and transport for the beneficiaries. For the remaining years of the Fifth Plan adequate provision has been made from the non-Plan resources of the State for beneficiaries cf special nutrition programme at the end of the Fourth Plan. After taking into account a reasonable expansion, a provision of Rs. 43.94 crores has been recommended by Planning Commision for 1977-79-The revised outlay under the Fifth Plan thus works out to Rs. 88.18 crores. A statement showing programme-wise break-up under the revised Fifth Plan is attached (Annexure 38).

9. Urban Development, Housing and Water Supply

Urban Development

5.163. Provision made in the State Plans for integrated Urban Development are being supplemented by funds provided for the scheme of integrated Urban Development in the Central Sector. This scheme provides loan assistance to State Governments for developing the necessary infrastructure. It is expected that over a period of time the State Governments will be able to build up a corpus of seed money for expansion programmes

5.164. Urban Development progrmmes were taken up in the three metropolitan cities of Calcutta, Bombay and Madras and nine other cities in 1974-75. Additional six cities were taken up in 1975-76 and it is expected that six more will be taken up during 1976-77. Work for the preparation of Plans for some other cities is in hand .

5.165. In view of the progress made so far, total provision of Rs. 256.13 crores has been made for Urban Development for next two years against a likely expenditure of Rs. 249.33 crores during 1974-77, as indicated in Annexure 39.Housing

5.166. The main thrust of the programmes in the Fifth Plan is directed towards ameliorating the conditions of the backward sections of the society. This is sought to be achieved by augmenting the programmes for the construction of housing colonies by State Housing Boards and by taking up on a large scale a programme for the provision of house-sites for landless labourers in rural areas. While the bulk of this programme is being undertaken in the State Plans, the activities of the Housing and Urban Development Corporation in the Central sector are being geared up to meet the expanding demand. A provision is being made to increase the Equity participation in HUDCO to enable it to generate resources of the order of Rs. 150 crores in the Fifth Plan period. Separate provisions have been made for the scheme of subsidised housing for plantation labourers and Dock labourers. AdeqLate emphasis has also been placed on research and development activities for generating better and cheaper designs. The outlays for various programmes in the State and Central sectors have been indicated in Annexure 40.

Water Supply and Sanitation Rural Water Supply

5.167. The main objective is to provide safe water supply in difficult and problem villages. At the end of the Fourth Plan period, it had been estimated that there were 1.13 lakhs of such villages. It is expected that in the first three years of the Fifth Plan with a provision of Rs. 201.10 crores, about 57,800 villages would have been covered. The allocation made for the remaining two years is on the basis of providing safe water supply for additional 53,900 villages. The provision which has been made is of the order of Rs. 180.14 crores (inclusive of Rs. 1 57.87 crores under the MNP). The revised Fifth Plan outlay would now be Rs. 381.24 crores.

Urban Water Supply and Sanitation

5.168. Particular emphasis is being laid on completion of spill over schemes. In the first three years with an investment of Rs. 257.54 crores, about 266 towns are likely to be covered with water supply and 46 towns with sewerage and drainage systems. With an outlay of Rs. 281.63 crores for the remaining two years of the Fifth Plan, about 254 towns are likely to be covered with water supply and 38 with sewerage and drainage systems. The outlay mentioned above will be supplemented from the Central sector scheme of Integrated Urban Development in cities of national importance such as Bombay, Calcutta, Madras, Hyderabad, Ahmedabad, Bangalore, Kanpur, Lucknow, Agra, Allahabad, Varanasi, etc. The outlay in the Fifth Plan amounts to Rs. 539.17 crores against the outlay Rs. 431.00 crores in the Draft Fifth Plan.

5.169. The revised Fifth Plan also provides for an outlay of Rs. 10.27 crores for supporting programmes such as public Health Engineering training to train about 3000 Public Health Engineering personnel and mechanical composting to set up 27 mechanical compost plants along with 60 mechanical sieve plants in different cities. A provision also exist for converting about 30,000-35,000 dry latrines into sanitary latrines.

5.170 The revised outlays for water Supply and sanitation are given in Annexure 41.

10. Craftsman Training and Labour Welfare Central Plan

5.171. In the draft Fifth Plan, an amount of Rs. 14.57 crores was provided in the Central Plan. The likely expenditure during the first three years of the Fifth Plan is placed at Rs. 4.01 crores.

5.172. For the two year period 1977-79 a provision of Rs. 10.17 crores has been made. This will cover (i) the requirements of the major on-going training institutions such as the Central Staff Training and Research Institute, the Foreman Training Institute, and the Central Training Institutes for instructors ; (ii) the strengthening/extension of the Advanced Training Institute ; (iii) the expansion of the Apprenticeship Training programme ; (iv) Vocational Training in Women's occupations ; and (v) Sche.nes relating to research, surveys and studies to be undertaken by various institutes.

Flans of States Union Territories

5.173. In the draft Fifth Plan, an amount of Rs. 42.37 crores was provided for States and Union Territories. The likely expenditure during the first three years of the Plan is placed at Rs. 15.69 crores.

5.174. For the two year period 1977-79, an .outlay of Rs. 20.27 crores has been suggested keeping in view the requirements of (i) the industrial training institutes ; (iiy-the expansion of the Apprenticeship Training Programmes in the establishments ; (iii) the strenghtening of the employment service organisations; (iv) the setting up of labour welfare centres, and promoting safety measures; and (v) the Employees' State Insurance Scheme,

Revised Fifth Plan Outlays for Craftsmen Training and Labour Welfare(Rs. lakhs)

draft fifth five year plan

1974-77 anticipated expenditure


revised fifth plan outlay

(0) (1) (2) (3) (4)centre 1457 401 1017 1418state 3751 1407 1685 3092union territories 486 162 342 504Total 5694 1970 3044 5074

ll. Hill and Tribal Areas, Backward Classes Social Welfare and Rehabilitation

Hill Areas

5.175. This scheme refers to the hill regions of Assam, Tamil Nadu, U.P., West Bengal and the Western Ghats region. Programmes of singnificance are funded party from the State Plan and partly from the sub-plan allocations. During the fisrt three years of the Plan, Central allocations would be of the order of Rs. 76 crores while the States are likely to invest about Rs. 68 crores.

5.176. With the experience gained so far, the programme is now expected to gather momentum. A provision of Rs. 94 crores is earmarked for the next two years in the Central Plan.

Tribal Areas

5.177. Tribal sub-plans incorporating programmes of particular significance to the tribal economy are being prepared for areas, with large concentration of Scheduled Tribes, in 16 States and 2 Union

Territories. These programmes are funded through provisions in the State Plans, and Central assistance. So far about 40, out of 145 Integrated Tribal Development projects have been formulated and an amount of Rs. 65 crores is likely to be spent during the first three years of the Plan.

5.178. Initial difficulties are now expected to be overcome and it is expected that the rest of the lTDPs would be formulated and implemented in the remaining period of the Fifth Plan. On this basis, a provision of Rs. 125 crores of Central assistance is being made for the next two years.

5.179. Priority has been accorded to regional schemes of agriculture, power and communications forwarded by NEC for securing a balanced development of the north-eastern region. It is expected that in the first three years an expenditure of Rs. 28 crores would be incurred on such schemes. Due to initial difficulties in identifying and implementing schemes, the programme has had a slow start. It is, however, now gathering pace. A provision of Rs. 62 crores has been kept for the next two years.

5.180. A statement indicating the outlays for these programmes is given below :

(Rs. crores)

anticipated expenditure 1974-77 outlays for 1977-79 total fifth plan

(0) (1) (2) (3)1. Hill areas 76 94 1702. N.E.C. 28 62 903. tribal areas 4. total

65 169

125 281

190 450

Welfare of Backward Classes

5.181. The revised Fifth Plan outlays for the Centre and the States have been raised to Rs. 119 crores and Rs 208 crores respectively. The details are given in Annexure 42. In the Central Plan, emphasis has been placed on post-matric scholarships, schemes for coaching of students and girls' hostel. In the State Plans, provision has been made inter alia for educational incentives, subsidised housing, various agricultural programmes and requirement of development Corporations.

Social Welfare

5.182. The revised Fifth Plan outlays for the Centre and States are Rs. 63.53 crores and Rs. 22.60 crores respectively. Details are given in Annexure 43.

5.183. These outlays are related to the progress reported in the implementation of the various schemes. Care has been taken to ensure that important programmes like Intergrated Child Care Services, Working Girls Hostels, Scholarships for Handicapped Persons in the Central Sector and women and child welfare Programmes and Programmes of Social Defence in the State sector are provided adequate funds.

Rehabilitation

5.184. The Draft Fifth Plan envisaged the resettlement of 65827 families. This figure has now been reassessed at 67067 familes. It is expected that against an overall expenditure of Rs. 47.62 crores in the first three years of the Plan, 35767 families would have been recently resettled. The outlays for the next two years of the Fifth Plan are based on the following considerations :

(i) Sri Lanka : Of the expected 28,434 families, 16,434 have so far been resettled at a cost of Rs. 14.17 crores. It is expected that 12,000 families would be resettled during the next two years at an approximate cost of Rs. 14 crores.

(ii) Dandakarnaya : Of the 9120 families in camp, 3120 have been resettled in the first three years at an approximate cost of Rs. 1 3.54 crores. It is expected that 6000 families would be resettled in the remaining period of the Plan at an approximate cost of Rs. 12 crores. Besides the direct cost of resettlement, the outlays include expenditure on major irrigation projects and other infrastructure development.

(iii) Residual problems of rehabilitation in West Bengal : On the basis of the recommendations contained in the report of the working Group set up by the Department of Rehabilitation, a provision of Rs. 10.20 crores has been made. This is based on an assessment that besides acceleration of the SFDA/MFAL programmes in areas where these migrants were concentrated and outlays required for the provision of medical facilities, 8000 plots in the colonies of displaced persons located in the Calcutta Metropolitan District and 4000 other urban plots would be developed.

(iv) Other Schemes : With regard to progammes for the resettlement of repatriates from Burma, West Pakistan, Uganda, Zaire and migrants from Indian enclaves in former East Pakistan, an expenditure of Rs. 1 7.73 crores has been incurred in the first three years of the Plan, to resettle 1 5843 families. It is expected that in the remaining two vears 11 300 families would require resettlement for which a provision of Rs. 1 7.39 crores has been made.

5.185. Scheme-wise outlays provided in the Fifth Plan are given in Annexure 44.

12. Science and Technology

5.186. In finalising the Fifth Five-Year Plan for Science and Technology (S&T) an attempt has been made to restructure research programmes as far as practicable into projects with predetermined time spans, costs and expected benefits. In a departure from previous practice, the S&T programmes of the different Ministries were the subject of separate discussions at which emphasis was placed on aligning research programmes to conform more closely with plan priorities and promoting quicker interaction between the users of research and the research agencies, so that problems ara more sharply defined and transfer of technology is facilitated.

5.187. Particular attention Fs expected to be paid to fuller use of existing facilities, avoiding of unplanned duplication of research into similar problems by different agencies, minimising sub-critical funding by spreading resources over too many projects, and closer monitoring of research programmes right up to the stage of their application in the field.

