Five Year Plans

 

Five Year Plans

 

How did five-year plans come to be?

In the 1940s and 1950s, the concept of planning as a means of economic reconstruction gained popularity.

In 1944, a group of industrialists collaborated to create a proposal for the establishment of a planned economy in India. The Bombay Plan is its well-known name.

After independence, development planning was viewed as a vital decision for the nation.

In 1928, Joseph Stalin was the first to put the Soviet Union's Five-Year Plan into action.

After gaining independence, India started a number of five-year plans to grow its economy.

 

What is the FYP concept?

The concept of five-year plans is straightforward: the Indian government creates a document that details all of its revenue and expenses for a five-year period.

The central government's and each state government's budget is separated into two sections: the plan budget and the non-plan budget.

Every year, the non-plan budget is used for regular expenses. According to the priorities established by the plan, the funding is allocated over a period of five years.

The foundation of the Indian economy model was the idea of planning using five-year plans spanning 1951 to 2017.

A body called the Planning Commission created, carried out, and oversaw the Five Year Plans.

In 2015, the Planning Commission was superseded by NITI AAYOG, a think tank.

Three documents have been released by the Niti Aayog: a three-year action agenda, a seven-year medium-term strategy paper, and a fifteen-year vision document.

1951–56 was the first five-year plan.

The foundation for India's economic growth was established by the First Five Year Plan.

Jawaharlal Nehru, the country's first prime minister, presented it to the Indian Parliament.

A young economist named K.N. Raj made the case that India should "hasten slowly" for the first twenty years.

It focused mostly on the agricultural sector, including irrigation and dam construction. Ex: Bhakhra Nangal Dam received a substantial allocation.

The Harrod Domar Model served as its foundation, and it placed a strong emphasis on raising savings.

Five Indian Institutes of Technology have been founded by the end of 1956.

The growth rate that was attained was 3.6%, while the target growth rate was 2.1%.

Plan for the Second Five Years (1956–61)
Rapid industrialization and the public sector were prioritized in the Second Five Year Plan.
P.C. Mahalanobis oversaw the planning and drafting of it.
Rapid structural change was emphasized.
Under this scheme, the government protected domestic businesses by imposing tariffs on imports.

The actual growth rate, 4.27%, was little lower than the anticipated growth rate of 4.5%.

 

Plan for the Third Five Years (1961–1966)

The emphasis was on agriculture and increasing wheat production.

The states were given more responsibility for development. Secondary and higher education were transferred to the former states.

The purpose of panchayat elections was to create democracy at the local level.
The actual growth rate was only 2.4%, when the target growth rate was 5.6%.

This demonstrated the Third Plan's dreadful failure, forcing the government to impose "Plan Holidays" in 1966–1967, 1967–1968, and 1968–1969. The main reasons for the plan holidays were the Sino-Indian War and the Indo-Pak War, which led to the collapse of the Third Five Year Plan.

 

Plan for the Fourth Five Years: (1969–74)

It was implemented during Indira Gandhi's tenure as prime minister and aimed to address the earlier shortcomings.

A lot of focus was placed on growth with stability and progress towards self-reliance, based on the Gadgil Formula.

14 significant Indian banks were nationalized by the government, and agriculture was strengthened by the Green Revolution.

Additionally, the Drought Prone Area Program was introduced.

The real growth rate was 3.3%, compared to the target growth rate of 5.6%.

 

1974–1978: The Fifth Five-Year Plan

It placed emphasis on boosting employment and reducing poverty (garibi hatao).

The Electricity Supply Act was modified in 1975, allowing the central government to generate and transmit electricity.

The National Highway System of India was established.

During the first year of this strategy, the Minimum Needs Program was created with the goal of providing basic necessities. D.P. Dhar prepared the MNP.

The actual growth rate was 4.8%, compared to the target growth rate of 4.4%.

This plan was rejected by the newly elected Morarji Desai administration in 1978.

 

Plan Rolling (1978-80)

There was instability throughout this time. The sixth five-year plan was proposed by the Janata Party government after the fifth five-year plan was rejected. When Indira Gandhi was re-elected in 1980, the Indian National Congress then rejected this.

With a rolling plan, the plan's efficacy is assessed every year, and a new plan is developed the following year in response to the findings. As a result, the targets and the allocation are adjusted throughout this plan.

