Five Year Plans India pdf

Five Year Plans of  India-

History of Planning in India & Origin of Five Year Plans:

Though the planned economic development in India began in 1951 with the inception of First Five Year Plan, theoretical efforts had begun much earlier, even prior to the independence. 

These efforts are as under-

1. Setting up of National Planning Committee by Indian National Congress in 1938, 

2. The Bombay Plan & Gandhian Plan in 1944,  

3. Peoples Plan in 1945 (by post war reconstruction Committee of Indian Trade Union), 

4. Sarvodaya Plan in 1950 by Jaiprakash Narayan were steps in this direction.

• Five-Year Plans (FYPs) are centralized and integrated national economic programs.

• Joseph Stalin implemented the first FYP in the Soviet Union in the late 1920s.

• Most communist states and several capitalist countries subsequently have adopted them.

• China and India both continue to use FYPs, although China renamed its Eleventh FYP, from 2006 to 2010, a guideline (guihua), rather than a plan (jihua), to signify the central government’s more hands-off approach to development.

• After independence, India launched its First FYP in 1951, under socialist influence of first Prime Minister Jawaharlal Nehru.

• The process began with setting up of Planning Commission in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community. 

• The Planning Commission was charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.

• The first Five-year Plan was launched in 1951 and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan Conflict. 

• Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year plan was started in 1969.

• The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre and the years 1990-91 and 1991-92 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.

• For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.

Target growths of Five year plans-

Five year plans	Year	Target growth rate of GDP (%)	Target Achieved (%)
First plan	1951-56	2.1	3.6
Second plan	1956-61	4.5	4.21
Third plan	1961-66	5.6	2.72
Fourth plan	1969-74	5.7	2.05
Fifth plan	1974-79	4.4	4.83
Sixth plan	1980-85	5.2	5.54
Seventh plan	1985-90	5.0	6.02
Eight plan	1992-97	5.6	6.68
Ninth Plan	1997-02	6.5	5.55
Tenth plan	2002-07	8.0	7.8
Eleventh plan	2007-12	9.0	7.9
Twelfth plan	2012-17	8.0	–

 

Outline of Various Five year Plans:

First Plan (1951 - 56)

Target Growth : 2.1 %

Actual Growth 3.6 %

• It was based on Harrod-Domar Model.
• Influx of refugees, severe food shortage & mounting inflation confronted the country at the onset of the first five year Plan.
• The Plan Focussed 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. Objectives of rehabilitation of refugees, food self sufficiency & control of prices were more or less achieved.

Second Plan (1956 - 61)

Target Growth: 4.5%

Actual Growth: 4.3%

THE Mahalanobis Plan

• Simple aggregative Harrod Domar Growth Model was again used for overall projections and the strategy of resource allocation to broad sectors as agriculture & Industry was based on two & four sector Model prepared by Prof. P C Mahalanobis. (Plan is also called Mahalanobis Plan).
• Second plan was conceived in an atmosphere of economic stability.
• It was felt agriculture could be accorded lower priority. The Plan Focussed on rapid industrialization- heavy & basic industries. Advocated huge imports through foreign loans.
• The Industrial Policy 1956 was based on establishment of a socialistic pattern of society as the goal of economic policy.
• Acute shortage of forex led to pruning of development targets, price rise was also seen ( about 30%) vis a vis decline in the earlier Plan & the 2nd FYP was only moderately successful.

Third Plan (1961 - 66)

Target Growth: 5.6%

Actual Growth: 2.8%

• At its conception, it was felt that Indian economy has entered a “takeoff stage”. Therefore, its aim was to make India a 'self-reliant' and 'self-generating' economy.
• Based on the experience of first two plans (agricultural production was seen as limiting factor in India’s economic development), agriculture was given top priority to support the exports and industry.
• The Plan was thorough failure in reaching the targets due to unforeseen events - Chinese aggression (1962), Indo-Pak war (1965), severe drought 1965-66. Due to conflicts the approach during the later phase was shifted from development to defence & development.

Three Annual Plans (1966-69)

(euphemistically described as Plan holiday.)

• Failure of Third Plan that of the devaluation of rupee (to boost exports) along with inflationary recession led to postponement of Fourth FYP.
• Three Annual Plans were introduced instead. 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 involving wide-spread distribution of high-yielding varieties of seeds, extensive use of fertilizers, 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 Plan (1969 - 74)

Target Growth: 5.7%

Actual Growth: 3.3%

• Refusal of supply of essential equipments and raw materials from the allies during Indo Pak war resulted in twin objectives of  “growth with stability “ and “progressive achievement of self reliance “ for the Fourth Plan.
• 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.
• Implementation of Family Planning Programmes were amongst major targets of the Plan.
• Influx of Bangladeshi refugees before and after 1971 Indo-Pak war was an important issue along with price situation deteriorating to crisis proportions and the plan is considered as big failure.