5.188. The thrust of the various sectoral programmes broadly remain as outlined in the draft Fifth Plan. In agriculture, specific emphasis will be placed on programmes to control crop diseases, crop sequencing, dry farming, agricultural implements, post harvesting technology etc. New agro-industrial complexes, setting up of a fish farm and increased support to agricultural institutes, animal sciences and fisheries institutes are envisaged in the Plan. Programmes for improving the technology used in village and rural industries are proposed to be intensified. Activities proposed cover bee keeping, pottery, palm gur, gur and khandsari. To acquire a closer insight into the problems of optimal management of water resources, an Institute of Hydrology is proposed to be set up. Steps will be taken to see that central R & D irrigation schemes are not sub-criticaliy funded and a mechanism is set up to see that research findings are expeditiously applied in the field.

5.189. In the area of energy, a multi-pronged approach to develop biogas technology, as well as new sources such as solar energy, tidal and wind power has been initiated. A major programme on magneto hydro dynamics is being undertaken as an inter-institutional project. Programmes for improved mining

techniques, mine safety, transportation and gassification of coal have been given priority. Programmes for developing stowing materials, improved instruments, and processes for upgrading coal are being funded.

5.190 In power engineering, test facilities, specially those connected with high voltage/DC transmission lines have been given special attention. No significant departures from the draft Fifth Plan programmes have been proposed in the research programmes of the Department of Atomic Energy except for the power reactor fuel reprocessing plants and investment in facilities for making seamless steel tubes for ball bearings and power plants.

5.191. In steel, the major thrust in use of S&T has been to improve the productivity and capacity utilisation of the steel plants, utilise low grade materials, improve refractory quality, develop new alloys and work on new techniques for making sponge iron. A wide range of chemicals particularly pesticides, drugs, and intermediates hitherto imported, is being developed by several institutions, in particular by CSIR laboratories and the public sector companies in these fields. In heavy engineering, the setting up of a research institute for welding deserves special mention.

5.192. Special emphasis is being paid to surveying and research on developing the country's natural resources. The programmes of bodies such as the National Remote Sensing Agency, geological and other surveying agencies and National Institutes of Oceanography have been given high priority. These are being supplemented by the programme of the Department of Space for launching satellite with remote sensing capabilities and institutional research facilities for petroleum exploration and reservoir studies. Tree breeding and prevention of disease in important tree species have been given special attention. In meteorology, apart from strengthening the existing institutes, a major new programme is India's participation in Monsoon 77 in collaboration with USSR and Monex (monsoon experiment) as a part of a world-wide study of the factors which affect the weather. Provision has been made for INSAT-1, the proposed Indian-owned geo-synchronous satellite which will provide a variety of meteorological data.

5.193. In health, the focus has been placed on research into new methods of family planning, integrated system for delivery of health care services to infants, and control and prevention of communicable diseases including malaria, tuberculosis and cholera.

5.194. The priority area in housing and urban development is the development of new low cost housing designs and materials, rural sanitation and waste water treatment. Agencies concerned with environmental protection have been given due attention.

5.195. In the area of electronics, substantially more funds will be given to various institutions for research in the indigenisation of a large variety of electronic components. In addition, the Department of Electronics will establish major multi-user regional computer centres in certain metropolitan cities and set up a corporation for making semi-conductor devices. Support will be given to developing the infra-structure for electronic standards and testing techniques at various institutes like NPL and the national test houses. The Department has already established corporations for maintaining computers & developing trade and technology in electronic items. Tele-communication research will concentrate on indigenising many of the components hitherto imported and development work on electronic communication systems, the major emphasis being on instruments, transmission system and exchange equipment. An Asian Telecommunication Training Centre is proposed to be set up at Ghaziabad.

5.196. The major efforts in space research will be to gear up research work and develop components to enable a series of variants of the SLV 111 launcher being produced and more advanced satellites being launched in collaboration with other countries. The proposed INSAT-1 which, in addition to meteorological equipment will have various tele-cummunication and other capabilities, will give added relevance to these programmes.

5.197. Under the Department of Science & Technology, plans have been finalised for making a beginning with the national information system on science and technology (NISSAT). Provision has been made for

the manufacture of fer rites and electronic ceramics by a new company and for a substantial step-up in funds for sponsored projects under the Science and Engineering Research Committee.

5.198. Considerable effort is proposed to be put into developing new instruments for operation, process control, measurement and research by a variety of agencies. Coordinating inputs are proposed to be provided by the Instrument Development Division of the Department of Science & Technology.

5.199. Testing facilities under agencies like the National Test House and Indian Standards Institution will be strengthened.

5.200. In order to stimulate indigenous research, industrial licensing regulations have been liberalised in the case of industries which are proposed to be set up based on R&D developed in-house or by national laboratories. The question of levying R&D cess is under consideration.

5.201 A Department wise distribution of the outlays for Science and Technology is indicated in Annexure 45. A provision of Rs. 5 crores has been included in the outlays of each of the Ministries of Information & Broadcasting and Tourism & Civil Aviation (Meteorology) for INSAT.

6th Five Year PlanOBJECTIVES AND STRATEGY OF THE SIXTH FIVE YEAR PLAN

The Sixth Five Year Plan has been formulated taking into account the achievements and failures of the past three decades of planning, recent economic developments which have a bearing on the growth prospects of the economy in the medium term as well as the vision of the future as reflected in the long term perspective. The removal of poverty is the foremost objective of the Sixth Plan even though it is recognised that given the magnitude of the task, it cannot be accomplished in a short period of five years. Inevitably, the pace of movement towards the long-term objectives of removal of poverty and the achievement of self-reliance and the nature of priorities in the immediate period ahead, are influenced by the current economic situation and the constraints operating in the economic system. It should be recognised that the Sixth Plan is being launched under difficult conditions. These include the acute inflationary pressures which have prevailed since March 1979, a set-back in the functioning of such critical sectors as power, coal, railways and steel and the steep rise in the price of petroleum products resulting in an increasing deterioration in the nation's terms of trade and the balance of payments. A realistic blue-print of the Sixth Plan must take note of these unfavourable developments. Effective solution for the existing difficulties are a precondition of successful implementation of the Sixth Plan. It goes without saying that any effective solutions for these problems must be consistent with long term social and economic objectives so that the economy emerges out of these difficulties with improved growth prospects. Thus the economy is faced wl.th many challenges and these will have to be met with courage, determination and a firm faith in India's destiny and future.

3.2 The v/holesale price index has risen by nearly 17 per cent between 1979 and 1980 and by nearly 16 per cent between April and November, 1980-81. With rising prices, the real resource content of the Plan is likeiy to erode over time with consequent adverse effects on the prospects for growth. Rational and balanced economic policies for checking inflation and measures to protect the real size of the Plan will need to be formulated.

3.3 Trends in capacity utilisation upto 1979-80 in major industries have been a source of considerable concern because in most cases there has been a decline after 1976-77. For accelerating the tempo of industrial growth, improving the rates of return on capital and generating .additional resources for the Plan, improvement in capacity utilisation must be regarded as a pro-condition for the success of the Sixth Plan (Table 3.1).

Table 3.1 Measuremeat of Capacity Utilisation la Major Sectors, 1976 to 1979-80(Per cent)

Sl.No Sector 1976-77 1977-78 1978-79 1979-80(0) (1) (2) (3) (4) (5)1 Saleable Steel (Integrated

Plants) 91.9 90.3 81.5 69.1

2 Aluminium 83.5 61.3 66.4 58.23 Fertilizers (N) (Stabilised

Plants) 83.6 82.3 83.3 76.6

4 Fertilizers (P202) 66.0 78.0 73.4 61.55 Cement 86.6 88.8 85.6 72.66 Newsprint 76.9 74.7 64.0 63.27 Paper and Paper Board 79.0 76.0 72.4 68.28 Power Generation Thermal

(All India Average Percent Capacity Factor)

56.0 50.8 48.4 45.0

9 Railways (Index of Net Tonne-Kilometres Freight Traffic, 1950-51=100)

356 369 351 350

As is evident from the table, recent trends in capacity utilisation in several industries are discouraging. This is also true for agriculture. For example, the irrigation po:ential which has been created is not fully utilised. Levels of yield per acre for many parts of the country are far 'below what can be attained with known technology. While the poor utilisation of capacity represents a waste of resources and thus adds to the resource oonstriaint, it also provides an opportunity for a quick increase in output and productivity in the short run, thus improving the prospects for controlling inflation and creating conditions for accelerated growth in output as well as investment in coming years.

3.4 The poor utilisation of capacity in agriculture as well as in industry stems from many factors but the major problem areas cam be located in the basic infrastructure of power .and transport. The efforts currently under way are expected to improve the;short run situation with respect to power and transport;but further intensive efforts will be required over the Sixth Five Year Plan.

3.5 India's balance of trade has shown an adverse trend since 1977-78. As against ;a surplus of Rs. 72 crores in 1976-77, the deficit in trade balance was Rs. 621 crores in 1977-78 and is reported to have been more than Rs. 2370 crores in 1979-80. The available data regarding the balance of tr,ade for the first six months of 1980-81 show that the defici.t has already exceeded Rs. 3000 crores. The increase in trade deficit du'rina: 1977-80 was due not only to tha lower export growth of 6.1 pe,r cent compared to the growth rate of 26.8 per cent between 1974-7 at current prices, but also due to the rise in the vail of imports at an average rate of 19 per cant annual!

3.6 This unfavourable picture is largely due 1 sharply deteriorating terms of trade since 1973-7 with some improvement temporarily in 1976-77 an 1977-78. The index of terms of trade with 1968: 100 shows a decline to 90 in 1978-79 when expo prices declined somewhat and import prices rose i general by 4.4 per cent and further deteriorated ver sharply in 1979-80 when import prices, particularl those of petroleum products, rose consideraK resulting in a large trade deficit.

3.7 If despite this picture on the trade account, th foreign exchange reserves continued to rise up1 1978-79 it was due to the buoyancy of invisib;receipts, in particular remittances from Indial working abroad. It is quite possible that these n mittances have reached their peak. Also the inte:national economy in general faces a sharp recessic 'of demand which, together with the protectioni tendencies in the industrialised

countries, poses serious challenge to our efforts to expand expo earnings. The general situation in the oil exportir countries is also such as not to hold out hopes of an substantial increase in the demand for our expor or for migrant labour. Already in 1979-80, the] was a slight decline of Rs. 56 crores in forei^ exchange reserves and in 1980-81 by December 2' they had fallen further by Rs. 381 crores despi' recourse to the I.M.F. to the tune of Rs. 815 crore Table 3.2 shows the main indicators of external coi straints.

Table 3.2 Selected Indicators of Developments in the External Sector

Sl No

Item 1976-77 1977-78 1978-79 1979.80

(0) (1) (2) (3) (4) (5)1 Exports as per cent of Imports 101.4 89.7 84.1 73.02 P.O.L. bill

(i) Rs. crores 1413 1551 1677 3200(ii) As per cent of exports . 27.5 28.7 29.5 49.8

3 Net External Assistance as per cent of imports 16.6 7.7 5.7 7.84 Foreign Exchange Reserves (year end) (Parenthesis show

variation) (Rs. crores) .2863 (1371)

4500 (1637)

5220 (720)

5164 (-56)

5 Debt service as par cent of exports (i.e. Repayment and interest)

14,7 15.2 15.4 11.1

6 Invisibles as per cent of exports 16.0 26.2 33.3 35.27 Trade deficit (Rs. crores) 72 (-)621 (-)1088 (-)2370

3.8 Growth prospects of the economy have been adversely affected by all these three factors: infla-lionary situation, constraints imposed by a poor performance in the basic infrastructure and the deteriorating balance of payments position. Since, however, the long term prospects of the economy depend, significantly on the development of domestic resources of oil, coal, power, and renewable source of energy, on the investment in the modernisation and expansion of transport and on a rapid growth in agriculture and tliral development, it will be necessary to make the requisite effort to mobilise resources in the face of all these difficulties so as to put the economy back on the path of sustained and self-generating growth.

