Five Year Plans of India
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The document summarizes India's eleven 5-year economic plans from 1951 to 2012. The first plan focused on agriculture and dams/irrigation and achieved 15% growth in net domestic product. The second plan emphasized heavy industry and public sector development. The third plan initially stressed agriculture but shifted to defense after the 1962 war with China. Subsequent plans targeted issues like the Green Revolution, poverty reduction, employment, rural development, and increasing GDP growth rates.
![• The plan followed the Mahalanobis model, an economic development model
developed by the Indian statistician Prasanta Chandra Mahalanobis in 1953.
• The plan attempted to determine the optimal allocation of investment between
productive sectors in order to maximise long-run economic growth.
• The plan assumed a closed economy in which the main trading activity would be
centered on importing capital goods.
Allocation
• The total amount allocated under the second five year plan in India was Rs.4,600
crore.
• This amount was allocated among various sectors:
• Power and irrigation
• Social services
• Communications and transport
• Miscellaneous
Third Five-Year Plan (1961–1966)
• The third plan stressed on agriculture and improvement in the production of
wheat, but the brief Sino-Indian War of 1962 exposed weaknesses in the economy
and shifted the focus towards the Defence industry.
• Many cement and fertilizer plants were also built.
• Punjab began producing an abundance of wheat.
• Many primary schools have been started in rural areas.
Plan Holiday (1966-69)
• In 1965–1966, India fought a [Indo-Pak] War with Pakistan.
• Due to this war, there was a severe drought in 1965.
• The war led to inflation and the priority was shifted to price stabilisation.
• The construction of dams continued.
Fourth Five-Year Plan (1969–1974)
• At this time Indira Gandhi was the Prime Minister.
• The government nationalised 14 major Indian banks and the Green Revolution in
India advanced agriculture.
• Main emphasis was on growth rate of agriculture to enable other sectors to move
forward.](https://image.slidesharecdn.com/fiveyearplansofindia-200526084736/85/Five-Year-Plans-of-India-2-320.jpg)
Five Year Plans of India
- 1. FIVE YEAR PLANS OF INDIA First Five-Year Plan (1951–1956) • The first Indian Prime Minister, Jawaharlal Nehru presented the first five-year plan to the Parliament of India on December 8, 1951. • This plan was based on the Harrod-Domar model. • The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation. • The total planned budget of Rs.2069 crore was allocated to seven broad areas • irrigation and energy (27.2 percent) • agriculture and community development (17.4 percent) • transport and communications (24 percent) • industry (8.4 percent) • social services (16.64 percent) • land rehabilitation (4.1 percent), and • for other sectors and services (2.5 percent) • The net domestic product went up by 15%. The monsoon was good and there were relatively high crop yields, boosting exchange reserves and the per capita income, which increased by 8%. • National income increased more than the per capita income due to rapid population growth. • Many irrigation projects were initiated during this period, including the Bhakra Dam and Hirakud Dam. • The World Health Organization, with the Indian government, addressed children's health and reduced infant mortality, indirectly contributing to population growth. Second Five-Year Plan (1956–1961) • The second five-year plan focused on industry, especially heavy industry. • The Second plan, particularly in the development of the public sector.
- 2. • The plan followed the Mahalanobis model, an economic development model developed by the Indian statistician Prasanta Chandra Mahalanobis in 1953. • The plan attempted to determine the optimal allocation of investment between productive sectors in order to maximise long-run economic growth. • The plan assumed a closed economy in which the main trading activity would be centered on importing capital goods. Allocation • The total amount allocated under the second five year plan in India was Rs.4,600 crore. • This amount was allocated among various sectors: • Power and irrigation • Social services • Communications and transport • Miscellaneous Third Five-Year Plan (1961–1966) • The third plan stressed on agriculture and improvement in the production of wheat, but the brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards the Defence industry. • Many cement and fertilizer plants were also built. • Punjab began producing an abundance of wheat. • Many primary schools have been started in rural areas. Plan Holiday (1966-69) • In 1965–1966, India fought a [Indo-Pak] War with Pakistan. • Due to this war, there was a severe drought in 1965. • The war led to inflation and the priority was shifted to price stabilisation. • The construction of dams continued. Fourth Five-Year Plan (1969–1974) • At this time Indira Gandhi was the Prime Minister. • The government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture. • Main emphasis was on growth rate of agriculture to enable other sectors to move forward.
- 3. • 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) • 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 savings were seen as key instruments • The plan was terminated in 1978 (instead of 1979) when Janta Party Govt. rose to power. Rolling Plan (1978 - 80) • There were 2 Sixth Plans. Janta Govt. put forward a plan for 1978-1983. • However, the government lasted for only 2 years. • Congress Govt. returned to power in 1980 and launched a different plan. Sixth Five-Year Plan (1980 – 85) • Focus – Increase in • national income, • modernization of technology, • ensuring continuous decrease in poverty and unemployment, • population control through family planning, etc. Seventh Five-Year Plan (1985 - 90) • Focus – rapid growth in food-grains production, increased employment opportunities and productivity within the framework of basic tenants of planning. • 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. • The plan undertook drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6%.
- 4. • Some of the main economic outcomes during eighth plan period were rapid economic growth, high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit. Ninth Five Year Plan (1997- 2002) • It was developed in the context of four important dimensions: • Quality of life • generation of productive employment • regional balance and • self-reliance Objectives of the Ninth Five Year Plan • to prioritize agricultural sector and emphasize on the rural development • to generate adequate employment opportunities and promote poverty reduction • to stabilize the prices in order to accelerate the growth rate of the economy • to ensure food and nutritional security. • to provide for the basic infrastructural facilities like education for all, safe drinking water, primary health care, transport, energy • to check the growing population increase • to encourage social issues like women empowerment, conservation of certain benefits for the Special Groups of the society • to create a liberal market for increase in private investments Tenth Five Year Plan (2002 - 2007) • Attain 8% GDP growth per year. Achieved 7.7% • Reduction of poverty ratio by 5 percentage points by 2007. • Providing gainful and high-quality employment at least to the addition to the labour force. • Reduction in gender gaps in literacy and wage rates by at least 50% by 2007. Eleventh Five Year Plan (2007 - 2012) • 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%.
- 5. • Raise real wage rate of unskilled workers by 20 percent. • 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%. • 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 per cent of the direct and indirect beneficiaries of all government schemes are women and girl children. • Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012. • Increase forest and tree cover by 5 percentage points. Plan Target Actual First Plan (1951 – 56) 2.9% 3.6% Second Plan (1956 – 61) 4.5% 4.3% Third Plan (1961 – 66) 5.6% 2.8% Plan Holiday (1966-19690 -- -- Fourth Plan (1969 – 1974) 5.7% 3.3% Fifth Plan (1974 – 79) 4.4% 4.8% Sixth Plan (1980 – 85) 5.2% 6.0% Seventh Plan (1985 – 90) 5.0% 6.0% Eighth Plan (1992 – 97) 5.6% 6.8% Ninth Plan (1997 – 2002) 6.5% 5.4% Tenth Plan (2002 – 2007) 8.0% 7.7% Eleventh Plan (2007 – 2012)