Fifth Plan (1974-79)

Target Growth: 4.4%

Actual Growth: 4.8%

• The final Draft of fifth plan was prepared and launched by D.P. Dhar in the backdrop of economic crisis arising out of run-away inflation fuelled by hike in oil prices and failure of the Govt. takeover of the wholesale trade in wheat.
• 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 savings were seen as key instruments.
• Due to high inflation, cost calculations for the Plan proved to be completely wrong and the original public sector outlay had to be revised upwards. After promulgation of emergency in 1975, the emphasis shifted to the implementation of Prime Ministers 20 Point Programme.
• FYP was relegated to the background and when Janta Party came to power in 1978, the Plan was terminated.

Rolling Plan (1978 - 80)

• There were 2 Sixth Plans. Janta Party Govt. put forward a plan for 1978-1983 emphasising on employment, in contrast to Nehru Model which the Govt criticised for concentration of power, widening inequality & for mounting poverty . However, the government lasted for only 2 years. Congress Govt. returned to power in 1980 and launched a different plan aimed at directly attacking on the problem of poverty by creating conditions of an expanding economy.

Sixth Plan (1980 - 85)

Target Growth: 5.2%

Actual Growth: 5.7%

• The Plan focussed on Increase in national income, modernization of technology, ensuring continuous decrease in poverty and unemployment through schemes for transferring skills (TRYSEM) and seets (IRDP) and providing slack season employment (NREP), controlling population explosion etc.
• Broadly , the sixth Plan could be taken as a success as most of the target were realised even though during the last year (1984-85) many parts of the country faced severe famine conditions and agricultural output was less than the record output of previous year.

Seventh Plan (1985 - 90)

Target Growth: 5.0%

Actual Growth: 6.0%

• The Plan aimed at accelerating food grain production, increasing employment opportunities & raising productivity with focus on ‘food, work & productivity’.
• The plan was very successful as the economy recorded 6% growth rate against the targeted 5% with the decade of 80’s struggling out of the’ Hindu Rate of Growth’.

Eighth Plan (1992 - 97)

Target Growth:  5.6 %

Actual Growth: 6.8%

• The eighth plan was postponed by two years because of political uncertainty at the Centre.
• Worsening Balance of Payment position, rising debt burden, widening budget deficits, recession in industry and inflation 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% through introduction of fiscal & economic reforms including liberalisation under the Prime Minister ship of Shri P V Narasimha Rao.
• Some of the main economic outcomes during eighth plan period were rapid economic growth (highest annual growth rate so far – 6.8 %), high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit. High growth rate was achieved even though the share of public sector in total investment had declined considerably to about 34 %.

Ninth Plan (1997- 2002)

Target Growth: 6.5%

Actual Growth: 5.4%

• The Plan prepared under United Front Government focussed on “Growth With Social Justice & Equality'', Ninth Plan aimed to depend predominantly on the private sector – Indian as well as foreign (FDI) & State was envisaged to increasingly play the role of facilitator & increasingly involve itself with social sector viz education, health etc and infrastructure where private sector participation was likely to be limited.
• It assigned priority to agriculture & rural development with a view to generate adequate productive employment and eradicate poverty.

Tenth Plan (2002 - 2007)

Target Growth: 8 %

Actual Growth: 7.6 %

• Recognising that economic growth can't be the only objective of national plan, Tenth Plan had set ‘monitorable targets’ for few key indicators (11) of development besides 8 % growth target.
• The targets included reduction in gender gaps in literacy and wage rate, reduction in Infant & maternal mortality rates, improvement in literacy, access to potable drinking water cleaning of major polluted rivers, etc.
• Governance was considered as factor of development & agriculture was declared as prime moving force of the economy.
• States role in planning was to be increased with greater involvement of Panchayati Raj Institutions.
• State wise break up of targets for growth and social development sought to achieve balanced development of all states.