OBJECTIVES

3.9 It is in the lisht of these considerations that the obiectives of the Sixth Plan have been formulated. These are given below. Along with the objectives are also listed major areas of effort which will be required to fulfil these objectives:

i. a significant step up in the rate of growth of the economy, the promotion of effifiencv in the use of resources and improved productivity;

ii. strengthening the impulses of modernisation for the achievement of economic and '. technological self-reliance;

iii. a progressive reduction in the incidence of poverty and unemploymentiv. a speedy development of indigenous sources of energy, with proper emphasis on conservation

and efficiency in energy use;v. improving the Quality of life of the people in general with special reference^ to the economically

and socially handicapped population, through a minimum needs programme whose coverage is so designed as to ensure that all parts of the country attain within a prescribed period nationally accepted standards;

vi. strengthening tho redistributive bias of public policies and services in favour of the ' poor contributing to a reduction, in inequalities of income and wealth;

vii. a progressive reduction in regional inequalities in the pwe o^ development and in the diffusion of technological benefits;

viii. promotino policies for controlling the growth of population throueh voluntary acceptance of the small family norm;

ix. bringing about harmony between the short and the Iong term goals of development by protection and improvement of ecological and environmental assets; and

x. promoting the active involvement of all sections of the people in the process of development through appropriate educatinn communication and institutional strategies.

3.10 The strategy adopted for the Sixth Plan consists essentially in moving simultaneously to strengthen the infrastructure for both agriculture and industry so as to create conditions for jan accelerated growth in investments, output and exports, and to provide, through special programmes designed for the purpose, increased opportunities for employment especially in the rural areas and the unorganised sector and meet the minimum basic needs of lh& people. Stress is laid on dealing with inter-related problems, through a systems approach rather than In separate compartments; on greater managerial efficiency and intensive monitoring in all sectors and .active involvement of the people in formulating specific schemes of development at the local level and in securing their speedy and effective implementation. The attack on the problem of poverty is most effective only in the conditions of an expanding economy. Since growth by itself may not, however, suffice, other programmes and policies will need to be adopted with the specific aim of improving the living conditions of the masses and to bring about a reduction in inequalities of income and wealth. The scheme of the Sixth Plan outlays thus provides for specific allocations for such programmes.

MACRO-DIMENSIONS Aggregate Saving and Investment

3.11 The Sixth Plan envisages a total investment (gross capital formation) of Rs. 158710 crores over the plan period 1980-85 at 1979-80 prices. This is to be financed by domestic saving of Rs. 149,647 crores estimated at 1979-80 prices during the Sixth Plan and met inflow of funds from abroad to the extent of Rs. 9063 crores. Thus, nearly 94.3 per cent of the total investment is to be financed from domestic resources.

3.12 The total investment has been projected to grow from Rs. 23,618 crores in 1979-80 to Rs. 36,797 crores in 1984-85. At the same time, the GDP at market prices has been projected to increase from Rs. 108,546 crores to Rs. 146,540 crores during the same period. Thus, investment (as per cent of GDP at market prices) is expected to rise from 21.8 per cent in 1979-80 to 25.1 per cent in 1984-85.

3.13 Domestic saving has been projected to grow from Rs. 23,055 crores in 1979-80 to Rs. 35,870 crores in 1984-85. . As per cent of GDP at market prices, the saving rate is envisaged to increase from 21.2 per cent in 1979-80 to 24.5 per cent in 1984-85, implying a marginal rate of sav'.n" of the order or 33.7 per cent over the plan period 1980-S5.

3.14 The Sixth Plan aims at stepping up the rate of saving by bringing about an improvement in the ratio of saving to disposable income in the different sectors. Detailed estimates of sectoral disposable income, consumption and saving in 1979-80 and 1984-85 are given in Annexures 2.1 and 2.2, and are summarised in Table 3.3.

Table 3.3 Estimates of Disposable Income, Consumption and Saving: 1979-80 and 1984-85

Sl.No. Item Rs. crores at 1979-80 prices

Per cent of GNP

1979-80 1984-85 1979-80 1984-85

(0) 0) (2) (3) (4) (5)1 Public Sector

(i) Disposable Income 15772 25789 14.4 17.5(ii) Consumption 11757 16879 10.7 11.5(iii) Saving 4015 8910 3.7 6.0

2 Private Corporate and Cooperative Sector.(i) Disposable Income 1714 2972 1.5 2.0(ii) Consumption(iii) Saving 1714 2972 1.5 2.0

3 Household Sector(i) Disposable Income 92379 118374 84.1 80.5(ii) Consumption 75053 94386 68.3 64.1(iii) Saving 17326 23988 15.8 16.4

4 Total(i) Disposable Income 109865 147135 100.0 100.0(ii) Consumption 86810 111265 79.0 75.6(iii) Saving 23055 35870 21.0 24.4

3.15 Saving as per cent of corresponding disposable income is expected to rise from 25.5 to 34.5 per cent in the case of public sector and from 20.2 to 22.2 per cent in the case of private sector over the plan period 1980-85. Thus, saving effort in terms of sectoral disposable income is expected to show an improvement of 9 percentage points in the case of public sector and 2 percentage points in the case of private sector.

3.16 The _share of public sector in aggregate domestic saving would rise from 17.4 per cent to 24.8 per cent, while that of the households would decline from 75.2 per cent to 66.9 per cent, as shown in Table 3.4.

Table 3.4 Sectoral Shares in Total Domestic Saving

Sl.No Sector Rs. crores1 Share (per cent)1979-80 1984-85 1979-80 1984-85

(0) (1) (2) (3) (4) (5)1 Public Sector . 4015 8910 17.4 24.82 Private corporate and

Cooperative sector .1714 2972 7.4 8.3

3 Household sector 17326 23988 75.2 66.94 Total 23055 35870 100.0 100.0

1. At 1979-80 prices.

Rate and Pattern of Growth

3.17 The choice of the rate of growth of gross domestic product of 5.2 per cent per annum has already been explained in Chapter 2. The sectoral growth rates are determined by the demand for and supply of different commodities and services either through the market mechanism or as a result of specific public policies adopted to clear specific markets. Sectoral growth rates are thus subject to technical, behavioural

and institutional constraints as well as policies of the Government. A large part of the supply is determined by the investment decisions already made in the past; a large part of demand originates from the need for building up capacity for the future. There is also the foreign demand for our exports and the supply of imports from abroad. The pattern of growth is derived from a consistent system which is solved inter-temporally with an open economy model.

3.18 The model consists of an 89 sector input-output model integrating the Sixth Plan period with the perspective period (1985—95) through a 14 sector investment planning model. In working out the input-output model for the Sixth Plan, technological characteristics of the economy have been taken into account. The treatment of private consumption, public consumption, investment and foreign trade used in the model for projecting the sectoral outputs is discussed below-

3.19 Public consumption expenditure and exports for the terminal year have been estimated exogen-ously. While the aggregate public consumption expenditure has been assumed to grow at an annual rate of 7.5 per cent, certain social services like health and medical services, education and other social services have been postulated to grow at slightly higher rates in li.ne with the objective of increasing social consumption. Exports have been projected to grow at an average rate of 9 per cent per annum at the overall level, while individual commodity exports have been projected to grow at different rates.

3.20 The total investment outlay envisaged for the Sixth Plan period has been appropriately phased over the Plan period taking into account the gestation lags of the individual sectors and the growth profile both in the Sixth Plan and post Sixth Plan period. Sectoral investment outlay thus generated (i.e. investment by destinations) has been disaggregated into various capital goods and changes in stocks and used in the model (i.e. investment by sources).

3.21. Import projections for inter-industry use and final use for the terminal year have been endogen-ously derived through the use of import co-efficient matrices.

3.22. Private consumption expenditure on goods and services in the terminal year has been projected through the use of a consumption sub-model which considers demand functions for people below and above the poverty line as well as rural and urban areas separately. The projected demand pattern takes into account the consumption requirements consistent with the objective of a significant reduction in the proportion of people below the poverty line. Redistribution of consumption in favour of the poorer sections of the population has been provided for to assess the output implication's of the postulate of a reduction in the percentage of population below the poverty line to 30, both in rural and urban areas by 1984-85.

3.23 The internally consistent and feasible sectoral pattern of growth satisfying the selected growth strategy, corresponding to the aggregate annual growth rate of 5.2 per cent in GDP and the envisaged reduction in poverty is given in Table 3.5.

3.24 While significant growth is projected for all the sectors, the changing pattern of demand, as is to be expected in a developing economy, indicates different growth rates at sectoral level, leading to a idiversification of the production structure of the economy. The consequent structural change in the composition of gross domestic product over the Pl,an period is shown in Table 3.6. The share of mining and manufacturing in gross value added goes up from 19.59 per cent in 1979-80 to 21.22 per cent in 1984-85, of electricity from 1.71 per cent to 1.88 per cent, •of transport from 4.89 per cent to 4.95 per cent and bf services from 33.61 per cent to 34.00 per cent, x&dioating that agriculture would contribute 32.90 per cent of gross value added in 1984-85 as against 35.13 per cent in 1979-80.

Table 3.5 Projected Sectoral Growth Rates of Value of Gross Output and Gross Value Added at Factor Cost 1984-85/1979-80

Sl.No. Sector Value of Gross Output

Gross Value Added

(0) (1) (2) (3)(Per cent Per Annum Compound)1 Agriculture 5-20 3-832 Mining and Manufacturing 7-76 6-90

(a) Mining 11-50 11-25(b) Manufacturing 7-62 6-50(i) Food Products . 6-20 4-35(ii) Textiles 4-40 3-61(iii) Wood and Paper Products . 6-80 5-30(iv) Leather and Rubber Products 6-50 6-33(v) Chemical Products . 11-00 9-33(vi) Coal and Petroleum Products 7-50 7-35(vii) Non-Metallic Mineral Products 6-50 5-15(viii) Basic Metals 10-40 8-75(ix) Metal Products . 8-20 8-09(x) Non-Electrical Engineering Products 11-20 9-11(xi) Electrical Engineering Products 10-02 8-70(xii) Transport Equipment 10-15 9-00(xiii) Miscellaneous Industries 4-20 4-06

3 Electricity, Gas and Water Supply 11-25 7-154 Construction 7-10 5-105 Transport 6-70 5-466 Services 6-00 5-44

total 5-20

3.25 The projected rates of growth in output in the different sectors have been translated sn terms of physical targets for important commodities in order to facilitate the formulation of necessary investment projects and production programmes. In addition, the physical targets for key commodities have also been cross-checked through the system of material balances.

