Five – Year Plans in India – Brief Overview

First Five – Year Plan (1951 -56)

It was based on Harrod – Domar Model.

Community Development Programme launched in 1952.

Focus on agriculture, price stability, power and transport.

It was a successful plan primarily because of good harvests in the last two years of the plan.

National income went up by 18% and per capita income by 11%.

Second Five – Year Plan (1956 - 61)

Target Growth :- 4.5% while actual Growth :- 4.27%.

Also called Mahalanobis Plan named after the well – known economist.

Focus – rapid industrialisation.

Advocated huge imports through foreign loans.

Shifted basic emphasis from agriculture to industry far too soon.

During this plan, prices increased by 30%, against a decline of 13% during the First Plan.

Third Five – Year Plan (1961 - 66)

Target Growth :- 5.6% while actual Growth :- 2.84%.

At its conception, it was felt that Indian economy has entered a take – off stage. Therefore, its aim was to make India a “Self- reliant” and “self – generating” economy.

Based on the experience of first two plan, agriculture was given top priority to support the exports and industry.

Complete failure in reaching the targets due to unforeseen events – Chinese aggression (1962), Indo – Pak war (1965), severe drought 1965 – 66.

Three Annual Plans (1966 -69) Plan holiday for 3 years.

Prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans.

During these plans a whole new agricultural strategy was implemented. It involved wide – spread distribution of high – yielding varieties of seeds, extensive use of fertilisers, exploitation of irrigation potential and soil conservation.

During the Annual Plans, the economy absorbed the shocks generated during the Third Plan.

It paved the path for the planned growth ahead.

Fourth Five – Year Plan (1969 - 74)

Target Growth :- 5.7% while actual Growth :- 3.30%.

Main emphasis was on growth rate of agriculture to enable other sectors to move forward.

First two years of the plan saw record production. The last three years did not measure up due to poor monsoon.

Influx of Bangladeshi refugees before and after 1971 Indo – Pak war was an important issue.

Fifth Five – Year Plan (1974 - 79)

Target Growth :- 4.4% while actual Growth :- 3.8%.

The fifth plan was prepared and launched by D.D. Dhar.

It proposed to achieve two main objectives: “Removal of Poverty” (Garibi Hatao) and “attainment of self – reliance”.

Promotion of high rate of growth, better distribution of income and significant growth in the domestic rate of saving were seen as key instruments.

The plan was terminated in 1978 (instead of 1979) when Janta Party Government rose to power.

Rolling Plan (1978 - 80)

There were 2 sixth Plans. Janta Government put forward a plan for 1978 – 83. However, the Government lasted for only 2 years. Congress Government returned to power in 1980 and launched a different plan.

Sixth Five – Year Plan (1980 - 85)

Target Growth :- 5.2% while actual Growth :- 5.66%.

Focus :-

Increase in national income.

Modernisation of technology.

Ensuring continuous decrease in poverty and unemployment.

Population control through family planning. Etc...

 Seventh Five – Year Plan (1985 -90)

Target Growth :- 5.0% while actual Growth :- 6.01%.

Focus:-.

Rapid growth in food-grains production.

Increased employment opportunities and productivity within the frame-work of basic tenets of planning.

Result:-

The plan was very successful, the economy recorded 6% growth rate against the targeted 5%.

Eighth Five – Year Plan (1992 - 97)

The eighth plan was postponed by two years because of political  uncertainty at the Centre.

Worsening Balance of Payment position and inflation during 1990 – 91 were the key issues during the launch of the plan.

The plan undertook drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6%.

Some of the main economic outcomes during eighth plan period were:-

·         Rapid economic growth.

·         High growth of agriculture and allied sectors.

·         High growth of manufacturing sectors.

·         Growth in exports and imports.

·         Improvement in trade and current account deficit.

Ninth Five – Year Plan (1997 - 2002)

Target Growth :- 6.5% while actual Growth :- 5.35%.

This plan was developed in the context of four important dimensions :-

Quality of life.