Eleventh Plan (2007 - 2012)

Target Growth: 9 %

Actual Growth: 8%

• Eleventh Plan was aimed “Towards Faster & More Inclusive Growth" after UPA rode back to power on the plank of helping Aam Aadmi (common man).
• India had emerged as one of the fastest growing economy by the end of the Tenth Plan.
• The savings and investment rates had increased, industrial sector had responded well to face competition in the global economy and foreign investors were keen to invest in India. But the growth was not perceived as sufficiently inclusive for many groups, specially SCs , STs & minorities as borne out by data on several dimensions like poverty, malnutrition, mortality, current daily employment etc.
• The broad vision for 11th Plan included several inter related components like rapid growth reducing poverty & creating employment opportunities , access to essential services in health & education, specially for the poor, extension if employment opportunities using National Rural Employment Guarantee Programme , environmental sustainability , reduction of gender inequality etc. Accordingly various targets were laid down like reduction in unemployment (to less than 5 % among educated youth) & headcount ratio of poverty ( by 10 %), reduction in drop out rates , gender gap in literacy , infant mortality , total fertility , malnutrition in age group of 0-3 ( to half its present level), improvement in sex ratio, forest & tree cover, air quality in major cities, , ensuring electricity connection to all villages & BPL households (by 2009) & reliable
• power by end of 11th Plan , all weather road connection to habitations with population 1000& above (500 in hilly areas) by 2009, connecting
• every village by telephone & providing broad band connectivity to all villages by 2012.
• The Eleventh Plan started well with the first year achieving a growth rate of 9.3 per cent, however the growth decelerated to 6.7 per cent rate in 2008-09 following the global financial crisis. The economy recovered substantially to register growth rates of 8.6 per cent and 9.3 per cent in 2009-10 and 2010-11 respectively.
• However, the second bout of global slowdown in 2011 due to the sovereign debt crisis in Europe coupled with domestic factors such as tight monetary policy and supply side bottlenecks, resulted in deceleration of growth to 6.2 per cent in 2011-12. Consequently, the average annual growth rate of Gross Domestic Product (GDP) achieved during the Eleventh Plan was 8 per cent, which was lower than the target but better than the Tenth Plan achievement. Since the period saw two global crises - one in 2008 and another in 2011 – the 8 per cent growth may be termed as satisfactory. The realised GDP growth rate for the agriculture, industry and services sector during the 11th Plan period is estimated at 3.7 per cent, 7.2 per cent and 9.7 per cent against the growth target of 4 per cent, 10-11 per cent and 9-11 per cent
• respectively.
• The Eleventh Plan set a target of 34.8 per cent for domestic savings and 36.7 per cent for investment after experiencing a rising level of domestic savings as well as investment and especially after emergence of structural break during the Tenth Plan period.
• However, the domestic savings and investment averaged 33.5 per cent and 36.1 per cent of GDP at market prices respectively in the Eleventh Plan which is below the target but not very far.
• Based on the latest estimates of poverty released by the Planning Commission, poverty in the country has declined by 1.5 percentage points per year between 2004-05 and 2009-10.The rate of decline during the period 2004-05 to 2009-10 is twice the rate of decline witnessed during the period 1993-94 to 2004-05. Though the new poverty count based on Tendulkar Formula has been subject of controversy , it is believed by the Committee that whether we use the old method or the new , the decline in percentage of population below poverty line is almost same.
• On the fiscal front , the expansionary measures taken by the government to counter the effect fo global slowdown led to increase in key indicators through 2009-10 with some moderation thereafter.
• The issue of Price Stability remained resonating for more than half of the Plan period. Inability to pass on burden on costlier imported oil prices might have constrained the supply of investible funds in the government’s hand causing the 11th Plan to perform at the levels below its target.

Twelfth Five Year Plan (2012-17)

Target Growth:  8%

Actual Growth:  %

Broad Objectives of 12th Five Year Plan

• To reduce poverty.
• To improve regional equality across states and within states 
• To improve living conditions for SCs, STs, OBCs, Minorities 
• To generate attractive employment opportunities for Indian youth,  create 50 million new work opportunities in the non farm sector. 
• To eliminate gender gaps (to remove gender and social gap in school enrolment.) 
• To enhance access to higher education. 
• To reduce malnutrition among children aged 0–3 years. 
• To ensure that 50% of the rural population have accesses to proper drinking water. 
• To increase green cover by 1 million hectare every year. 
• To provide access to banking services to 90% of households.