Table- 3.6 Sectoral Composition of Gross Value Added: 1979-80 and 1984-85(Per cent)

Sl. No. Sector 1979-80 1984-85(0) (1) (2) (3)1 Agriculture 35-13 32-902 Mining and Manufacturing 19-59 21-22

(A) Mining 1-52 2-01(B) Manufacturing 18-07 19-21(i) Food Products . 1-77 1-70(ii) Textiles 3-11 2-88(iii) Wood and Paper Products . 1-02 1-03(iv) Leather and Rubber Products 0-50 0-52(v) Chemical Products . 2-55 3-09(vi) Coal and Petroleum Products 0-45 0-49(vii) Non-Metallic Mineral Products 1-05 1-05

(viii) Basic Metals 1-26 1-49(ix) Metal Products . 0-96 1-10(x) Non-electrical Engineering Products 1-38 1-66(xi) Electrical Engineering Products 0-60 0-71(xii) Transport Equipment 1-02 1-23(xiii) Miscellaneous industries . 2-40 2-26

3 Electricity, Gas and Water Supply . 1-71 1-884 Construction 5-07 5-055 Transport 4-89 4-956 Services 33-61 34-00

total 100-00 100-00

Pattern of Public and Private Investment

3.26 The total Plan investment for the period 1980-85 is estimated at Rs. 158710 erores. Of this, Rs. 84000 erores* (53 per cent) is estimated to be m the public sector and the balance of Rs. 74710 crores (47 per cent) in the private sector.

3.27 Estimates of investment during the Plan period by 14 sectors of destination as derived from the investment planning model are given in Table 3.7. Incremental gross value added over the Plan period ill the respective sectors is also provided in the table. In addition the public sector plan includes current outlays amounting to Rs. 13,500 crores.

Table 3.7 Gross Investment by Destination Sectors and Ineremen) in Gross Domestic Product (GDP) at Factor Cost (198ft—85)

(Rs. crores at 1979-80 prices)

Sl.No. Sector Investment (at market prices)

Increme--caental GDP (at factor cost)

(0) (1) (2) (3)1 Agriculture 32242 64042 Forestry and Logging 478 3273 Fishing 748 3184 Mining and Quarrying 6575 10405 Manufacturing 45515 65006 Construction 1760 138S7 Electricity, Gas and Water Supply 23554 6868 Railways 4724 4209 Other Transport 11330 102510 Communications 2902 26211 Trade, Storage and Ware Housing . 7299 502612 Banking and Insurance 260 96813 Real Estate and Ownership o:

Dwellings 16437 923

14 Other Services (including Public Administration and Research)

4886 2711

15 Total at factor cost .. 27999

16 Total at market prices 158710 37994

3.28 The distribution of private investment i the major sectors is shown in Table 3.8.

Table 3.8 Distribution of Private Sector Investment 1980-85(Rs. crores at 1979-80 prices)

Sl. No. Sector Amount Share(%)(0) (1) (2) (3)1 Agriculture & Alied 16101 21.552 Industry & Minerals 30323 40.593 Power 189 0.254 Transport & Communications 3390 4.545 Others 24707 33.07

total 74710 100.00

the estimates of investment requirement for the different activities in the private sector have been derived on the basis of the targeted growth rates, the contribution of the public sector and the investment requirements for the generation of new capacity estimated from incremental capital-output ratio derived from past time-series data.

3.29 Investment in mining and manufacturing (including small and village industries) in the past has been nearly one-third of the total private investment. In the present Plan this ratio is likely to go up to nearly 41 per cent of the total. The organised private corporate and cooperative sectors in mining, manufacturing and non-financial services have shown an investment requirement of Rs. 19582 crores. Of this, cooperative sector is estimated to require an investment of Rs. 2000 crores.

3.30 The broad pattern of allocation of corporate mining and manufacturing investment by major industry groups is given in Table 3.9.

3.31 The inter-soctoral capital flows for the period 1980—85 are presented in Table 3.10.

Table 3.10 Inter-sectoral Capital Flows: 1980—85(Rs. crores at 1979-80 prices)

Sl. Item Public Sector Corporate &Cooperative Sector

House-holdSector

Total

(0) (1) (2) (3) (4) (5)1 Own Saving 34200 10588 104859* 1496472 Transfer from other

domestic sectors38871 8994 (—)47865

3 Inflow from rest of the world

10929 (—)1866 9063

4 Investment 84000 19582 55128 158710

*Details are given in Annexure 5.1.

Table 3.9 Distribution of Private Corporate Investment in Mining and Manufacturing(Rs. crores at 1979-80 prices)

Sl.No Industry Group Total(0) (1) (2)1 Mining 25@2 Metallurgical 12443 Engineering 24634 Chemicals 39205 Consumer Industries 53756 Miscellaneous 2155

total 15182

@ Excluding captive mining which is included under respective industries.Note : pigures include about Rs. 2000 crores in cooperative anufacturing sector.

3.32 Table 3.10 shows household savings of Rs. 104859 crores. These are used partly to finance the sector's investment in physical assets of Rs. 55128 crores; the rest are transferred to the public sector and the corporate and cooperative sectors. The latter sectors will have a total investment of Rs. 19582 crores financed by own savings and transfers from other domestic sectors, including the household sector.

SECTORAL GROWTH PROFILE

3.33 The experience of the recent past shows that a lack of coordination among critical sectors acts as a general drag on economic growth. Production capacities created after a massive investment effort remain under-utilised due to shortfalls in performance of a few sectors. It is, therefore, essential that the projected production profile should be internally consistent not only at the sectoral level, but also at the level of specific commodities/services. Commodity^wise demand-supply (material) balances presented below project the consistency of production targets of principal commodities/services with the targets of user-sectors. These balances are for the country as a whole. In taking operational decisions regarding production of the respective commodities and also for creation of additional capacities, inter-sector,al balances will need to be supplemented by inter-regional balances.

3.34 Physical targets of production for the principal commodities and services are presented in Table 3.11. Sectoral priorities have 'been built into the projected targets of demand and output of the principal commodities. These are discussed under the respective sectors.

Table 3.11 Commodity Output Projections : 1984-85

Sl.No Item Unit 1979-80 1984-85 (Projections)(0) (1) (2) (3) (4)1 Foodgrains. Milliontonnes 109 149 to 1542 Sugarcane Mllion tonnes 128 200 to2153 Jute and Mesta . Lakh bales 80-3 91-04 Cotton Lakhbaiss 77 925 Oilseeds (five major) Lakh tonnes 81 1106 Tea Mil lion Kgs. 550 7057 Coffee Million Kgs. 15000 159-458 Milk Million tonnes 30-27 389 Eggs Million Nos. 12320 1630010 Coal Million tonnes 103-96 165-00

11 Lignite Milliontonnes 3-12 8-0012 Crude Petroleum MH'ion tonnes 11- 77 21-613 Iron Ore and Concentrates Million tonnes 39 6014 Sugar Million tonnes 3-9 7-615 Vanaspati Thousand tonnes 626 90016 Cloth (mill and decentralised

sectors)Million metres 10435 13030

17 Jute Manufactures Thousand tonne 1336 1500 to 154018 Paper and Paper Board Thousand tonne 1050 150019 Newsprint Thousand tonnies 47-45 18020 L.D. Polyethylene Thousand tonniss 71-3 100-021 H.D. Polyethylenis Thou sand tonnes 25-4 27-022 Polyprophylene Thousand tonnes 13-4 27.023 P.V.C. Thousand tonnies 49-9 128-024 Natural Rubber Thousand tonnes 148-47 200-025 Synthetic Rubber (SBR and

PBR)Thousand tonnes 30-3 45

P; troleum Products (Including Lubricants)

Million tonnes 25-8 35-3

27 Sulphuric Acid Thousand tonnes 2131 360028 Caustic Soda Thousand tonnes 549-6 85029 Soda Ash . Thousand tonnes 555.8 85030 Ciproliictum Thousand tonnes 13-5 18-031 DMT Thousind tonnes 27-9 56-032 Nitrogenous Fertilisers (N) Thousand tonnes 2226 420033 Phosphatic Fertilisers

(Pz Os)Thousand tonnes 757 1400

34 Nylon Filament Yam Thousand tonnes 17-7 28-035 Poiyster Filament Yarn and

Staple Thousand tonnes 32-6 73-0

36 Cement Hill ion tonnes 17-68 34 to 34-537 Pig Iron for sale . Milliontonnes 1-09 1-5238 Saleable Steel (Plain carbon) Million tonnes 7.38 11.5139 Aluminium Thousand tonnes 192 30040 Copper Refined Thousand tonnes 18.8 45.041 Zinc Thousand tonnes 52.65 85.0042 Lead Thousand tonne! 5 11.4 25.043 Agricultural Tracta irs Thousand nos. 62.5 100.041 Michine Tools . Rs. Million 1633 250045 Hydro Turbines Million Kw 0.95 1.2046 Thernnl Turbines Million Kw 2.28 3.5047 Electric Transfomers Million KVA 18.7 35.048 Commercial Vehic Thousand nos. 57.4 105.049 Electricity General Billion KWH 112 19150 Railway Originating Traffic Million tonne 217.8 309

Agriculture

3.35 The gross cropped area in 1979-80 has been estimated at 168 million hectares with net sown area of 140 million hectares and 28 million hectares area sown more than once. Thus the cropping intensity in 1979-80 is estimated at 1.20. Based on land utilisation concept of irrigated areas, the gross irrigated area in 1979-80 has been estimated as 50.00 million hectares. During the Sixth Plan another 14 million hectares would be brought under irrigation. Thus the gross irrigated area in 1984-85 is likely to attain a level of 64.00 million hectares. The additional irrigation is likely to increase the area under short duration high yielding varieties and thus promote cropping intensity which is projected to go up from 1.20 in 1979-80 to 1.25 in 1984-85.

3.36 It has been assumed that the increase in gross cropped area in future 'years could be achieved through the creation of additional irrigation facilities. Several functional relationships between gross cropped area and gross irrigated area, as also between gross irrigated are,a and incremental area sown more than once, with and without time lags, were studied, based on'data for the period 1960-61 to 1978-79. On the basis of these studies, gross cropped area has been projected to increase to 179.74 million hectares in 1984-85. A substantial step-up in the creation of irrigation potential and its optimum utilisation is thus crucial for achieving the output targets for various crops in the Sixth Plan period.

3.37 In Ithe allocation of gross cropped area estimated for the terminal year of the Sixth Plan between different crops, lagging crop sectors, like pulses- and oilseeds^ havg been given greater importance. As a first approximation, gross cropped area has been allocated between different crops on the basis of trend growth r,ates of the percentage share of each crop in the gross cropped area. The area projected for each crop has again been allocated between different categories of land (HYV/Irrigated/ Unirrigated) on the basis of respective estimated trend growth rates. In view of the existing imbalances in the crop composition, trend projections of area for lagging crop sectors have been revised upwards. Policy instruments particularly with reference to land and water use, coupled with promotion of appropriate research on high yielding varieties and intensification of lab-to-field movement, are likely to help in inducing the acreage as well as yield shifts in favour of lagging crops sectors.

