Five-Year Plans of India
Encyclopedia
The economy of India
is based in part on planning
through its five-year plans, which are developed, executed and monitored by the Planning Commission. The tenth plan completed its term in March 2007 and the eleventh plan is currently underway. Prior to the fourth plan, the allocation of state resources was based on schematic patterns rather than a transparent and objective mechanism, which led to the adoption of the Gadgil formula
in 1969. Revised versions of the formula have been used since then to determine the allocation of central assistance for state plans.
presented the first five-year plan to the Parliament of India
on 8 December 1951. The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation. The agricultural sector was hit hardest by the partition of India
and needed urgent attention. The total planned budget of 206.8 billion (23.6 billion in the 1950 exchange rate
) was allocated to seven broad areas: irrigation
and energy
(27.2 percent), agriculture
and community development
(17.4 percent), transport
and communication
s (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 most important feature of this phase was active role of state in all economic sectors. Such a role was justified at that time because immediately after independence, India was facing basic problems—deficiency of capital and low capacity to save.
The target growth rate was 2.1% annual gross domestic product
(GDP) growth; the achieved growth rate was 3.6% The net domestic product
went up by 15%. The monsoon
was good and there were relatively high crop yield
s, 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.
At the end of the plan period in 1956, five Indian Institutes of Technology
(IITs) were started as major technical institutions. The University Grant Commission
was set up to take care of funding and take measures to strengthen the higher education in the country. Contracts were signed to start five steel plants, which came into existence in the middle of the second five-year plan.
. Unlike the First plan, which focused mainly on agriculture, domestic production of industrial products was encouraged in the Second plan, particularly in the development of the public sector
. 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 . It used the prevalent state of art techniques of operations research and optimization as well as the novel applications of statistical models developed at the Indian Statiatical Institute. The plan assumed a closed economy in which the main trading activity would be centered on importing capital goods.
Hydroelectric power
projects and five steel mills at Bhilai
, Durgapur, and Rourkela
were established. Coal
production was increased. More railway
lines were added in the north east.
The Atomic Energy Commission
was formed in 1948 with Homi J. Bhabha
as the first chairman. The Tata Institute of Fundamental Research
was established as a research institute. In 1957 a talent search and scholarship program was begun to find talented young students to train for work in nuclear power.
The total amount allocated under the second five year plan in India was Rs. 4,800 crore. This amount was allocated among various sectors:
Target Growth: 4.5% Actual Growth: 4.0%
exposed weaknesses in the economy and shifted the focus towards the Defence industry. In 1965-1966, India fought a war with Pakistan
. The war led to inflation and the priority was shifted to price stabilisation. The construction of dam
s continued. Many cement
and fertilizer
plants were also built. Punjab
began producing an abundance of wheat
.
Many primary schools
were started in rural areas. In an effort to bring democracy to the grassroot level, Panchayat elections were started and the states
were given more development responsibilities.
State electricity boards and state secondary education boards were formed. States were made responsible for secondary
and higher education
. State road transportation corporations were formed and local road building became a state responsibility. The target growth rate of GDP(gross domestic product)was 5.6 percent.The achieved growth rate was 2.4 percent.
was the Prime Minister
. The Indira Gandhi government nationalised
14 major Indian banks and the Green Revolution in India
advanced agriculture. In addition, the situation in East Pakistan
(now Bangladesh
) was becoming dire as the Indo-Pakistani War of 1971
and Bangladesh Liberation War
took place.
Funds earmarked for the industrial development had to be diverted for the war effort. India also performed the Smiling Buddha
underground nuclear test
in 1974, partially in response to the United States
deployment of the Seventh Fleet
in the Bay of Bengal
. The fleet had been deployed to warn India against attacking West Pakistan
and extending the war.
Target Growth: 5.7% Actual Growth: 3.30%
, poverty
alleviation, and justice
. The plan also focused on self-reliance
in agricultural production and defence. In 1978 the newly elected Morarji Desai
government rejected the plan.
Electricity Supply Act was enacted in 1975, which enabled the Central Government to enter into power generation and transmission.
The Indian national highway system
was introduced for the first time and many roads were widened to accommodate the increasing traffic
. Tourism
also expanded.
Target Growth: 4.4% Actual Growth: 5.0
. Price controls were eliminated and ration shops were closed. This led to an increase in food prices and an increase in the cost of living. This was the end of Nehruvian Plan and Rajiv Gandhi
was prime minister during this period.
Family planning
was also expanded in order to prevent overpopulation
. In contrast to China's strict and binding one-child policy
, Indian policy did not rely on the threat of force . More prosperous areas of India adopted family planning more rapidly than less prosperous areas, which continued to have a high birth rate
.
Target Growth: 5.2% Actual Growth: 5.4%
Party to power. The plan laid stress on improving the productivity level of industries by upgrading of technology.