12th Five Year Plan lists various growth indicators as follows:

• It aims at average GDP growth rate of 8%
• It seeks to achieve 4% growth in agricultural sector
• It aims at reducing head-count poverty by 10%
• It aims at generating 50 million work opportunities in non-farm sector and providing skill certifications
• It aims at eliminating gender and social gap in education
• Reducing Infant Mortality Rate (IMR) to 25, Merternal Mortality Rate (MMR) to 100 and Total Fertility Rate (TFR) to 2.1
• Increasing infrastructure investment to 9% of GDP
• Achieving universal road connectivity and access to power for all villages
• Provision of banking services for 90% households
• Major welfare benefits and subsidies via Aadhaar card
• Secondary Education for all by 2017
• Increase public spending from 1% (11th plan) to 2.5% of GDP by the end of 12th
• Development of a National Action Plan for Climate Change to achieve target of 20% to 25% reduction in emission levels by 2020
• Getting 5 Indian universities in the list of top 200 universities in the world
• For the purpose of providing electricity to households it aims at addition of 88,000 MW electricity generation capacity and 55,000 MW of renewable energy capacity.
• Eliminate gender and social gap in school enrollment
• Improving child sex ratio (0-6) to 950
• Reducing under nutrition among children aged 0-3 to half of the NFHS-3 level
• Increasing Gross Irrigated area from 90 million hectares to 103 million hectares
• Connecting all villages with all-weather roads and upgrading national and state highways to minimum two-lane standard
• Complete Eastern and Western Dedicated Freight Corridor
• Increase rural tele-density to 70%, currently it is 40.81%
• Ensuring 50% of rural population has access to 40 lpcd piped drinking water supply and 50% of Gram Panchayat achieve Nirmal Gram Status
• Increasing Green Cover (as measured by Satellite Imagery) by 1 million hectare every year
• It has proposed a modified Accelerated Irrigation benefits program and expanded Watershed Management project

Monitorable Targets of the Plan :

Twenty Five core indicators listed below reflect the vision of rapid, sustainable & more inclusive growth of the twelfth Plan:

Economic Growth

1. Real GDP Growth Rate of 8.0 per cent.

2. Agriculture Growth Rate of 4.0 per cent.

3. Manufacturing Growth Rate of 10.0 per cent.

4. Every State must have an average growth rate in the Twelfth Plan preferably higher than that achieved in the Eleventh Plan.

Poverty and Employment

5. Head-count ratio of consumption poverty to be reduced by 10 percentage points over the preceding estimates by the end of Twelfth FYP.

6. Generate 50 million new work opportunities in the non-farm sector and provide skill certification to equivalent numbers during the Twelfth FYP.

Education

7. Mean Years of Schooling to increase to seven years by the end of Twelfth FYP.

8. Enhance access to higher education by creating two million additional seats for each age cohort aligned to the skill needs of the economy.

9. Eliminate gender and social gap in school enrolment (that is, between girls and boys, and between SCs, STs, Muslims and the rest of the population) by the end of Twelfth FYP.

Health

10. Reduce IMR to 25 and MMR to 1 per 1,000 live births, and improve Child Sex Ratio (0–6 years) to 950 by the end of the Twelfth FYP.

11. Reduce Total Fertility Rate to 2.1 by the end of Twelfth FYP.

12. Reduce under-nutrition among children aged 0–3 years to half of the NFHS-3 levels by the end of Twelfth FYP.

Infrastructure, Including Rural Infrastructure

13. Increase investment in infrastructure as a percentage of GDP to 9 per cent by the end of Twelfth FYP.

14. Increase the Gross Irrigated Area from 90 million hectare to 103 million hectare by the end of Twelfth FYP.

15. Provide electricity to all villages and reduce AT&C losses to 20 per cent by the end of Twelfth FYP.

16. Connect all villages with all-weather roads by the end of Twelfth FYP.

17. Upgrade national and state highways to the minimum two-lane standard by the end of Twelfth FYP.

18. Complete Eastern and Western Dedicated Freight Corridors by the end of Twelfth FYP.

19. Increase rural tele-density to 70 per cent by the end of Twelfth FYP.

20. Ensure 50 per cent of rural population has access to 40 lpcd piped drinking water supply, and 50 per cent gram panchayats achieve Nirmal Gram Status by the end of Twelfth FYP.

Environment and Sustainability

21. Increase green cover (as measured by satellite imagery) by 1 million hectare every year during the Twelfth FYP.

22. Add 30,000 MW of renewable energy capacity in the Twelfth Plan

23. Reduce emission intensity of GDP in line with the target of 20 per cent to 25 per cent reduction over 2005 levels by 2020.

Service Delivery

24. Provide access to banking services to 90 per cent Indian households by the end of Twelfth FYP.

25. Major subsidies and welfare related beneficiary payments to be shifted to a direct cash transfer by the end of the Twelfth Plan, using the Aadhar platform with linked bank accounts.