3.38 Per hectare yield rates as available from the reports of the crop cutting experiments of the National Sample Survey Organisation have been used in the case of foodgrains and cotton. For sugarcane, marginal improvement in all India yield rates over the peak-levels achieved so far is visualised in the estimation of output in 1984-85. In the case of jute .and mesta, improvement in yield rates as. warranted by past experience have been assumed. While selecting the estimates of average yields for food-grains, account was taken of the experience of early seventies when the average yields were relatively on the high side compared to their levels in the later years.

3.39 The projected output of m,ajor crops for the year 1984-85, estimated on the basis of above assumptions, are indicated in Table 3.12.

Table 3.12 Area Yield Level and Output of Principal Crops in 1984-85

Crop Land Category Area (Mill.Hee.),

Yield (Kg/Hec)

Production (Mill. Tonneis

(0) (1) (2) (3) (4)

Rice HYV Irrigated 19.89 2231 44.37Other Irrigated 0.80 1293 1.03Unirri gated 20.58 863 17.76

total 41-27 1524 63-16

Wheat HYV Irrigated 18.00 2101 37.82Other Irrigated 0.80 1290 1.03Unirrigated; 6.20 790 4.90

total 25-00 1750 43-75

Other Cereals Irrigated 6.00 1394 8.36Unirrigated 32.00 627 20.06

total 38.00 748 28.42

Pulses Irrigated 3.40 • •Unirrigated 23.40 •• ••

total 26.80 560 15-00

Total Foodgrains Irrigated 48.89

Unirrigated 82.18

to 131-07 1147 150.33

Sugarcane Irrigated 3.48

Unirrigatet 0.00

*3 3-48 57,500 2oo.io

Cotton Irrigated 4.10 310 74.76UnirrigateA 4.36 75 19.24

8.46 189 94-00

(lakh bales)

Jute & Mesta . Irrigated 0.06 , ,Unirrigated 1.28

1-34 I250 93-o6(lakh bales)

Other Crops Irrigated 7.47Unirrigated 27.92total 35-39

All Crops Irrigated 64.00Unirrigated 115.74total 179 -74

The foodgrains output is projected to grow by 6.5 per cent per annum using a base level figure of 109 million tonnes in 1979-80. However, using trend estimate for 1979-80 the growth rate works out to 3.2 iper cent as against a growth rate of 2.74 per cent observed during 1969-70 to 1978-79.

3.40 With the launching of the project 'Operation Flood II', the output of milk is to be substantially increased and is estimated at 38 million tonnes in 1984-85 as against an estimated level of 30.27 million tonnes in 1979-80. The increase implies an annual growth rate of 4.65 per cent. The growth rate for milk and milk products during the Plan period works out to 5.51 .per cent. In respect of other animal husbandry products, the Sixth Plan envisages a growth rate of 5.71 per cent.

3.41 The Sixth Plan provides for a growth rate of 4.50 per cent for the forestry sector and 6.60 per cent for the fisheries sector.

3.42 Taking the various components of the agricultural sector together, the overall rate of growth of gross value added in agriculture during the;

Sixth Plan is estimated to be 3.83 per cent per annum. Any projection of output in agriculture is •beset with uncertainty, largely due to fluctuations in weather. The output targets given above are based on the average yield levels already realised and may thus be regarded in the sense that the effects of possible further technological change have not been taken into account.

Sugar

Table 3.13 Supply-Demand Balance for Sugar : 1979-80 and 1984-85(Million Tonnes)

Sl.No Item 1979-80 1T984-85(0) (1) (2) (3)1 Domestic Demand 5.0 6.82 Exports 0-21 0-83 Total Demand 5.3 7.64 Production 3.9 7.65 Stock Depletion 1.46 Total Supply 5.3 7.6

Off take from the maills

Table 3.14 Supply-Demand Balance for Cotton Cloth and Yarn:1984-85

Sl.No. Item Cloth Production (Mill. Mts.)

Yam Requirement (Mill. Kgs.)

(0) (1) (2) (3)1 Cotton Cloth 8640 946

(i) Mill Sector 3300 412(ii) Decentralised Sector 5340 534

2 Blended & Mixed Fabrics produced in. the mill and decentralised sectors, of which cotton yarn part

2490 130

3 Yam for Hosiery and Export — 804 Total Demand — 11565 Total Production — 1156

3.43 Domestic demand for sugar would reach a level of 6.8 million tonnes by 1984-85. Given the potential of raising sugarcane output, it should be possible to raise sugar production from 3.9 million topnes in 1979-80 to 7.6 million tonnes by 1984-85. This projected level of production v/ould not only meet the demand of the domestic market, but may also enable our sugar exports to reach a level of 0.8 million tonnes by 1984-85. For this purpose, it will be necessary to mount a drive for better management of

ratoon crops and an integrated pricing policy so as to promote the use of cane for sugar, gur and khandsari production in a balanced manner.

Cotton Cloth and Yarn

3.44 Demand for cotton textiles as given by the consumption sub-model together with the cloth requirements for the projected exports of cotton fabrics indicates that the demand for cotton cloth, including pure art silk, blended and mixed fabrics, will rise to 13030 million metres by the end of the Plan period. With the indigenous availability of raw cotton at 92 lakh bales in 1984-85 and considering the relative consumer preferences, the share of pure cotton cloth in total textiles output v/ill be 8640 million metres the balance of 2490 million metres being blended .and Mixed fabrics .and 19,00 million metres of art silk fabrics. , The production of decentralised sector will increase to 5340 million metres 'in 1984-85. Cotton yarn requirements for this pattern of output will be 1156 million Kgs. Raw cotton requirements in 1984-85 have been estimated at 92 lakh bales.

7th Five Year Plan (Vol-1)Objectives

3.1 The guiding principles of Indian planning are provided by the basic objectives of growth, modernisation, self-reliance and social justice. Within this framework, each five-year plan involves some directional changes to take into account new constraints and new possibilities. The Seventh Plan, as stated in the Approach Paper approved by the National Development Council, seeks to emphasise policies and programmes which will accelerate the growth in foodgrains production, increase employment opportunities and raise productivity. At the present stage of development, these three more immediate objectives are central to the achievement of the long-term goals put forward in the development perspective outlined in the previous chapter.

Strategy

3.2 The central element in the development strategy of the Seventh Plan is the generation of productive employment. This will be achieved through increase in cropping intensity made possible by increased availability of irrigation facilities, extension of new agricultural technologies to low productivity regions and to small farmers, through measures to make the rural development programmes more effective in the creation of productive assets, through the expansion of labour intensive construction activities for providing housing, urban amenities, roads and rural infrastructure, through the expansion of primary education and basic health facilities and through changes in the pattern of industrial growth. With this emphasis on the generation of productive employment, the Seventh Plan aims at a significant reduction in the incidence of poverty and an improvement in the quality of life for the poor in the villages and towns. There is also a need to generate employment opportunities for educated youth in rural areas. The expansion of education and health facilities will open up job opportunities and the spread of credit institutions and other developmental activities will create opportunities for self-employment.

3.3 The increase in the spending power of poor households will lead to a more rapid expansion in the demand for mass consumption goods, most particularly foodgrains, clothing and shelter. The availability of these goods has to increase commensurately if inflation is to be avoided. Hence the Seventh Plan strategy requires that special attention be paid to increasing the production of foodgrains, edible oils, sugar, textiles, cooking fuel and other articles of mass consumption and rapid expansion in housing. In fact, a more rapid increase in the production of these goods would also reinforce the efforts to generate productive employment for the poor.

3.4 An increase in foodgrains production plays a particularly important role in the Seventh Plan. Any shortfall in foodgrains production will tend to reduce rural incomes and generate inflationary pressures

that will hurt the poor and erode public resources. These risks are greater with an employment-oriented development strategy. Hence an expanded food security system, based on rapid increases in foodgrains production, especially in the undeveloped regions, public procurement, buffer stocking, and public distribution is a key component of the Seventh Plan.

3.5 One of the major weaknesses that has emerged in the Indian economy is low productivity resulting from several factors which are interrelated. One major cause of low productivity is the inefficiency in the use of capital: the increases in output in several sectors have not been commensurate with the scale of investment undertaken. The Seventh Plan places particular-emphasis on obtaining more output out of assets that have been built up over the years. This emphasis on efficiency in the use of capital is doubly necessary at the present stage when the resources available for public investment are well short of requirements. It would obviously be an unsound policy to undertake investments in new capacity in order to cover shortfalls arising from the poor utilisation of existing investments. The cost of creating assets has often been raised in the past because of delays in implementation and insufficent attention paid to efficient management and to the adoption of cost effective methods. Improvements in capacity utilisation and efficient project implementation in all areas, especially in irrigation, power, transport and industry, are essential for achieving the basic objectives of the Seventh Plan and for putting the Indian economy on a high growth path.

3.6 Improvements in productivity and efficiency will help reduce the costs of capital intensive and resource intensive goods and services, most of which are intermediates used widely in all sectors of the economy. This reduction is essential for expanding the scale of the domestic market and for improving the international competitiveness of the Indian economy. Hence the Seventh Plan shifts the focus of planning for industry away from massive investments in new facilities to capacity and productivity enhancing improvements in existing facilities.

3.7 The emphasis on productivity and efficency is also linked to the balance of payments prospects confronting the country at present. The inflow of concessional assistance is shrinking and is already limited in relation to our requirements. Hence, the management of balance of payments in the Seventh Plan is critically dependent on a sizeable improvement in our earnings from exports and from invisibles. If export earnings are increased to a significantly higher level on a sustainable basis, not only will the management of the balance of payments be made easier but the scale of operations in the concerned sectors could be increased, thereby reaping economies of scale and reducing costs and prices which would, in turn, expand the domestic market. But a breakthrough in exports cannot be realised if the exports 'sector' is treated as a separate enclave distinct from the rest of the economic structure. Hence, the Seventh Plan postulates the integration of export policy with all policies and programmes that affect productivity and costs. In this context, special attention needs to be paid to the scale of operations and to the reform of the system of taxation of inputs with a view to reducing costs.

3.8 Efficiency and employment generation are closely linked with measures for human resource development. The attention paid to education and manpower development in the past plans has ensured the availability of a substantial infrastructure for education and technical training. Skill formation has also been provided for in various beneficiary-oriented programmes. The primary task now is qualitative improvements in curricula and teaching methods to ensure relevance and impart to students, workers and artisans the values, knowledge and the skills required for emerging developmental tasks. Besides this, human resource development also includes measures to improve health status and steps to improve the participation of vulnerable groups like scheduled castes, scheduled tribes, women and disabled persons in the development process. The development strategy for the Seveneth Plan involves an accelerated effort at human resource development in this wide sense.

3.9 Given the twin emphasis on employment and productivity in the Seventh Plan, the objective is to expand employment opportunities consistent with increases in productivity. The potential of direct employment generation in large scale industries and in much of the infras-tructural sectors is not high because these industries are fairly capital-intensive. However, expansion of industries creates a large volume of down stream employment through forward linkages. In particular, the expansion of small scale

and medium industries would add significantly to the growth of productive employment opportunities. Promotional measures designed to improve the access of this sector to modem technology, supply of inputs, credit and risk capital would help to enhance its productivity and competitiveness. Taking all these factors into account, the Seventh Plan provides for a faster industrial growth than during the Sixth Plan.

