FIVE YEAR PLAN

INTRODUCTION

Since Independence, the Indian economy has been premised on the concept of
planning. This has been carried through the five-year plans,

It is developed, executed, and monitored by the Planning Commission. With the Prime
Minister as the Chairman, the commission has a nominated Deputy Chairman, who
holds the rank of a Cabinet Minister.

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, rather than a plan , to signify the central governments
more hands-off approach to development. India launched its First FYP in 1951,
immediately after independence under socialist influence of first Prime Minister
Jawaharlal Nehru.

Montek Singh Ahluwalia is currently the Deputy Chairman of the Commission. The
Eleventh Plan completed its term in March 2012 and the twelfth plan is currently
underway.

The first Five-Year Plan was one of the most important because it has a great role in the
launching of Indian development after the Independence. Thus, it strongly supported
agriculture production and it also launched the industrialization of the country (but less
than the Second Plan, which focused on heavy industries).

It built a particular system of "Mixed economy", with a great role for the public sector
(with an emerging Welfare State), as well as a growing private sector (represented by
some personalities as those who published the Bombay Plan).

INFORMATION ABOUT FIRST ELEVENTH FIVE YEAR PLAN

First Plan

Period: 1951-1952.Proposed Plan Outlay: Rs.2069 Crores.

To reconstruct the damaged economy after World War and partition. To check the
inflationary trends. To solve food crisis and to improve the availability of raw materials,
especially Jute and Cotton. To rehabilitate refugees. Total allocation Rs.2069 Crores
Actual expenditure Rs.1960 Crores .NDP increased by 15% and per capita income by
8%.

SECOND PLAN

Period: 1956-1961.Proposed plan outlay: Rs.7900 Crores .Situation: Low industrial

output.Objectives: Rapid industrialization and development of heavy and basic
industries. Plan could not be implemented fully because of acute shortage of
foreign exchange.

THIRD PLAN

Period: 1961-66.Proposed Plan Outlay: Rs.11600 Crores .Situation: Rate of growth of agriculture
was the main limiting factor in Indias economic development. Objective: Top priority to
agriculture with equal emphasis on development of basic industries. Objective changed to
defense development because of indo-china and indo-pak wars.

FOURTH PLAN

Period: 1969-74.Proposed Plan Outlay: Rs.24880 Crores .Situation: large scale poverty
and unemployment. Objective: Growth with stability and progressive achievement of
self-reliance. Aimed at 5.5% growth and provision of national minimum for weaker
sections of the community- Garibi Hatao.

FIFTH PLAN

Period: 1974-79.Proposed Plan Outlay: Rs.53410 Crores .Situation: high inflation, hike in
oil prices and failure of Government take-over of the wholesale trade in wheat.
Objective: Removal of poverty and attainment of self-reliance. Terminated by Janata
party in 1978.

SIXTH PLAN

Two sixth plans. One by the Janata Party during the period 1978-83.Focus on
enlargement of employment potential in agriculture and allied activities and
encouragement to small industry. The plan was rejected when Congress party came into
power. The objective changed to removal of poverty by expanding economy .

SEVENTH PLAN

Period: 1980-85 .Proposed Plan Outlay: Rs.158710 Crores .High levels of poverty and
inflation. Impact: Indian economy made good progress and most of the targets fixed
were realized. Aimed at a growth rate of 5.2 and achieved a growth rate of 5.7

EIGHTH PLAN

Period: 1992-97.Proposed Plan Outlay: Rs.871000 Crores .Situation: balance of payment

crisis, rising debt, budget deficits, mounting inflation and recession in industry.
Objective: Economic reforms accelerate growth and improve quality of life in common
man. Achieved an impressive growth rate of 6.8%

NINTH PLAN

Period: 1997-2002.To prioritize rural development. Generate Employment. To ensure

food and security. Provide basic Infrastructural facilities. Population Growth. Women
empowerment

TENTH PLAN

Period:2002-2007. To increase annual growth rate. Increase in per capita income at

6.4% p.a.Enhancement of human well being. Expansion of economic and social
opportunities for individuals.

ELEVENTH PLAN

Period:2007-2012.Towards faster and more inclusive growth. Economic & agricultural

growth .Poverty reduction. Forest Protection .Unemployment.