The main objectives of the 7th five year plans were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment opportunities.
As an outcome of the sixth five year plan, there had been steady growth in agriculture, control on rate of Inflation, and favourable balance of payments which had provided a strong base for the seventh five Year plan to build on the need for further economic growth. The 7th Plan had strived towards socialism and energy production at large. The thrust areas of the 7th Five year plan have been enlisted below:
Based on a 15-year period of striving towards steady growth, the 7th Plan was focused on achieving the pre-requisites of self-sustaining growth by the year 2000. The Plan expected a growth in labour force of 39 million people and employment was expected to grow at the rate of 4 percent per year.
Some of the expected outcomes of the Seventh Five Year Plan India are given below:
Seventh Five Year Plan India strove to bring about a self-sustained economy in the country with valuable contributions from voluntary agencies and the general populace.
Target Growth: 5.0% Actual Growth: 5.7%
(Forex) reserves, left with reserves of only about 1 billion. Thus, under pressure, the country took the risk of reforming the socialist economy. P.V. Narasimha Rao was the twelfth Prime Minister of the Republic of India and head of Congress Party
, and led one of the most important administrations in India's modern history overseeing a major economic transformation and several incidents affecting national security. At that time Dr. Manmohan Singh
(currently, Prime Minister of India) launched India's free market reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of privatisation and liberalisation in India.
Modernization
of industries was a major highlight of the Eighth Plan. Under this plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt. Meanwhile India became a member of the World Trade Organization
on 1 January 1995.This plan can be termed as Rao and Manmohan model of Economic development.
The major objectives included, controlling population growth, poverty reduction, employment generation, strengthening the infrastructure, Institutional building,tourism management, Human Resource development, Involvement of Panchayat raj, Nagar Palikas, N.G.O'S and Decentralisation and people's participation.
Energy was given priority with 26.6% of the outlay.
An average annual growth rate of 6.78% against the target 5.6% was achieved.
To achieve the target of an average of 5.6% per annum, investment of 23.2% of the gross domestic product was required. The incremental capital ratio is 4.1.The saving for invetsment was to come from domestic sources and foreign sources,with the rate of domestic saving at 21.6% of gross domestic production and of foreign saving at 1.6% of gross domestic production.
Background of Ninth Five Year Plan India:
Ninth Five Year Plan was formulated amidst the backdrop of India's Golden jubilee of Independence.
The main objectives of the Ninth Five Year Plan of India are:
During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the target GDP growth of 6.5 per cent.
The sectoral growth rates broadly consistent with the 9% and 9.5% alternatives are presented in the table below. The 9% target requires a significant acceleration in growth in agriculture, electricity, gas, water supply and also manufacturing. Agricultural growth has always been an important component for inclusiveness in India, and recent experience suggests that high GDP growth without such agricultural growth is likely to lead to accelerating inflation in the country, which would jeopardise the larger growth process. However, even if such agricultural growth is achieved, it is unlikely that the agricultural sector will absorb additional workers. Thus, the main onus for providing additional jobs to the growing labour force will rest on manufacturing and construction and on the services sectors. The target set for the mining sector, mainly reflecting additional production of coal and natural gas, is also very demanding, but is necessary to meet the primary energy requirements without resorting to excessive imports.
As shown in the table below, taking the growth rate to 9.5% would require much faster growth in the manufacturing, as well as in electricity, gas and water supply sectors. The feasibility of achieving such large acceleration in key sectoral performance needs to be considered carefully before the growth targets for the Twelfth Plan are fixed. This is particularly true for the energy sector where supply constraints could be severe.
Particularly importance have to be given to the needs of the SC/ST and OBC population, women and children (as minorities) and other excluded groups. In order to achieve inclusiveness in all these sectors requires multiple interventions, and its success depends not only on introducing new policies and government programmes, but also on institutional and attitudinal changes, which are highly time consuming.
Economy of India
The Economy of India is the ninth largest in the world by nominal GDP and the fourth largest by purchasing power parity . The country is a part of the G-20 major economies and the BRICS, in addition to being partners of the ASEAN. India has a per capita GDP of $3,608 as per 2010 figures, making it...
is based in part on planning
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
through its five-year plans, which are developed, executed and monitored by the Planning Commission. The tenth plan completed its term in March 2007 and the eleventh plan is currently underway. Prior to the fourth plan, the allocation of state resources was based on schematic patterns rather than a transparent and objective mechanism, which led to the adoption of the Gadgil formula
Gadgil formula
-Introduction:The Gadgil formula is due to D.R. Gadgil, the social scientist and the first critic of Indian Planning. It was evolved in 1969 for determining the allocation of central assistance for state plans in India...
in 1969. Revised versions of the formula have been used since then to determine the allocation of central assistance for state plans.