3.10 The implementation of the Seventh Plan will necessarily require the development and introduction of new technologies in several sectors of the economy. The plan envisages the implementation of a set of science and technology missions in which domestic technological capabilities would be fully developed to achieve well-defined goals. At the same time, in other areas, access to relevant foreign technologies will be improved alongwith emphasis on adequate absorption and development.

3.11 The Seventh Plan aims at extending the green revolution to new areas through its emphasis on raising the productivity of rice in the eastern region and in rainfed and dryland agriculture. This should lead to faster growth in agricultural output in areas which, in the national context, are economically backward. The special role of human resource development in the Seventh Plan strategy will also help correct regional imbalances in social development. These elements in the Seventh Plan strategy aiongwith existing programmes and policies on resource transfers, location of industries, area development and provision of minimum needs would reduce regional imbalances in economic and social development.

3.12 The induction of new technologies and the pursuit of economic growth should not be at the expense of the environment. In the long run, environmentally sound policies are also developmentally sound ones. Hence, environmental protection is an important component of the development strategy of the Seventh Plan. This Plan includes several new initiatives in pursuit of this objective. In this context, a special mention ought to be made of a major new inter-disciplinary programme for the control and prevention of pollution of the river Ganga.

3.13 The Seventh Plan can be implemented successfully only with the involvement of the people. The Plan proposes to do this through effective steps for the decentralisation of planning and development administration as well as by increasing the involvement of voluntary agencies in the implementation of plan programmes, particularly in the rural areas.

3.14 The supplementary contribution which voluntary agencies could make to the overall development of rural areas and the role they can play in the implementation of various anti-poverty and Minimum Needs Programme have not been fully appreciated. By virtue of the type and scope of work they do, voluntary agencies, as a rule, are unorganised. That is their basic strength as well as weakness. It has been generally accepted that Government by itself cannot reach all the families living below the poverty line. Besides, alternative methods and approaches to the problems of rural and urban development and of poverty alleviation as tested in the voluntary sector contain lessons which can be usefully learnt. Voluntary agencies have been traditionally working in the areas of relief and rehabilitation, education, health and social welfare. But they can also play a useful role in supplementing Government's efforts in other areas such as the provision of drinking water, release and rehabilitation of bonded labour, ground water surveys, development of alternative sources of energy and many other activities relating to rural development and poverty alleviation. Several voluntary agencies have acquired, over the years, professionalism and expertise to provide competent technical services and yet the services of voluntary agencies have not been fully exploited by governmental agencies for the implementation of programmes of welfare and poverty alleviation. This is partly because there is no institutional forum where voluntary agencies and Government can come together. Such forums need to be established. They will provide lines of communication between the official sector and the voluntary sector; also they will enable smaller village-based groups to receive funds from the Government and the Government, in its turn, would be able to obtain valuable information on the progress and problems of different development programmes.

3.15 To sum up, the development strategy of the Seventh Plan aims at a direct attack on the problems of poverty, unemployment and regional imbalances. It requires for its success substantial improvements and economy in resource use. These improvements will be achieved through the accelerated development of

human resources, greater selectivity in the development and use of domestic technological capabilities, the widespread induction of new technologies in our farms, factories and offices, stronger emphasis on capacity utilisation and better project implementation and the pursuit of policies that would cut down costs of production particularly in the industrial sector.

Macro Dimensions

3.16 The development strategy outlined in the previous section has been spelt out in quantitative terms, taking into account demographic factors, the constraints imposed by the availability of domestic and foreign resources, linkages between different sectors of the economy, the impact of redistributive policies, and the effects of improvements in efficiency and changes in technology.

3.17 The growth rate of gross domestic product (at factor cost) is expected to be 5 per cent over the Seventh Plan period. This rate is in line with the growth rate achieved in the Sixth Plan and a little higher than the average for the past decade. It may also be noted that the Seventh Plan is aiming at 5 per cent growth rate on a base year, 1984-85, which by an large, was normal, unlike the Sixth Plan, for which national income in the base year, 1979-80, was well below normal.

3.18 The sectoral growth pattern expected over the Seventh Plan is presented in Table 3.1 which gives growth rates of the value of output (which includes material input costs) and of value added. The growth rate of agricultural output is expected to be around 4 per cent. This is consistent with the growth in consumption brought about by income growth and by emphasis on the removal of poverty and unemployment. The output of minerals and industrial goods is expected to increase at an annual rate of nearly 8.3 per cent, of electricity, gas and water supply at 12 per cent and of transport services at 8 per cent. Thus the Seventh Plan envisages a significant acceleration in the growth of industry and infrastructure.

TABLE 3.1Projected Sectoral Growth Rates of Value of Gross Output and Gross

Value Added at Factor Cost 1989-90/1984-85(Per cent per annum)

Sl. No Sector Gross Value added Value of gross output1, Agriculture 2.5 4.02. Mining and manufacturing 6.8 8.3

(a) Mining 11.7 13.0(b) Manufacturing: 5.5 8.0(i) Food products 3.2 6.4(ii) Textiles 2.8 5.0(iii) Wood and paper products 5.3 8.5(iv) Leather and rubber products 2.9 4.3

(v) Chemical products 6.7 9.5(vi) Coal and petroleum products 4.8 6.2(vii) Non-metallic mineral products 3.1 5.6(viii) Basic metals 5.5 8.1(ix) Non-electrical engineering products 8.2 11.8

(x) Electrical engineering products 9.5 12.5(xi) Transport equipment 8.2 10.8(xii) Misc. industries 8.7 9.8

3. Electricity, gas and water supply 7.9 12.0

4. Construction 4.8 4.85. Transport 7.1 8.06. Services 6.1 6.6 Total 5.0 6.6

3.19 The pattern of sectoral growth envisaged will help maintain the pace of structural transformation. The composition of national income in 1984-85 and 1989-90 is given in Table 3.2. Agriculture and related sectors are expected to contribute 33 per cent of GDP in 1989-90 while the shares of mining, manufacturing, construction, electricity and transport will be 34.4 per cent. Thus, by the end of the Seventh Plan, the contributions of the agricultural sector, the industrial sector and the services sector will, in terms of income generated, be of roughly equal proportions, i.e., about one third each.

TABLE 3.2

Sectoral Composition of Gross Value Added 1984-85 and 1989-90(Per cent)

Sl. No Sector 1984-85 1989-901. Agriculture 36.86 32.682. Mining and manufacturing: 18.13 19.76 (a) Mining 3.47 4.73 (b) Manufacturing 14.66 15.03 (i) Food products 1.67 1.53 (ii) Textiles 2.52 2.27 (iii) Wood and paper products 1.05 1.06 (iv) Leather and rubber products 0.39 0.36 (v) Chemical products 1.99 2.16

(vi) Coal and petroleum products 0.72 0.71(vii) Non-metallic mineral products 0.80 0.73(viii) Basic metals 2.04 2.09(ix) Non-eletrical engineering products 0.98 1.15

(x) Electrical engineering products 0,77 0.95(xi) Transport equipment 0.82 0.95(xii) Misc. industries 0.91 1.07

3. Electricity, gas and water supply 2.00 2.294. Construction 6.21 6.165. Transport 5.60 6.196. Services 31.20 32.92

Total 100.00 100.00

3.20 The rate and pattern of growth envisaged for the Seventh Plan will require a total investment of Rs. 322,366 crores of which 94 per cent will be financed from domestic resources. Macro economic aggregates for the base and terminal years of the Plan are given in Table 3.3. The rate of domestic savings is expected to go up from 23.3 per cent of GDP in 1984-85 to 24.5 per cent in 1989-90 which implies a marginal savings rate of 28.4 per cent. A more detailed analysis of the assumptions underlying the projection is given in the Chapter on Financing the Plan.

TABLE 3.3: Macro-Economic Aggregates(Rs. crores at 1984-85 prices)

1984-85 1989-90GDP at factor cost 1,93,428 2,46,881Indirect taxes less subsidies 24,334 35,064GDP at market prices 2,17,762 2,81,945Net factor income from abroad (-)681 (-)500Other current transfers 2,799 3,000Disposable income 2,19,880 2,84,445Gross domestic savings 50,738 68,997Consumption exp. total 1,69,142 2,15,448Private 1,46,308 1,85,285Public 22,834 30,163Gross domestic capital formation 53,388 72,997Foreign savings 2,600 4,000Rate of domestic savings 23.3 24.5Rate of investment 24.5 25.9Marginal rate of savings 28.4

3.21 The rate of gross investment would rise from 24.5 per cent of GDP in 1984-85 to 25.9 per cent in 1989-90. The incremental capital output ratio (ICOR), which relates the increase in GDP at market prices to trie total investment over the Plan period, is expected to be around 5 in the Seventh Plan. This is a little higher than the ICOR realised in the Sixth Plan but lower than the trend value of 5.5. The lower value is expected to be realised because of the emphasis on efficiency which is a crucial part of the Seventh Plan Strategy.

3.22 The Plan outlay in the public sector will be Rs. 180,000 crores which includes current development outlays of Rs. 25,782 crores and gross investment of Rs. 154,218 crores. The figures show a marked increase in the allocations for infrastructure and human resource development since these are crucial for the growth in productivity. The share of the public sector in total investment over the Plan period will be 48 per cent. The private corporate sector will account for 17 per cent and unincorporated enterprises and households for 35 per cent of the total investment.

Sectoral Allocation of Public Sector Outlay

3.23 Tables 3.4(a), 3.4(b) and 3.4.(c) give the sectoral allocation of public sector outlays during the Seventh Plan. It will be seen that the largest shares in allocation go to the energy sector (30.45 per cent), agriculture including rural development, special area programmes and irrigation (22.09 per cent) and social services (16.31 per cent), which together account for over two-thirds (68.85 per cent) of total public sector outlay. Thus the plan is heavily oriented towards power, agricultural and rural development, and social services and human resource development.

TABLE 3.4(a)Public Sector Outlays—Seventh Plan

Sl. No. Heads of Development Total Centre States UTs1 2 3 4 5 6I. Agriculture 10573.62 4056.71 6248.40 268.51

(5.87) (4.25) (7.74) (7.13)II. Rural Development 9074.22 4901.59 4142.84 29.79 (5.04) (5.13) (5.13) (0.79)III. Special area programmes 3144.69 — 3144.69 — (1.75) (3.90)IV. Irrigation and flood control 16978.65 834.93 15949.77 193.95

(9.43) (0.87) (19.77) (5.15)V. Energy 54821.26 31492.14 22786.15 542.97

(30.45) (32.96) (28.24) (14.41)VI. Industry and minerals 22460.83 18552.97 3785.88 121.98

(12.48) (19.42) (4.69) (3.24)VII. Transport 22971.02 16459.37 5772.50 739.15 (12.76) (17.23) (7.15) (19.61)VIII. Communication,

informationand broadcasting 6472.46 6365.82 99.33 7.31

(3.60) (6.66) (0.12) (0.19)IX. Science and technology 2466.00 2303.43 157.28 5.29

(1.37) (2.41) (0.20) (0.14)X. Social services 29350.46 10350.90 17182.88 1816.68

(16.31) (10.84) (21.29) (48.21)XI. Others 1686.79 216.14 1428.28 42.37

(0.94) (0.23) (1.77) (1.13)Grand Total 180000.00 95534.00 80698.00 3768.00

(Figures in brackets are percentages of column totals).