Generation of productive employment.

Regional balance

Self- reliance.

Tenth Five – Year Plan (2002 - 07)

Goals for this plan were:-

To achieve 8% GDP growth rate.

Reduction of poverty ratio by 5% points by 2007.

Providing gainful high quality employment to the addition of the labour force over the tenth plan period.

Universal access to primary education by 2007.

Reduction in gender gaps in literacy and wage rates by at least 50% by 2007.

Reduction in decadal rate of population growth between 2001-11 to 16.2%.

Increase in literacy rate to 72% within the plan period and to 80% by 2012.

Reduction in Infant Mortality Rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012.

Increase in forest and tree cover to 25% by 2007 and 33% by 2012.

All villages to have sustained access to potable drinking water by 2012.

Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.

Eleventh Five – Year Plan (2007 - 12)

Goals for this plan were:-

Accelerate GDP growth from 8% to 10%. Increase agricultural GDP growth rate to 4% per year.

Create 70 million new work opportunities and reduce educated unemployment to below 5%.

Raise real wage rate of unskilled workers by 20%.

Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12. Increase literacy rate for persons of age 7 years or above to 85%.

Lower gender gap in literacy to 10% point. Increase the percentage of each cohort going to higher education from the present 10% to 15%.

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. Reduce malnutrition among children between 0 – 3 years to half its present level. Reduce anaemia among women and girls by 50%.

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% of the direct and indirect beneficiaries of all government schemes are women and girl children.

Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015.

Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012.

Increase forest and tree cover by 5% points.

Attain WHO standards of air quality in all major cities by 2011-12.

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

Increase energy efficiency by 20% points by 2016-17.

12^th Five – Year Plan in India (2012 - 17)

The theme of the approach Paper is “faster, sustainable and more inclusive growth”.

Average growth target has been set at 8.2 percent.

Growth rate has been lowered to 8.2% from the 9.0% projected earlier in view of adverse domestic and global situation.

Areas of main thrust are:-

·         Infrastructure.

·         Health.

·         Education.

The commission had accepted then Finance Minister P. Chidambaram’s suggestion that direct cash transfer of subsidies in food, fertilisers and petroleum be made by theend of the 12^th Plan period.

The 12^th Plan seeks to achieve 4% agriculture sector growth during the five – year period.

On poverty alleviation, the commission plans to bring down the poverty ration by 10%. At present, the poverty is around 30% of the population.

Health and education sectors are major thrust areas and the outlays for these in the plan have been raised.

The outlay on health would include increased spending in related areas of drinking water and sanitation.

The target is to generate 50 million new jobs while achieving 8% growth target.

The plan aims at increasing investment in infrastructure to 9% of the GDP by the end of the Plan period (2012 - 17).

The aggregate Plan resources are estimated at Rs. 37.16 lakh crore during the five – year period.

The other targets include increasing green cover by one million hectare every year and adding 30,000 MW of renewable energy generation capacity in the Plan period.

It also seeks to reduce emission intensity of the GDP in line with the target of 20 – 25 reduction by 2020 over 2005 levels.

Three different Economic Scenarios for 12^th Five – year Plan:-

The Five – year Plans earlier used to present single growth projection. However, this time the Planning Commission has come out with three different economic scenarios for 12^th Five – year Plan. They are presented as follows :-

·         As per the inspirational scenario one of strong inclusive growth – India’s economic growth will be average 8% in the five years.

·         In the scenario of insufficient action, the GDP growth is likely to be in the range of 6.5 – 7.0%.

·         The document also cautions that in scenario of policy logjam, the GDP growth could slow down to 5 – 5.5%.

The Planning Commission is banking on reinvigorating a few existing policies while expecting vastly improved performance in certain key areas. For example, gross fixed capital formation rate to go up to 35% from the present 32%, with the private sector playing a major role in catalysing such investment; a new industrial policy that focuses on better coordination between the Government and the private sector to vastly improve business sentiment; stressing the importance of national industrial manufacturing zones in a scheme of reviving industrial output.