First Five-Year Plan (1951-1956)
The first Indian Prime Minister, Jawaharlal NehruJawaharlal Nehru
Jawaharlal Nehru , often referred to with the epithet of Panditji, was an Indian statesman who became the first Prime Minister of independent India and became noted for his “neutralist” policies in foreign affairs. He was also one of the principal leaders of India’s independence movement in the...
presented the first five-year plan to the Parliament of India
Parliament of India
The Parliament of India is the supreme legislative body in India. Founded in 1919, the Parliament alone possesses legislative supremacy and thereby ultimate power over all political bodies in India. The Parliament of India comprises the President and the two Houses, Lok Sabha and Rajya Sabha...
on 8 December 1951. The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation. The agricultural sector was hit hardest by the partition of India
Partition of India
The Partition of India was the partition of British India on the basis of religious demographics that led to the creation of the sovereign states of the Dominion of Pakistan and the Union of India on 14 and 15...
and needed urgent attention. The total planned budget of 206.8 billion (23.6 billion in the 1950 exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...
) was allocated to seven broad areas: irrigation
Irrigation
Irrigation may be defined as the science of artificial application of water to the land or soil. It is used to assist in the growing of agricultural crops, maintenance of landscapes, and revegetation of disturbed soils in dry areas and during periods of inadequate rainfall...
and energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
(27.2 percent), agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
and community development
Community development
Community development is a broad term applied to the practices and academic disciplines of civic leaders, activists, involved citizens and professionals to improve various aspects of local communities....
(17.4 percent), transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
and communication
Communication
Communication is the activity of conveying meaningful information. Communication requires a sender, a message, and an intended recipient, although the receiver need not be present or aware of the sender's intent to communicate at the time of communication; thus communication can occur across vast...
s (24 percent), industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
(8.4 percent), social services (16.64 percent), land rehabilitation
Land rehabilitation
Land rehabilitation is the process of returning the land in a given area to some degree of its former state, after some process has resulted in its damage...
(4.1 percent),
and for other sectors and services (2.5 percent). The most important feature of this phase was active role of state in all economic sectors. Such a role was justified at that time because immediately after independence, India was facing basic problems—deficiency of capital and low capacity to save.
The target growth rate was 2.1% annual gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(GDP) growth; the achieved growth rate was 3.6% The net domestic product
Net domestic product
The net domestic product equals the gross domestic product minus depreciation on a country's capital goods.Net domestic product accounts for capital that has been consumed over the year in the form of housing, vehicle, or machinery deterioration...
went up by 15%. The monsoon
Monsoon
Monsoon is traditionally defined as a seasonal reversing wind accompanied by corresponding changes in precipitation, but is now used to describe seasonal changes in atmospheric circulation and precipitation associated with the asymmetric heating of land and sea...
was good and there were relatively high crop yield
Crop yield
In agriculture, crop yield is not only a measure of the yield of cereal per unit area of land under cultivation, yield is also the seed generation of the plant itself...
s, boosting exchange reserves and the per capita income
Per capita income
Per capita income or income per person is a measure of mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate and dividing it by the total population...
, which increased by 8%. National income increased more than the per capita income due to rapid population growth
Population growth
Population growth is the change in a population over time, and can be quantified as the change in the number of individuals of any species in a population using "per unit time" for measurement....
. Many irrigation projects were initiated during this period, including the Bhakra Dam
Bhakra Dam
Bhakra Dam is a concrete gravity dam across the Sutlej River, and is near the border between Punjab and Himachal Pradesh in northern India.The dam, located at a gorge near the upstream Bhakra village in Bilaspur district of Himachal Pradesh, is Asia's second highest at 225.55 m high next to...
and Hirakud Dam
Hirakud Dam
Hirakud Dam is built across the Mahanadi River, about 15 km from Sambalpur in the state of Orissa in India. Built in 1957, the dam is one of the world's longest earthen dam....
. The World Health Organization
World Health Organization
The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...
, with the Indian government, addressed children's health and reduced infant mortality
Infant mortality
Infant mortality is defined as the number of infant deaths per 1000 live births. Traditionally, the most common cause worldwide was dehydration from diarrhea. However, the spreading information about Oral Re-hydration Solution to mothers around the world has decreased the rate of children dying...
, indirectly contributing to population growth.
At the end of the plan period in 1956, five Indian Institutes of Technology
Indian Institutes of Technology
The Indian Institutes of Technology are a group of autonomous engineering and technology-oriented institutes of higher education. The IITs are governed by the Institutes of Technology Act, 1961 which has declared them as “institutions of national importance”, and lays down their powers, duties,...
(IITs) were started as major technical institutions. The University Grant Commission
University Grants Commission (India)
The University Grants Commission of India is a statutory organisation set up by Union government in 1956, for the coordination, determination and maintenance of standards of university education. It provides recognition for universities in India, and provides funds for government-recognised...
was set up to take care of funding and take measures to strengthen the higher education in the country. Contracts were signed to start five steel plants, which came into existence in the middle of the second five-year plan.