TABLE 3.4(b)Sector-wise Allocations for the Seventh Plan 1985-90

(Rs. crores)

Sl. No. Heads of Development Seventh Plan outlayTotal Centre States UTs

1 2 3 4 5 6I. Agriculture 10,573.62 4,056.71 6,248.40 268.51

Agricultural research and education 704.60 425.00 277.17 2.43Crop husbandry 3,311.80 1,305.00 1,948.44 58.36Soil and water conservation 740.39 110.00 597.30 33.09Animal husbandry and dairying 1,076.68 410.00 622.64 44.04Fisheries 499.19 170.00 305.42 23.77Forestry and wild life 1,859.10 446.71 1340.08 72.31Management of natural disasters 21.10 10.00 11.10 —Agricultural marketing and rural godowns

149.44 60.00 86.44 3.00

Food, storage and warehousing, food processing

307.08 275.00 31.07 1,01

Investment in agricultural financial institutions

353.66 195.00 158.56 0.10

Cooperation 1,400.58 500.00 870.18 30.40Plantation 150.00 150.00 — —

II. Rural Development 9,074.22 4,901.59 4,142.84 29.79Integrated rural development and related programmes

3,473.99 1,864.38 1,609.61

National rural employment programme

2,487.47 1,250.81 1,236.66

Community development and panchayat institutions

416.15 396.30 19.85

Special employment programmes 509.24 509,24 Rural landless employment guarantee scheme

1,743.78 1,743.78

Land reforms 395.83 36.71 353.88 5.24Integrated rural energy programmes 47.76 5.91 37.15. 4.70

III. Special Area Programmes 3,144.69 .. 3,144.69 ..Hill areas 753.50 753.50 Border area dev. programme 200.00 200.00 Western Ghat development programme

116.50 116.50

Development of backward areas 585.69 585.69 Tribal areas 756.00 756.00

Northern Eastern Council 675.00 675.00 Other area development

programmes.58.00 58.00

IV. Irrigation and Flood Control 16,978.65 834.93 15,949.77 193.95 Major and medium irrigation 11,555.56 50.00 11,445.96 59.60

Minor irrigation 2,804.99 135.00 2,615.52 54.47 Command area development 1,670.71 500.00 1,161,91 8.80

Flood control including anti-sea erosion

947.39 149.93 726.38 71.08

V. Energy 54,821.26 31,492.14 22,786.15 542.97 Power 34,273.46 11,051.54 22,686.76 535.16 New and renewable sources of

energy519.55 412.35 99.39 7.81

Petroleum 12,627.67 12,627.67 Coal 7,400.58 7,400.58 VI. Industry and Minerals 22,460.83 18,552.97 3,785.88 121.98

Village and small scale industry 2,752.74 1,284.84 1,378.52 89.38Large and medium industry 19,708.09 17,268.13 2407.361 32.602

VII. Transport 22,971.02 16,459.37 5,772.50 739.15Railways 12,334.55 12,334.30 0.253

Roads 5,200.04 1,019.75 3,666.98 513.314

Road transport 1,990.10 230.92 1744.735 41.456

Ports and light houses 1,260.42 1.134.79 97.31 28.32 Shipping 826.88 693.42 7.00 126.46 Inland water transport 225.73 155.00 67,20 3.53

Civil aviation 757.84 730.21 24.72 2.91 Tourism 326.16 138.68 164.31 23.17 Farakka Barrage 49.30 49.30 VIII. Communication, Information

and broadcasting6,472.46 6,365.82 99.33 7.31

Posts 295.00 295.00 Telecommunications 4,538.74 4,530.00 8.497 0.258

Broadcasting 700.00 700.00 Doordarshan 700.00 700.00

Information and publicity 127.90 30.00 90.84 7.06 Films 41.51 41.51 INSAT—space segment 69.31 69.31 IX. Science and technology 2,466.00 2,303.43 157.28 5.29

Atomic energy. 315.00 315.00 Scientific research including INSAT—space segment

543.09 458.43 81.57 3.09

Scientific and industrial research

355.00 355.00

Environment and ecology/prevention and control of air and water pollution and Ganga action plan ..

427.91 350.00 75.71 2.20

Ocean development 100.00 100.00 Space 700.00 700.00 Forensic science labs. and Police wireless

25.00 25.00

X. Social Services 29,350.46 10,350.90 17,182.88 1,816.68Education, culture and sports 6,382.65 2,388.64 3,488.71 505.30Health including medical 3,392.89 897.34 2,240.33 255.22Family welfare 3,256.26 3,256.26 Housing and urban development

4,259.50 457.88 3,281.099 520.5310

Water supply and sanitation 6,522.47 1,236.83 4,848.06 437.58Welfare of scheduled castes, scheduled tribes and other backward classes

1,520.43 281.22 1,219.21 20.00

Special Central additive for scheduled castes component plans

930.00 930.00

Social and women's welfare 1,012.36 799.97 191.87 20.52Nutrition 1,740.18 7.32 1,693.86 39.00Labour and labour welfare 333.72 95.44 219.75 18.53

XI. Others 1,686.79 216.14 1,428.28 42.3"Statistics 93.02 40.78 48.24 4.00Rehabilitation of displaced persons

146.13 146.03 0.10"

Planning machinery 75.50 8.16 64.54 2.80

District planning 627.06 — 622.31 4.75stationery and printing 62.08 6.00 50.08 6.00Public works 568.82 549.92 18.90Training for development 16.81 4.93 8.98 2.90Public distribution system 46.51 2.50 41.21 2.80Official language—Hindi 2.00 2.00 Others 1.12 — 1.0012 0.1213

Unallocated 47.74 5.74 42.00 Grand Total 1,80,000.00 95,534.00 80,698.00 3,768.00

1. Includes Rs. 9.59 crores for weights and measures.2. Includes Rs. 1.51 crores for weights and measures.3. For Konkan Railway.4. Includes Rs. 0.15 crore for ropeway.5. Includes Rs. 0.75 crore for inter-model transport studies and Rs. 1.50 crores for City Bus

Terminals and Parking.6. Includes Rs. 0.80 crore for inter-model transport study and Rs. 0.35 crore for motor vehicle wing.7. For modernisation of wireless equipments in Gujarat.8. For Radio-telephone link in Lakshadweep.9. Includes Rs. 231.08 crores for State Capital Projects.10. Includes Rs. 63.50 crores for State Capital Projects.11. For rehabilitation in A & N Islands.12. Includes Rs. 0.80 crore for National Small Savings and Rs. 0.20 crore for Parliamentary Affairs.13. Includes Rs. 0.05 crore for Small Savings Schemes and Rs. 0.07 crore for strengthening of

Accounts and Goa Gazetteers.

TABLE 3.4 (C) State- wise/Sector-wise allocations for the Seventh Plan 1985-90.(Rs. crores)

States \ Heads of Union "Develop-ment Territories"

Agricul-ture

Rural Develo-pment

Special Area Progra-mmes

Irrig-ation & Flood Control

Energy Industry & Minerals

Trans-port

Communi-cation, Informa-tion & Broad-casting

Science & Techno-logy

Social Services

Others Total

1 2 3 4 5 6 7 8 9 10 11 12 13A. States 1. Andhra Pradesh

278.80

272.00

1488.10

1105.90

312.90 272.70

12.60 10.30 1385.90

60.80 5200.00

2. Assam

305.75

128.50

10.10 334.00 486.50 103.10 166.20

2.50 5.00 498.25 60.10 2100.00

3. Bihar 278.15

458.05

4.50 1724.00

1083.00

216.60 403.10

2.00 4.60 861.85 64.15 5100.00

4. Gujarat

386.40

135.49

1676.31

1447,50

259.67 377.40

16.07 8.00 1432.39

260.77

6000.00

5. Hary-ana

277.34

47.52 15.10 594.61 1012.75

56.55 201.32

4.80 17.34 549.71 122.96

2900.00

6. Hima-chal Pradesh

231.62

36.54 74.50 263.61 26.57 172.50

1.00 1.25 213.64 28.77 1050.00

7. Jammu & Kashmir

156.25

42.12 95.90 120.36 279.32 72.75 160.70

2.03 2.00 449.07 19.50 1400.00

8. Karna-taka

300.00

184.00

725.00 801.00 247.00 250.00

7.00 4.00 852.00 130.00

3500.00

9. Kerala 316.75

124.50

5.50 384.00 398.80 208.00 182.50

4.50 21.40 406.75 47.30 2100.00

10. Mad-hya Pradesh

434.43

305.87

1976.48

2660.00

165.04 353.38

3.24 23.34 1070.61

7.61 7000.00

11. Mahar-ashtra

655.61

680.49

320.49

1890.61

3053.04

365.00 779.69

7.60 4.00 2656.47

87.00 10500.00

12. Manipur

56.60 19.35 78.00 36.42 24.30 72.50 1.00 2.50 120.87 18.46 430.00

13. Megh-alaya

74.95 12.08 10.00 11.60 71.50 19.35 83.50 0.60 1.70 122.12 32.60 440.00

14. Naga-land

73.00 19.80 8.00 15.00 33.80 28.20 102.50

3.50 0.85 100.20 15.15 400.00

15. Orissa

239.55

202.65

696.00 788.50 140.35 193.50

3.00 4.00 386.80 45.65 2700.00

16. Punjab

325.98

65.99 21.10 370.00 1639.60

123.31 184.20

3.25 5.00 520.56 26.01 3285.00

17. Rajas-than

180.86

146.77

797.15 879.72 190.69 139.84

1.60 8.40 630.06 24.91 3000.00

18. Sikkim

48.50 3.97 16.05 34.94 8.72 46.68 0.47 0.80 62.96 6.91 230.00

19. Tamil Nadu

422.10

288,20

330.00 2010.00

285.00 282.00

3.00 8.70 2072.65

48.35 5750.00

20. Tripura

73.80 29.95 48.00 48.00 16.25 53.00 1.27 2.50 161.04 6.19 440.00

21. Uttar Pradesh

786,96

604.25

26.00 2200.00

3403.00

600.53 1077.99

12.50 15.00 1678.33

42.44 10447.00

22. West Bengal

345.00

334.75

69.00 400.00 1249.25

316.00 217.30

5.80 6.60 950.65 230.65

4125.00

23. Special Area Progran funded)

2559.00

2559.001

24. 42.00 42.00

Unall-ocatedTOTALA. STATES

6248.40

4142.84

3144.69

15949.77

!2786.15

3785.88

5772.50

99.33 157.28

17182.88

1428.28

80698.00

6. Union Terror-itories

1. A & N Islands

26.06 0.55' 2.70 25.02 2.06 176.52

0.65 0.37 45.04 6.03 285.00

2. Arun-achal Pradesh

84.10 7.95 26.00 36.90 9.75 127.55

0.50 0.20 104.45 2.60 400.00

3. Chandi-garh

4.98 1.27 0.60 28.58 2.27 10.55 0.40 0.20 154.13 0.02 203.00

4. Dadra& NagarHaveli

9.71 0.89 6.38 3.22 1.49 8.61 0.15 0.24 14.40 1.08 46.17

5. Delhi 25.13 4.66 69.27 368.55 63.60 270.75

2.33 1.78 1187.35

6.58 2000.00

6. Goa, Daman& Diu

33.37 3.99 70.45 36.25 15.60 54.89 1.10 1.55 134.19 8.61 360.00

7. Lakshad-weep

12.00 1.86 1.00 4.00 1.52 9.20 0.88 0.25 12.38 0.74 43.83

8. Mizo-ram

50.40 3.70 8.50 28.20 13.35 59.55 0.70 0.20 81.70 13.70 260.00

9. Pondic-herry

22.76 4.92 9.05 12.25 12.34 21.53 0.60 0.50 83.04 3.01 170.00

Total—B. UNION

TERRITORIES

268.51

29.79 193.95 542.97 121.98 739.15

7.31 5.29 1816.68

42.37 3768.00

(1) Includes provision for Central funding of Special Area Development Programmes for:

(Rs. crores)

(a) Hill Areas 753.50(b) Border Area Dev. Programme 200.00(c) Western Ghat Dev. Programme 116.50(d) Tribal Areas 756.00(e) North Eastern Council 675.00*(f) Other Area Development Programmes 58.00Total 2559.00

* Includes LIC loan of Rs. 100 crores State-wise/Sector-wise break-up of schemes under these programmes will be firmed up on receipt of specific proposals from the States.