TWELFTH PLAN

Period:2012-2017.Proposed outlay - Rs. 2,75,000 crores.Sectors which will contribute to

higher GSDP

o Water Conservation
o Completion of irrigation projects
o Manufacturing
o Port, Rail & Air connectivity
o Quality urban infrastructure for growth of industry & service sector
ROLE OF TWELFT FIVE YEARS PLAN IN DIFFERENT: ECONOMIC GROWTH
In 12th five year plan, 9% GDP growth is expected. Higher investment and fund
mobilization will induce market development and employment.
Well regulated and integrated markets would generate enough jobs and live hood
opportunities. Development through efficient capital markets and public private
partnership will further boost the economy and thus may sustain the growth rate of 9 %.
Growth of a sector through PPP model would lead to decentralization of economies
and inclusion of various sectors, such that a parallel economic development is induced
from this multi- sectoral growth approach.
AGRICULTURE India is now self dependent for domestic food demands as a result
of green revolution and previous five year plans. Rural economy growth has to be
enhanced by sustained agriculture growth and development of rural areas by providing
rural infrastructure and amenities. A balanced regional development can be achieved
through agro- dependent sectors. Innovative technologies and open-market
economies would enhance HDI of rural population. For all perishable products
investments and institutional development are more important than subsidies or price
support systems. Forest economies and tribal societies need greater protection and
promotion
TRANSPORTATION In order to attain an overall growth urban governance, urban
renewal, finance and urban transportation reforms should be focused. Adequate
transport facilities would result in efficient distribution network, thereby reducing in
accessibility and consequently save the cost involved. Improved connectivity would also
help in managing urbanization and reduction of migration in metro cities, leading to
development of small and medium town. Energy efficient transport systems needs to
be incorporated with emphasis on eco-friendly and renewable resources.
ENVIRONMENT with the fast pace of industrialization, India is already loosing area
under forest cover rapidly. More human interventions will lead to severe loss of habitat.
Environmental degradation and ecological imbalance are the two aspects which result
out of development initiatives at local and global levels. Growth of economy without
compromising on environment is a key issue to be addressed as, sustainable growth is
essential now. Technological advancement, equitable distribution, affordability along
with public awareness is major points of concern.

DECENTRALIZATION Previous five years plans have faced the reluctance of

public participation. The 12th five year plan however talks about decentralization,
empowerment and information. The policy making process should trickles down to the
lowest level of society and more people should have a say in the process. Citizens
should be well informed and more powers should be given to the public to efficiently
convey the issues by letting people know their powers and rights.
TECHNOLOGY Globalization has led to rapid industrialization and competition in
the market. Technological and organizational innovation will help to enhance
productivity and efficiency. Technological innovations leads to faster results and
organizational innovation would help in efficient utilization of resources, facilitated by
providing incentives and tax subsidies.
HEALTH CARE Healthcare conditions are improving in the country but its
affordability and accessibility is still an area to be focused on. Curative and preventive
healthcare would help in increasing general quality of life. Focus on women and
children are essential but importance to elderly class and handicaps in order to achieve
inclusive healthcare development is essential. Shortage of qualified medical personnel
at all levels is a major hurdle in improving the outreach of the healthcare system,
especially the public health facilities
ENERGY Energy being the wheel of growth has to be focused to ensure faster and
inclusive growth. Dependency on traditional energy resources has to be reduced with
more emphasis on domestic renewable energy production. Use of Non Renewable
Sources of Energy being restricted to priority based industries while promoting NonConventional Energy Resources for rest of the sector. Nuclear power program must
continue, with necessary safety review. Active efforts need to be made to allay the
apprehensions of people regarding the safety of nuclear power plants. Solar mission is
seriously underfunded and requires more support. Wind power too requires greater
support, especially for off-shore locations which have not been sufficiently explored
EDUCATION Education being a concerned sector in five year plans has to be now
emphasized more on accessibility, affordability and quality. The employability is to be
increased for optimum exploitation of human resources. Improvement in educational
infrastructure, research and developments. Vocational education will need to be given
greater emphasis and made more attractive. Skill Development needs a major focus at
all levels.
CONCLUSION: The economy will enter the 12th plan period in an environment of
great promise but also one that presents major challenges. India has done well on the
growth front, but not so well on inclusion. Much of what needs to be done to accelerate
GDP growth to 9% so will be done by the private sector, but the central and state
governments have a crucial role to play in providing a policy environment that is seen as
investor friendly and is supportive of inclusive growth. Finally, the efficiency in
implementation of projects on the ground needs to be greatly improved.
Most of what needs to be done in this context rests with state governments but the
central government must find ways of improving project design, prioritizing resources to
fund well designed interventions that work, devolving resources to lower levels and

helping build capacity. Evidence-based evaluation is critical for redesign and

prioritization.