Business Env[1]. 3new

8/9/2019 Business Env[1]. 3new

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ECONOMIC PLANNING


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RATIONALE FOR PLANNING

Limitations of market mechanism

Need for social justice

R

esource mobilisation & allocation in the contextof overall development programme


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PLANNING PR

OCESS

Planning body

Survey of resources & collection of necessary

data Planning objectives

Priorities

Development strategy

Balancing in the plan

Resource mobilisation

Administrative efficiency


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OBJECTIVES OF ECONOMIC

PLANNING

Economic growth

Distributive justice

Self reliance

Creation of employment opportunities

Elimination of poverty

Modernisation

Stability (Prices, forex, fiscal & BOPposition)


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IMPORTANT FEATURES OF INDIAN

PLANS

Indicative economic planning

Comprehensive plans

Physical planning

Unreliable data


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FORMULATION

OF A PLAN

I STAGE: examining state of economy, appraisal of pasttrends & rate of growth

II STAGE: indicating targets of production to be achieved,constituting groups for each sector

III STAGE: on the basis of preliminary studiesundertaken by the groups, commission presents mainfeatures of plan in form of a draft plan which is discussed

in detail by Cabinet & is placed before NationalDevelopment Council

With modifications as suggested by NDC, the document ispresented for final approval.


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NATIONAL DEVELPOMENT COUNCIL

(NDC)

Framed under planning commission

Presided by Prime Minister

Composed of Union Cabinet ministers, Chiefministers of state, Union territories &members of Planning commission

Secretary of planning commission acts assecretary of NDC


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INDIAS FYPs: BASIC APPROACH


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STRATEGY OF PLANNING IN EARLIER

PHASE (1951-80)

Developing a sound base for initiating processof long term growth

High priority to industrialisation

Emphasis on development of capital goodsindustries


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NEW DEVELOPMENT STRATEGY

Also known as export led growth strategy.

Assumes that trade is an engine of growth

i.e. performance on export front willdetermine overall growth performance ofeconomy


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FIVE YEAR PLANS I (1951-56) II (1956-61) III (1961-66) Plan Hold (1966-69)

IV (1969-74) V(1974-79) VI (1980- 85) VII (1985-90) Annual plans (1990-92) VIII (1992-97)

IX (1997-02) X (2002- 07) XI (2007-12)


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TENTH PLAN (2002- 07): TARGETS

Reduction of poverty to 20% by 2007 & 10% by2012

Gainful employment to addition of labour force

Universal access to primary education by 2007

Reduction in decadal rate of population growth

Increase in literacy to 72% by 2007 & 80% by 2012

Reduction of IMR to 20 per 1000 live births by 2007

& to 10 by 2012 All villages to have access to potable drinking water

by 2012


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Disinvestment of PSUs

Reforms in taxes, labour laws

Adoption of private partnership in infrastructure Power sector reforms

Controlling union & state budge deficits

Encouraging FDI flows

Making the economy competitive with that of rest

of world

TENTH PLAN (2002- 07):

STRATEGIES


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SUCCESS & ACHIEVEMENT OF

PLANNING

Agrarian reforms & green revolution

Increase in industrial production

Growth rate Development of infrastructure

Welfare orientation


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YEAR

TOTALAVAILABILITY OFFOODGRAINS

(million tonnes)

1950-51 50.8

1960-61 82.0

1970-71 108.4

1980-81 129.6

1990-91 176.4

2000-01 205.0

SOURCE: ECONOMIC SURVEY 2003-04


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YEAR

IIP1950-51 7.9

1960-61 15.6

1970-71 28.1

1980-81 43.1

1990-91 91.6

1996-97 139.5

1997-98 145.2

1998-99 154.9

1999-2000 162.7

BASE YEAR: 1980-81

SOURCE: ECONOMIC SURVEY 2002-03


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CRITICAL EVALUATION Inconsistencies in plan objectives

Absence of financial strategy

Flaws in industrial strategy

Neglect of employment strategy

Faulty Implementation

Insufficient & unreliable data

Lack of political will


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GROWTH PERFORMANCE IN PLANS

PLAN TARGET ACTUALI (1951-56) 2.1 3.7

II (1956-61) 4.5 4.1

III (1961-66) 5.6 2.7

PH (1966- 69) 3.9

IV (1969-74) 5.7 3.4

V (1974-79) 5.5 5.0

VI (1980-85) 5.2 5.5

VII (1985-90) 5.0 5.8

AP (1990- 92) 2.9VIII (1992-97) 5.6 6.78

IX (1997-2002) 6.5 5.4

X (2002-07) 8 7.7

SOURCE:PLANNINGCOMMISSION


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STATISTICAL INDICATORS OF ECONOMIC

GOALS

ECONOMIC GOAL STATISTICAL INDICATORS

High level of aggregate o/p & Y GNP, GDP

Rapid growth of Y Avg annual rates of growth of GNP, GDP

Greater equality in Y dist Ginni coefficient

More productive employment Dist of Labor force by industry& occupational classification & Y

Lower international dependence Foreign trade & internationalpayment

Price stability Price indices

Greater regional balance Gross regional product percapita

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