Second Five-Year Plan (1956–1961)
The second five-year plan focused on industry, especially heavy industryHeavy industry
Heavy industry does not have a single fixed meaning as compared to light industry. It can mean production of products which are either heavy in weight or in the processes leading to their production. In general, it is a popular term used within the name of many Japanese and Korean firms, meaning...
. Unlike the First plan, which focused mainly on agriculture, domestic production of industrial products was encouraged in the Second plan, particularly in the development of the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...
. The plan followed the Mahalanobis model
Mahalanobis model
The Mahalanobis model is a model of economic development, created by Indian statistician Prasanta Chandra Mahalanobis in 1953. Mahalanobis became essentially the key economist of India's Second Five Year Plan, becoming subject to much of India's most dramatic economic debates.-The...
, an economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
model developed by the Indian statistician
Statistician
A statistician is someone who works with theoretical or applied statistics. The profession exists in both the private and public sectors. The core of that work is to measure, interpret, and describe the world and human activity patterns within it...
Prasanta Chandra Mahalanobis
Prasanta Chandra Mahalanobis
Prasanta Chandra Mahalanobis FRS was an Indian scientist and applied statistician. He is best remembered for the Mahalanobis distance, a statistical measure. He made pioneering studies in anthropometry in India...
in 1953. The plan attempted to determine the optimal allocation of investment between productive sectors in order to maximise long-run economic growth . It used the prevalent state of art techniques of operations research and optimization as well as the novel applications of statistical models developed at the Indian Statiatical Institute. The plan assumed a closed economy in which the main trading activity would be centered on importing capital goods.
Hydroelectric power
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
projects and five steel mills at Bhilai
Bhilai
Bhilai or Bhilai Nagar is a city in the Durg district of Chhattisgarh, in eastern central India. As of 2001, it had a population of 753,837. The city is located west of the capital Raipur, on the main Howrah–Mumbai rail line, and National Highway 6...
, Durgapur, and Rourkela
Rourkela
Rourkela is located in the northwestern tip of the Indian state of Orissa at the heart of a rich mineral belt. It is situated about north of state capital Bhubaneswar.It is surrounded by a range of hills and encircled by rivers. One of the largest steel plants of the Steel Authority of India...
were established. Coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
production was increased. More railway
Rail transport
Rail transport is a means of conveyance of passengers and goods by way of wheeled vehicles running on rail tracks. In contrast to road transport, where vehicles merely run on a prepared surface, rail vehicles are also directionally guided by the tracks they run on...
lines were added in the north east.
The Atomic Energy Commission
Atomic Energy Commission of India
The Atomic Energy Commission is a governing body functioning under the Department of Atomic Energy , Government of India. The DAE is under the direct charge of the Prime Minister.- History :...
was formed in 1948 with Homi J. Bhabha
Homi J. Bhabha
Homi Jehangir Bhabha, FRS was an Indian nuclear physicist and the chief architect of the Indian atomic energy program...
as the first chairman. The Tata Institute of Fundamental Research
Tata Institute of Fundamental Research
The Tata Institute of Fundamental Research is a research institution in India dedicated to basic research in mathematics and the sciences. It is a Deemed University and works under the umbrella of the Department of Atomic Energy of the Government of India. It is located at Navy Nagar, Colaba, Mumbai...
was established as a research institute. In 1957 a talent search and scholarship program was begun to find talented young students to train for work in nuclear power.
The total amount allocated under the second five year plan in India was Rs. 4,800 crore. This amount was allocated among various sectors:
- Community and agriculture development
- Power and irrigation
- Social services
- Communications and transport
- Miscellaneous
Target Growth: 4.5% Actual Growth: 4.0%
Third Five-Year Plan (1961–1966)
The third plan stressed on agriculture and improving production of wheat, but the brief Sino-Indian War of 1962Sino-Indian War
The Sino-Indian War , also known as the Sino-Indian Border Conflict , was a war between China and India that occurred in 1962. A disputed Himalayan border was the main pretext for war, but other issues played a role. There had been a series of violent border incidents after the 1959 Tibetan...
exposed weaknesses in the economy and shifted the focus towards the Defence industry. In 1965-1966, India fought a war with Pakistan
Indo-Pakistani War of 1965
The Indo-Pakistani War of 1965 was a culmination of skirmishes that took place between April 1965 and September 1965 between Pakistan and India. This conflict became known as the Second Kashmir War fought by India and Pakistan over the disputed region of Kashmir, the first having been fought in 1947...