3.24 The pattern of public investment taken together with private investment is designed to sustain the rate of growth of 5 per cent per annum. In allocating investible funds in the public sector, in view of the resource constraint, areas where the rates of return are higher or the needs of additional capacity are more immediate have been given preference over new projects which will yield output only after the Seventh Plan. Another major consideration has been to lay stress on increases in productivity of the existing capital stock through investment in replacements, balancing equipment and modernisation. Finally, an attempt has been made to ensure balance among the infrastructure sectors, the rest of the production sectors and the sector of human resources development including poverty alleviation programmes. It is, however, recognised that in order to sustain the growth momentum in the Eighth Plan, it may be necessary to make additional allocations for new projects in sectors such as power, coal and railways. It may also be necessary to make some additional allocations for roads of national importance, civil aviation, agricultural research and storage facilities. Depending on the progess of the economy, decisions in these matters could be taken at the time of annual plan reviews and the mid-term appraisal of the Seventh Plan.

3.25 The distribution of investments by broad sector of economic activity is given in Table 3.4(d). The share of agriculture, irrigation and allied sectors in total investment will be 19.1 per cent, of mining and manufacturing 32.5 per cent, of electricity, transport and communication 24.2 per cent and of services 24.2 per cent. Almost the entire investment in electricity, railways and communication, 45 per cent of the investment in agriculture, irrigation and allied sectors and 41 per cent of the investment in mining and manufacturing will be in the public sector. This investment allocation has been computed by using sectoral capital output ratios estimated on the basis of past data and information on recent trends.

3.26 The balance of payments prospects for the Seventh Plan are discussed in greater detail in a later chapter. A summary of the broad parameters is given in Table 3.5. At 1984-85 prices, imports are expected to grow at 5.8 per cent and exports at 6.8 per cent. Allowing for net earnings from invisibles, the current account deficit is expected to be Rs. 20,000 crores which will have to be financed by the inflow of aid and other borrowings. These projections include a provision for contingency imports and allow for a small increase in reserves.

TABLE 3.5Balance of Payments(Rs. thousands crores)

Sl.No. Item

Seventh Plan 1985-90 (at 1984-85 prices)

1. Exports 60.72. Imports 95.43. Balance of trade —34.74. Invisibles (net) 14.75. Balance on current account —20.06. Net aid and other borrowing 20.97. Use of foreign exchange reserves —0.28. Loss from decline in the import purchasing power of exports

—0.7

9. Current account deficit as per cent of GDP 1.57

TABLE 3.4 (d)

Gross Investment and Incremental Gross Domestic Product by Public Sector,Private Sector and total Economy (1985-90)

(Rs. crores at 1984-85 prices)

Sl No. Sector Gross Investment Incremental GDP (Factor Cost)Public Private Total Public Private Total

1 2 3 4 5 6 7 81. Agriculture and allied 27,574 34,048 61,622 875 8,512 9,3872. Mining, quarrying and

manufacturing42,455 62,172 1,04,627 6,641 7,065 13,706

3. Electricity 32,149 419 32,568 1,696 91 1,7874. Railways 12,334 12,334 726 — 7265. Other Transport 8,871 18,015 26,886 1,309 2,402 3,7116. Communication 6,355 6,355 824 8247. Other services 24,480 53,894 77,974 10,050 13,262 23,312 Total 1,54,218 1,68,148 3,22,366 22,121 31,332 53,453

Impact on Poverty and Unemployment

3.27 There is now evidence to suggest that the process of economic growth and the anti-poverty programmes have made a significant dent in the problem of poverty. Estimates of the incidence of poverty based on the provisional results of the latest National Sample Survey have been presented in the first Chapter. In the light of this information one can conclude that around 36 million people crossed the poverty line between 1977-78 and 1983-84.

The concepts and methods used will be explained in the Technical Note to the Seventh Five Year Plan.

3.28 The development strategy of the Seventh Plan and the pattern of growth emerging from it are expected to lead to a reduction of poverty at an even faster rate. The impact of economic growth and plan programmes on the incidence of poverty is presented in Table 3.6. The percentage of population with a consumption standard below the poverty line is expected to come down from an estimated 36.9 per cent in 1984-85 to 25.8 per cent in 1989-90. In absolute terms, the number of poor persons is expected to fall from 273 million in 1984-85 to 211 million in 1989-90, the bulk of this improvement being in the rural areas. The expected decline in the poverty ratio is the combined result of the contemplated growth pattern and more effective implementation of various poverty alleviation programmes. At present the National Rural Employment Programme (NREP), the Integrated Rural Development Programme (IRDP) and Rural Landless Employment Guarantee Programme (RLEGP) constitute the major elements of the anti-poverty programmes. It is, however, necessary to emphasise that these anti-poverty programmes cannot by themselves be expected to remove poverty on a sustainable basis. It is only in the framework of an expanding economy and dynamic agricultural sector that we can hope to make a lasting impact on the problems of poverty and under-development. The various anti-poverty programmes are designed to supplement and strengthen the favourable impact of faster agricultural growth on the level of living of the rural poor. A major task ahead is to integrate various beneficiaryoriented programmes, sectoral programmes and area development schemes into a consistent design of comprehensive development of each district/block taking into account its specific resource endowment needs and development potential.

3.29 The impact of the proposed pattern of growth on employment is given in Table 3.7. The employment potential generated by the targeted levels of economic activity is calculated in terms of man-days of work and then expressed in terms of standard person years, each of which is equal to 273 man days of work at the rate of 8 hours a day. Over the Seventh Plan, employment potential is expected to increase by 40 million standard person years against an increase in labour force of around 39 million persons.

Employment potential will grow at 4 per cent per year, as compared to the expected growth rate of 2.6 per cent per year in the labour force.

TABLE 3.7Employment Profile of the Seventh Plan

(Million standard person years)

Sector Estimated employment in 1984-85

Projected employment in 1989-90

Increase in employment in Seventh Plan

1 Agriculture 96.108 114.092 17.984(a) Crop sector 58.750 65.720 6.970(b) Non-crop sector 37.358 48.372 11.0142 Mining and quarrying 1.153 1.494 0.3413 Manufacturing 26.790 33.466 6.6764 Construction 10.427 12.624 2.1975 Electricity 1.031 1.498 0.4676 Railways 1.544 1.688 0.1447 Other transport 9.440 11.810 2.3708 Communications 0.951 1.224 0.2739 Other services 39.261 49.165 9.904Total 186.705 227.061 40.356

Table 3.6Impact on Poverty

Sl. Year No. Poverty Ratio (Percent) No. of poor (million)Rural Urban Total Rural Urban Total

0 1 2 3 4 5 6 71. 1977-78*2. 1984-85**3. 1989-90

51.2 39.9 28.2

38.2 27.719.3

48.3 36.9 25.8

253.1 222.2 168.6

53.750.542.2

306.8 272.7 210.8

Estimated on the basis of NSS 32nd Round Consumer Expenditure Distribution (1977-78). On the basis of NSS Consumer Expenditure Distribution 38th Round (Provisional) 1983.

3.30 The bulk of the growth in employment potential is in the agricultural sector, and within the sector, in subsidiary activities other than crop production. The annual growth rate of employment potential in this sector is 3.5 per cent which is significantly higher than the growth rate of the rural labour force which is expected to be around 2 per cent. Thus the Seventh Plan would provide fuller employment in rural areas. In the non-agricultural sector employment potential is expected to increase at nearly 4.5 per cent per year which should lead to some shift in labour force out of agriculture into non-agricultural activities.

3.31 The employment strategy underlying these projections is described in a later chapter. In essence the strategy is based on the premise that even with a high rate of industrial growth, the excess rural population cannot be fully absorbed in the organised industrial sector and additional employment has to be generated in rural areas through intensification of agriculture and village and rural industries, diversification of rural economic activity and a large programme of construction and capital formation. The employment projections of the Seventh Plan reflect this orientation of development strategy.

3.32 The Seventh Plan also envisages the continuance and expansion of the National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP) which were started in the Sixth Plan. These Programmes are expected to generate 2,458 million mandays of additional employment (9.04 million standard person years) in rural areas. They are particularly important in providing additional incomes to landless labour households who lack a resource base in the form of land. Depending on the food situation in the country and the position of food stocks with the public sector agencies, the employment promotion programmes could be expanded at a faster rate than is indicated by the current provision of outlays in the Seventh Plan.

3.33 While the great majority of the poor people are to be found in rural areas, one has also to take note of the growing incidence of poverty in urban areas. The persistent migration from the rural hinterlands has led to rapid growth of slums in many of our cities and towns. It has also led to considerable amount of overcrowding in relatively unskilled and low paid jobs in the informal sector. The programmes of urban development included in the Seventh Plan lay considerable emphasis on improvement in the living conditions of slum dwellers. However, to be effective, the problem of urban poverty requires a multi-pronged strategy designed, among others to:

a. provide gainful employment to the unemployed, particularly women and youth,b. raise the earnings of those already employed in low paid jobs,c. step up the productivity and earnings of those who are self-employed workers, andd. improve the access of the urban poor to basic amenities like education, health care, sanitation

and safe drinking water.

To this end, it is proposed to take up a few pilot projects in selected urban areas. These pilot projects will help identify the type of programmes and support mechanisms (training, extension, credit, marketing and infrastructure) which could make a significant dent on the problem of urban poverty. Wherever possible, the assistance of voluntary agencies will be enlisted for the implementation of these projects.

3.34 The impact of the Seventh Plan on poverty and unemployment will bring about an important qualitative change in the economy. At present the top 30 per cent of the population accounts for over half of the consumer expenditure both in rural and urban areas and for the bulk of the demand for manufactured consumer goods. By the end of the Seventh Plan, with the expected decline in the proportion of the population below the poverty line and with the reduction in the backlog of unemployment, there will be a significant increase in the demand for food articles and for many manufactured consumer goods and services. This increase in the size of the domestic market can provide a base for rapid industrial advance, which in turn will further accelerate the growth in employment. Hence the Seventh Plan strategy which focuses attention on employment generation and poverty reduction will also help strengthen growth impulses in the economy.

1st Five Year Plan

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