Brief Approach to Five Year's Plans

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1st

Plan (1951-56) The first five year plan was presented by Jawaharlal Nehru in 1951.

It gave importance to agriculture, irrigation and power projects todecrease the countries reliance on food grain imports, resolve the foodcrisis and ease the raw material problem especially in jute and cotton.

Nearly 45% of the resources were designated for agriculture, whileindustry got a modest 4.9%. The focus was to maximize the output fromagriculture, which would then provide the impetus for industrial growth.

Though the first plan was formulated hurriedly, it succeeded in fulfilling

the targets. Agriculture production increased dramatically, nationalincome went up by 18%, per capita income by 11% and per capitaconsumption by 9%.



The second five year plan was initiated in a climate of economicprosperity, industry gained in prominence.

Agriculture programmes were formulated to meet the raw materialneeds of industry, besides covering the food needs of the increasingpopulation.

The Industrial Policy of 1956 was socialistic in nature. The plan

aimed at 25% increase in national income.

During the second five year plan India, 5 steel plants in Jamshedpur,Durgapur, and Bhilai had been established, apart from a hydro-electric power project which was also undertaken and implemented.

Target Growth: 4.5% Actual Growth: 4.27%

In comparison to First Five Year plan, the Second Five Year Plan wasa moderate success. Unfavorable monsoon in 1957-58 and 1959-60impacted agricultural production and also the Suez crisis eruptedbecause of circumstances surrounding the ownership of the SuezCanal blocked International Trading increased the commodity prices.



Emphasis was on becoming self reliant in agriculture and industry.

The objective of import substitution was introduced. In order toprevent monopolies and to promote economic developments inbackward areas, unfeasible manufacturing units were augmentedwith subsidies.

The plan aimed to increase national income by 30% and agricultureproduction by 30%.

The wars with China in 1962 and Pakistan 1965 and bad monsoon in

almost all the years, leads actual performance of the plan away fromthe target.

The target growth rate of GDP (gross domestic product) was 5.6percent. The achieved growth rate was 2.84 percent.



At the time of initiating the fourth plan it was realized that GDPgrowth and rapid growth of capital accumulation alone would nothelp improve standard of living or to become economically self-reliant.

Importance was given to providing benefits to the marginalized

section of the society through employment and education.

Disbursement to agricultural sector was increased to 23.3% .Familyplanning programme was given a big stimulus.

The achievements of the fourth plan were below targets. Agriculturegrowth was just at 2.8% and green revolution did not perform asexpected. Industry too grew at 3.9%.




As a result of inflationary pressure faced during the fourth plan, thefifth plan focused on checking inflation. Several new economic andnon-economic variables such as nutritional requirements, health,family planning etc were incorporated in the planning process.

Investment mix was also formulated based on demand estimated for

final domestic consumption.

Industry got the highest allocation of 24.3% and the plan forecasteda growth rate of 5.5% in national income.


The fifth plan was discontinued by the new Janata government in thefourth year itself. In 1978 the newly elected Morarji Desaigovernment rejected the plan.



The Janata government moved away from GNP approach todevelopment, instead sought to achieve higher production targetswith an aim to provide employment opportunities to themarginalized section of the society.

The Congress government on taking office in 1980 formulated a

new plan with a strategy to lay equal focus on infrastructure andagriculture.

Family planning was also expanded in order to preventoverpopulation.

The plan achieved a growth of 6% pa.




The main objectives of the Seventh five year plans were to establish growth inareas of increasing economic productivity, production of food grains, andgenerating employment opportunities.

The first three years of the seventh plan saw severe drought conditions, despitewhich the food grain production rose by 3.2%.

Special programmes like Jawahar Rozgar Yojana were introduced. Sectors likewelfare, education, health, family planning, employment etc got a largerdisbursement.

The Seventh Plan had strived towards socialism and energy production at large.The thrust areas of the 7th Five year plan have been enlisted below:

Social Justice Removal of oppression of the weak Using modern technology Agricultural development Anti-poverty programs Full supply of food, clothing, and shelter Increasing productivity of small and large scale farmers Making India an Independent Economy




Between 1990 and 1992, there were only Annual Plans.

In 1991, India faced a crisis in Foreign Exchange (Forex) reserves, left withreserves of only about US$1 billion. The Eighth plan was initiated just after asevere balance of payment crisis, which was intensified by the Gulf war in 1990.

Several structural modification policies were brought in to put the country in a pathof high growth rate. They were devaluation of rupees, dismantling of licenseprerequisite and decrease trade barriers.