. The war led to inflation and the priority was shifted to price stabilisation. The construction of dam
Dam
A dam is a barrier that impounds water or underground streams. Dams generally serve the primary purpose of retaining water, while other structures such as floodgates or levees are used to manage or prevent water flow into specific land regions. Hydropower and pumped-storage hydroelectricity are...
s continued. Many cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
and fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
plants were also built. Punjab
Punjab (India)
Punjab ) is a state in the northwest of the Republic of India, forming part of the larger Punjab region. The state is bordered by the Indian states of Himachal Pradesh to the east, Haryana to the south and southeast and Rajasthan to the southwest as well as the Pakistani province of Punjab to the...
began producing an abundance of wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
.
Many primary schools
Primary education
A primary school is an institution in which children receive the first stage of compulsory education known as primary or elementary education. Primary school is the preferred term in the United Kingdom and many Commonwealth Nations, and in most publications of the United Nations Educational,...
were started in rural areas. In an effort to bring democracy to the grassroot level, Panchayat elections were started and the states
States and territories of India
India is a federal union of states comprising twenty-eight states and seven union territories. The states and territories are further subdivided into districts and so on.-List of states and territories:...
were given more development responsibilities.
State electricity boards and state secondary education boards were formed. States were made responsible for secondary
Secondary education
Secondary education is the stage of education following primary education. Secondary education includes the final stage of compulsory education and in many countries it is entirely compulsory. The next stage of education is usually college or university...
and higher education
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
. State road transportation corporations were formed and local road building became a state responsibility. The target growth rate of GDP(gross domestic product)was 5.6 percent.The achieved growth rate was 2.4 percent.
Fourth Five-Year Plan (1969–1974)
At this time Indira GandhiIndira Gandhi
Indira Priyadarshini Gandhara was an Indian politician who served as the third Prime Minister of India for three consecutive terms and a fourth term . She was assassinated by Sikh extremists...
was the Prime Minister
Prime Minister of India
The Prime Minister of India , as addressed to in the Constitution of India — Prime Minister for the Union, is the chief of government, head of the Council of Ministers and the leader of the majority party in parliament...
. The Indira Gandhi government nationalised
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
14 major Indian banks and the Green Revolution in India
Green Revolution in India
The introduction of high-yielding varieties of seeds and the increased use of fertilizers and irrigation are known collectively as the Green Revolution, which provided the increase in production needed to make India self-sufficient in food grains, thus improving agriculture in India...
advanced agriculture. In addition, the situation in East Pakistan
East Pakistan
East Pakistan was a provincial state of Pakistan established in 14 August 1947. The provincial state existed until its declaration of independence on 26 March 1971 as the independent nation of Bangladesh. Pakistan recognized the new nation on 16 December 1971. East Pakistan was created from Bengal...
(now Bangladesh
Bangladesh
Bangladesh , officially the People's Republic of Bangladesh is a sovereign state located in South Asia. It is bordered by India on all sides except for a small border with Burma to the far southeast and by the Bay of Bengal to the south...
) was becoming dire as the Indo-Pakistani War of 1971
Indo-Pakistani War of 1971
The Indo-Pakistani War of 1971 was a military conflict between India and Pakistan. Indian, Bangladeshi and international sources consider the beginning of the war to be Operation Chengiz Khan, Pakistan's December 3, 1971 pre-emptive strike on 11 Indian airbases...
and Bangladesh Liberation War
Bangladesh Liberation War
The Bangladesh Liberation War was an armed conflict pitting East Pakistan and India against West Pakistan. The war resulted in the secession of East Pakistan, which became the independent nation of Bangladesh....
took place.
Funds earmarked for the industrial development had to be diverted for the war effort. India also performed the Smiling Buddha
Smiling Buddha
The Smiling Buddha, formally designated as Pokhran-I, was the codename given to Republic of India's first nuclear test explosion that took place at the long-constructed Indian Army base, Pokhran Test Range at Pokhran municipality, Rajasthan state on 18 May 1974 at 8:05 a.m....
underground nuclear test
Underground nuclear testing
Underground nuclear testing refers to test detonations of nuclear weapons that are performed underground. When the device being tested is buried at sufficient depth, the explosion may be contained, with no release of radioactive materials to the atmosphere....
in 1974, partially in response to the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
deployment of the Seventh Fleet
United States Seventh Fleet
The Seventh Fleet is the United States Navy's permanent forward projection force based in Yokosuka, Japan, with units positioned near Japan and South Korea. It is a component fleet force under the United States Pacific Fleet. At present, it is the largest of the forward-deployed U.S. fleets, with...
in the Bay of Bengal
Bay of Bengal
The Bay of Bengal , the largest bay in the world, forms the northeastern part of the Indian Ocean. It resembles a triangle in shape, and is bordered mostly by the Eastern Coast of India, southern coast of Bangladesh and Sri Lanka to the west and Burma and the Andaman and Nicobar Islands to the...