 

1980–85: Sixth Five Year Plan

By removing pricing limitations, it highlighted the start of economic liberty.

Nehruvian Socialism was thought to have come to an end.

In order to avoid population growth, family planning was implemented.

The National Bank for Agriculture and Rural Development was founded based on the Shivaraman Committee's recommendation.

Given that the actual growth rate was 5.7% and the goal growth rate was 5.2%, it appears to have been a success.

 

1985–1990: Seventh Five Year Plan

Rajiv Gandhi's tenure as prime minister oversaw this effort.

It placed emphasis on using technology to increase industrial productivity levels.

Additional goals included raising food grain production, boosting economic productivity, and creating jobs through social justice.

The results of the Sixth Five-Year Plan gave the Seventh Five-Year Plan a strong foundation for success.

The use of contemporary technology, anti-poverty initiatives, and the necessity of establishing India as an autonomous economy were all highlighted.

Its main goal was to meet the requirements for self-sustaining growth by the year 2000.

§ 5.0% was the desired growth rate. But the real growth rate increased to 6.01%.

 

Plans for the Year 1990–1992

The years 1990–91 and 1991–92 were regarded as Annual Plans since the Eight Five Year Plan was not implemented in 1990. Economic volatility was a major factor in this. During this period, India's foreign exchange reserves were in crisis. Prime Minister P.V. Narasimha Rao implemented liberalization, privatization, and globalization (LPG) in India to address the country's economic issues.

 

1992-97: Eighth Five-Year Plan

The modernization of industries was encouraged by the Eighth Plan.

On January 1, 1995, India joined the World Trade Organization.

Controlling population growth, reducing poverty, creating jobs, bolstering infrastructure development, managing tourism, and emphasizing human resource development were among the objectives.

It also emphasized the importance of decentralization in involving the Panchayats and Nagar Palikas.

The actual growth rate was an astounding 6.8%, although the anticipated growth rate was 5.6%.

 

Plan for the Ninth Five Years (1997-2002)

Atal Bihari Vajpayee served as prime minister on the 50th anniversary of India's independence.

It witnessed the combined efforts of the public and commercial sectors to ensure economic development and provided assistance to social spheres in their efforts to eradicate poverty completely.

The emphasis was also on striking a balance between people's quality of life and quick progress.

The goals also included primary education for all children in the nation, self-reliance development, and the empowerment of socially underprivileged strata.

Among the tactics were increasing the high export rate to become self-sufficient and making effective use of limited resources to expand quickly, among others.

The actual growth rate was 6.8%, which was less than the anticipated growth rate of 7.1%.

 

Plan for the Tenth Five Years (2002-07)

This plan's characteristics were encouraging equitable development and inclusive growth.

It aimed for an annual GDP growth of 8%.

It sought to provide jobs for 80 million people and cut poverty in half. It also sought to lessen regional disparities.

§ It also placed a strong emphasis on closing the gender gap in education and pay by the year 2007.

The actual growth rate was 7.6%, compared to the target growth rate of 8.1%.

 

Plan for the Eleventh Five Years (2007-2012)

The Eleventh Plan was noteworthy because it concentrated on IT institutes and distance learning in order to boost enrollment in higher education. For example, the Right to Education Act, which was introduced in 2009 and went into force in 2010, made education free and mandatory for children ages 6 to 14. Its primary goal was to promote more inclusive and rapid growth.

Its goals include reducing gender inequity and promoting environmental sustainability.

The Eleventh Five Year Plan was created by C. Rangarajan.

By 2009, everyone was expected to have access to clean drinking water.

The actual growth rate was 8%, while the goal rate was 9%.

 

Plan for the Twelfth Five Years (2012–17)

"Faster, More Inclusive and Sustainable Growth" was the subject of the previous Five Year Plan.

The plan's objectives included supplying energy to every town and bolstering infrastructural initiatives.

Additionally, it sought to expand access to higher education and eliminate the social and gender gap in school admissions.

Furthermore, it aimed to generate new opportunities in the non-farming sector and increase the amount of green cover by one million hectares annually.

The National Development Council authorized a growth rate of 8% for this twelfth plan in 2012, but the planned growth rate was 9%.