Modernization of industries was a major highlight of the Eighth Plan.

Under this plan, the gradual opening of the Indian economy was undertaken tocorrect the enhancing deficit and foreign debt.

The major objectives included, controlling population growth, poverty reduction,employment generation, strengthening the infrastructure, Institutional building,tourism management, Human Resource development, Involvement of Panchayatraj, Nagarapalikas, N.G.O'S and Decentralisation and people's participation.

Energy was given prority with 26.6% of the outlay.

An average annual growth rate of 6.78% against the target 5.6% was achieved.



It was observed in the eighth plan that, even though the economyperformed well, the gains did not reach to the weaker sections of the society. The ninth plans therefore laid greater impetus onincreasing agricultural and rural incomes and alleviate theconditions of the marginal farmer and landless laborers.

The main objectives of the Ninth plan are speedy industrialization,human development, full-scale employment, poverty reduction, andself-reliance on domestic resources.

During the Ninth Plan period, the growth rate of 5.35 per cent was

achieved against the target of 6.5 per cent.



The aim of the tenth plan was to make the Indian economy the fastest growingeconomy in the world, with a growth target of 8%. It wanted to bring in investorfriendly market reforms and create a friendly environment for growth. It sought

active participation by the private sector and increased FDI's in the financialsector.

Emphasis was laid on corporate transparency and improving the infrastructure.

It sought to reduce poverty ratio by 5 percentage points by 2007 and increase

in literacy rates to 75 per cent by the end of the plan.

Increase in forest and tree cover to 25 per cent by 2007 and all villages to havesustained access to potable drinking water.

Reduction in the decadal rate of population growth between 2001 and 2011 to

16.2%.

Providing gainful and high-quality employment.

During the Tenth Plan period, the targeted growth rate was 8 per cent, but theactual growth rate was 7.2% for the entire 10th Plan period. Though, this is

below the target of 8%, it is the highest growth rate achieved in any plan period.



The eleventh plan has the following objectives:

Income & Poverty◦ Accelerate GDP growth from 8% to 10% and then

maintain at 10% in the 12th Plan in order to double percapita income by 2016-17

◦ Increase agricultural GDP growth rate to 4% per year toensure a broader spread of benefits

◦ Create 70 million new work opportunities.◦ Reduce educated unemployment to below 5%.◦

Raise real wage rate of unskilled workers by 20 percent.◦ Reduce the headcount ratio of consumption poverty by

10 percentage points.



Education◦ Reduce dropout rates of children from elementary

school from 52.2% in 2003-04 to 20% by 2011-12◦ Develop minimum standards of educational attainment

in elementary school, and by regular testing monitoreffectiveness of education to ensure quality

◦ Increase literacy rate for persons of age 7 years orabove to 85%

◦ Lower gender gap in literacy to 10 percentage point◦ Increase the percentage of each cohort going to higher

education from the present 10% to 15% by the end of the plan



Health◦ Reduce infant mortality rate to 28 and maternal

mortality ratio to 1 per 1000 live births◦ Reduce Total Fertility Rate to 2.1◦

Provide clean drinking water for all by 2009 and ensurethat there are no slip-backs

◦ Reduce malnutrition among children of age group 0-3to half its present level

◦ Reduce anaemia among women and girls by 50% by the

end of the plan.



Women and Children◦ Raise the sex ratio for age group 0-6 to 935 by 2011-

12 and to 950 by 2016-17◦ Ensure that at least 33 percent of the direct and indirect

beneficiaries of all government schemes are women andgirl children◦ Ensure that all children enjoy a safe childhood, without

any compulsion to work



Infrastructure◦ Ensure electricity connection to all villages and BPL

households by 2009 and round-the-clock power.◦ Ensure all-weather road connection to all habitation

with population 1000 and above (500 in hilly and tribalareas) by 2009, and ensure coverage of all significanthabitation by 2015

◦ Connect every village by telephone by November 2007and provide broadband connectivity to all villages by

2012◦ Provide homestead sites to all by 2012 and step up the

pace of house construction for rural poor to cover allthe poor by 2016-17



Environment◦ Increase forest and tree cover by 5 percentage points.◦ Attain WHO standards of air quality in all major cities by

2011-12.◦

Treat all urban waste water by 2011-12 to clean riverwaters.

◦ Increase energy efficiency by 20 percentage points by2016-17.

Brief Approach to Five Year's Plans

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