. The fleet had been deployed to warn India against attacking West Pakistan
West Pakistan
West Pakistan , common name West-Pakistan , in the period between its establishment on 22 November 1955 to disintegration on December 16, 1971. This period, during which, Pakistan was divided, ended when East-Pakistan was disintegrated and succeeded to become which is now what is known as Bangladesh...
and extending the war.
Target Growth: 5.7% Actual Growth: 3.30%
Fifth Five-Year Plan (1974–1979)
Stress was laid on employmentEmployment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
, poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
alleviation, and justice
Justice
Justice is a concept of moral rightness based on ethics, rationality, law, natural law, religion, or equity, along with the punishment of the breach of said ethics; justice is the act of being just and/or fair.-Concept of justice:...
. The plan also focused on self-reliance
Self-Reliance
Self-Reliance is an essay written by American Transcendentalist philosopher and essayist, Ralph Waldo Emerson. It contains the most thorough statement of one of Emerson's repeating themes, the need for each individual to avoid conformity and false consistency, and follow his or her own instincts...
in agricultural production and defence. In 1978 the newly elected Morarji Desai
Morarji Desai
Morarji Ranchhodji Desai was an Indian independence activist and the fourth Prime Minister of India from 1977–79. He was the first Indian Prime Minister who did not belong to the Indian National Congress...
government rejected the plan.
Electricity Supply Act was enacted in 1975, which enabled the Central Government to enter into power generation and transmission.
The Indian national highway system
Indian highways
The National Highways Network of India, is a network of highways that is managed and maintained by agencies of the Government of India. These highways measured over as of 2010, including over of limited-access Expressways....
was introduced for the first time and many roads were widened to accommodate the increasing traffic
Traffic
Traffic on roads may consist of pedestrians, ridden or herded animals, vehicles, streetcars and other conveyances, either singly or together, while using the public way for purposes of travel...
. Tourism
Tourism in India
Tourism in India is the largest service industry, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India. India witnesses more than 5.5 million annual foreign tourist arrivals and 740 million domestic tourism visits...
also expanded.
Target Growth: 4.4% Actual Growth: 5.0
Sixth Five-Year Plan (1980–1985)
The sixth plan also marked the beginning of economic liberalizationEconomic liberalization
Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with classical liberalism...
. Price controls were eliminated and ration shops were closed. This led to an increase in food prices and an increase in the cost of living. This was the end of Nehruvian Plan and Rajiv Gandhi
Rajiv Gandhi
Rajiv Ratna Gandhi was the sixth Prime Minister of India . He took office after his mother's assassination on 31 October 1984; he himself was assassinated on 21 May 1991. He became the youngest Prime Minister of India when he took office at the age of 40.Rajiv Gandhi was the elder son of Indira...
was prime minister during this period.
Family planning
Family planning
Family planning is the planning of when to have children, and the use of birth control and other techniques to implement such plans. Other techniques commonly used include sexuality education, prevention and management of sexually transmitted infections, pre-conception counseling and...
was also expanded in order to prevent overpopulation
Overpopulation
Overpopulation is a condition where an organism's numbers exceed the carrying capacity of its habitat. The term often refers to the relationship between the human population and its environment, the Earth...
. In contrast to China's strict and binding one-child policy
One-child policy
The one-child policy refers to the one-child limitation applying to a minority of families in the population control policy of the People's Republic of China . The Chinese government refers to it under the official translation of family planning policy...
, Indian policy did not rely on the threat of force . More prosperous areas of India adopted family planning more rapidly than less prosperous areas, which continued to have a high birth rate
Birth rate
Crude birth rate is the nativity or childbirths per 1,000 people per year . Another word used interchangeably with "birth rate" is "natality". When the crude birth rate is subtracted from the crude death rate, it reveals the rate of natural increase...
.
Target Growth: 5.2% Actual Growth: 5.4%
Seventh Five-Year Plan (1985–1990)
The Seventh Plan marked the comeback of the CongressIndian National Congress
The Indian National Congress is one of the two major political parties in India, the other being the Bharatiya Janata Party. It is the largest and one of the oldest democratic political parties in the world. The party's modern liberal platform is largely considered center-left in the Indian...
Party to power. The plan laid stress on improving the productivity level of industries by upgrading of technology.
The main objectives of the 7th five year plans were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment opportunities.
As an outcome of the sixth five year plan, there had been steady growth in agriculture, control on rate of Inflation, and favourable balance of payments which had provided a strong base for the seventh five Year plan to build on the need for further economic growth. The 7th Plan had strived towards socialism and energy production at large. The thrust areas of the 7th Five year plan have been enlisted below:
- Social Justice
- Removal of oppression of the weak
- Using modern technology
- Agricultural development
- Anti-poverty programs
- Full supply of food, clothing, and shelter
- Increasing productivity of small and large scale farmers
- Making India an Independent Economy
Based on a 15-year period of striving towards steady growth, the 7th Plan was focused on achieving the pre-requisites of self-sustaining growth by the year 2000. The Plan expected a growth in labour force of 39 million people and employment was expected to grow at the rate of 4 percent per year.
Some of the expected outcomes of the Seventh Five Year Plan India are given below:
- Balance of Payments (estimates): Export - , Imports - (-), Trade Balance - (-)
- Merchandise exports (estimates):
- Merchandise imports (estimates):
- Projections for Balance of Payments: Export - , Imports - (-) , Trade Balance- (-)
Seventh Five Year Plan India strove to bring about a self-sustained economy in the country with valuable contributions from voluntary agencies and the general populace.
Target Growth: 5.0% Actual Growth: 5.7%
Eighth Five-Year Plan (1992–1997)
1989-91 was a period of economic instability in India and hence no five year plan was implemented. Between 1990 and 1992, there were only Annual Plans. In 1991, India faced a crisis in Foreign ExchangeForeign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
(Forex) reserves, left with reserves of only about 1 billion. Thus, under pressure, the country took the risk of reforming the socialist economy. P.V. Narasimha Rao was the twelfth Prime Minister of the Republic of India and head of Congress Party
Indian National Congress
The Indian National Congress is one of the two major political parties in India, the other being the Bharatiya Janata Party. It is the largest and one of the oldest democratic political parties in the world. The party's modern liberal platform is largely considered center-left in the Indian...
, and led one of the most important administrations in India's modern history overseeing a major economic transformation and several incidents affecting national security. At that time Dr. Manmohan Singh
Manmohan Singh
Manmohan Singh is the 13th and current Prime Minister of India. He is the only Prime Minister since Jawaharlal Nehru to return to power after completing a full five-year term. A Sikh, he is the first non-Hindu to occupy the office. Singh is also the 7th Prime Minister belonging to the Indian...
(currently, Prime Minister of India) launched India's free market reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of privatisation and liberalisation in India.
Modernization
Modernization
In the social sciences, modernization or modernisation refers to a model of an evolutionary transition from a 'pre-modern' or 'traditional' to a 'modern' society. The teleology of modernization is described in social evolutionism theories, existing as a template that has been generally followed by...
of industries was a major highlight of the Eighth Plan. Under this plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt. Meanwhile India became a member of the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
on 1 January 1995.This plan can be termed as Rao and Manmohan model of Economic development.
The major objectives included, controlling population growth, poverty reduction, employment generation, strengthening the infrastructure, Institutional building,tourism management, Human Resource development, Involvement of Panchayat raj, Nagar Palikas, N.G.O'S and Decentralisation and people's participation.
Energy was given priority with 26.6% of the outlay.
An average annual growth rate of 6.78% against the target 5.6% was achieved.
To achieve the target of an average of 5.6% per annum, investment of 23.2% of the gross domestic product was required. The incremental capital ratio is 4.1.The saving for invetsment was to come from domestic sources and foreign sources,with the rate of domestic saving at 21.6% of gross domestic production and of foreign saving at 1.6% of gross domestic production.
Ninth Five-Year Plan (1997–2002)
Ninth Five Year Plan India runs through the period from 1997 to 2002 with the main aim of attaining objectives like speedy industrialization, human development, full-scale employment, poverty reduction, and self-reliance on domestic resources.Background of Ninth Five Year Plan India:
Ninth Five Year Plan was formulated amidst the backdrop of India's Golden jubilee of Independence.
The main objectives of the Ninth Five Year Plan of India are:
- 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
During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the target GDP growth of 6.5 per cent.
Tenth Five-Year Plan (2002–2007)
- Attain 8% GDP growth per year.
- 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;*All children in India in school by 2003; all children to complete 5 years of schooling by 2007.
- Reduction in gender gaps in literacy and wage rates by at least 50% by 2007;*Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2%;*Increase in Literacy Rates to 75 per cent within the Tenth Plan period (2002 - 2007)
Eleventh Five-Year Plan (2007–2012)
The eleventh plan has the following objectives:- Income & Poverty
- Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016-17
- Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits
- Create 70 million new work opportunities.
- Reduce educated unemployment to below 5%.
- Raise real wage rate of unskilled workers by 20 percent.
- Reduce the headcount ratio of consumption poverty by 10 percentage points.
- Education
- Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12
- Develop minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality
- Increase literacy rate for persons of age 7 years or above to 85%
- Lower gender gap in literacy to 10 percentage point
- Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the plan
- Health
- Reduce infant mortality rate to 28 and maternal mortality ratioMaternal deathMaternal death, or maternal mortality, also "obstetrical death" is the death of a woman during or shortly after a pregnancy. In 2010, researchers from the University of Washington and the University of Queensland in Brisbane, Australia, estimated global maternal mortality in 2008 at 342,900 , of...
to 1 per 1000 live births - Reduce Total Fertility RateTotal Fertility RateThe total fertility rate of a population is the average number of children that would be born to a woman over her lifetime if she were to experience the exact current age-specific fertility rates through her lifetime, and she...
to 2.1 - Provide clean drinking water for all by 2009 and ensure that there are no slip-backs
- Reduce malnutritionMalnutritionMalnutrition is the condition that results from taking an unbalanced diet in which certain nutrients are lacking, in excess , or in the wrong proportions....
among children of age group 0-3 to half its present level - Reduce anaemia among women and girls by 50% by the end of the plan
- Reduce infant mortality rate to 28 and maternal mortality ratio
- Women and Children
- 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 percent of the direct and indirect beneficiaries of all government schemes are women and girl children
- Ensure that all children enjoy a safe childhood, without any compulsion to work
- Infrastructure
- Ensure electricity connection to all villages and BPLPoverty thresholdThe poverty threshold, or poverty line, is the minimum level of income deemed necessary to achieve an adequate standard of living in a given country...
households by 2009 and round-the-clock power. - 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
- Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016-17
- Ensure electricity connection to all villages and BPL
- Environment
- Increase forest and tree cover by 5 percentage points.
- Attain WHOWhoWho may refer to:* Who , an English-language pronoun* who , a Unix command* Who?, one of the Five Ws in journalism- Art and entertainment :* Who? , a 1958 novel by Algis Budrys...
standards of air quality in all major cities by 2011-12. - Treat all urban waste water by 2011-12 to clean river waters.
- Increase energy efficiency by 20 percentage points by 2016-17.
Approach to the Twelfth Five-Year Plan (2012-2017)
The Planning Commission has two alternative targets for economic growth in the Twelfth Plan. The first being a repetition of the previous Plan target of 9% growth, that is yet to be achieved. The second is, however an even higher target of 9.5% average growth for the Twelfth Five Year Plan. Numerous macro‐economic techniques have been used to examine the feasibility of these targets in terms of internal consistencies and inter‐sectoral balances.The sectoral growth rates broadly consistent with the 9% and 9.5% alternatives are presented in the table below. The 9% target requires a significant acceleration in growth in agriculture, electricity, gas, water supply and also manufacturing. Agricultural growth has always been an important component for inclusiveness in India, and recent experience suggests that high GDP growth without such agricultural growth is likely to lead to accelerating inflation in the country, which would jeopardise the larger growth process. However, even if such agricultural growth is achieved, it is unlikely that the agricultural sector will absorb additional workers. Thus, the main onus for providing additional jobs to the growing labour force will rest on manufacturing and construction and on the services sectors. The target set for the mining sector, mainly reflecting additional production of coal and natural gas, is also very demanding, but is necessary to meet the primary energy requirements without resorting to excessive imports.
As shown in the table below, taking the growth rate to 9.5% would require much faster growth in the manufacturing, as well as in electricity, gas and water supply sectors. The feasibility of achieving such large acceleration in key sectoral performance needs to be considered carefully before the growth targets for the Twelfth Plan are fixed. This is particularly true for the energy sector where supply constraints could be severe.
| Sl. no. | Sectors | 9% Target | 9.5% Target |
|---|---|---|---|
| 1 | Agriculture, Forestry & Fishing | 4.0 | 4.2 |
| 2 | Mining & Quarrying | 8.0 | 8.5 |
| 3 | Manufacturing | 9.8 | 11.5 |
| 4 | Elect. Gas & Water Supply | 8.5 | 9.0 |
| 5 | Construction | 10.0 | 11.0 |
| 6 | Transport, Communication & Storage and Tourism | 11.0 | 11.2 |
| 7 | Financing, Insurance, Real Estate & Business Services | 10.0 | 10.5 |
| 8 | Community, Social & Personal Services | 8.0 | 8.0 |
| TOTAL GDP | 9.0 | 9.5 | |
| Industry | 9.6 | 10.9 | |
| Service | 10.0 | 10.0 |
Inclusive Growth
The progress towards inclusiveness in growth and development is the most difficult to assess, because inclusiveness is a multi‐dimensional concept. The result of inclusive growth should be a reduction in the incidence of poverty, significant improvement in health outcomes, universal access for children to school, increased access to higher education and improved standards of education, including skill development. There should also be an improvement in employment opportunities, increase in wage rates, betterment in livelihoods and improvement in provision of basic amenities like water, electricity, roads, sanitation and housing.Particularly importance have to be given to the needs of the SC/ST and OBC population, women and children (as minorities) and other excluded groups. In order to achieve inclusiveness in all these sectors requires multiple interventions, and its success depends not only on introducing new policies and government programmes, but also on institutional and attitudinal changes, which are highly time consuming.