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All Five year plan at a glance (India)

Since Independence, the Indian economy has been premised on the concept of planning.

Five year plan at a glance:


Since Independence, the Indian economy has been premised on the concept of planning. This has been carried through the FiveYear Plans, developed, executed, and monitored by the Planning Commission. With the Prime Minister as the exofficio Chairman, the commission has a nominated Deputy Chairman, who holds the rank of a Cabinet Minister. The Eleventh Plan completed its term in March 2012 and the Twelfth Plan is currently underway.


·              History


FiveYear 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 handsoff approach to development. India launched its First FYP in 1951, immediately after independence under socialist influence of first Prime Minister Jawaharlal Nehru.



The First FiveYear Plan was one of the most important because it had 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. 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).


·             First Plan (19511956)


The first Indian Prime Minister, Pandit Jawaharlal Nehru presented the First FiveYear Plan to the Parliament of India and needed urgent attention. The First Fiveyear Plan was launched in 1951 which mainly focused in development of the agricultural sector. The First FiveYear Plan was based on the Harrod–Domar model.


The total planned budget of Rs.2069 crore was allocated to seven broad areas: irrigation and energy (27.2%), agriculture and community development (17.4%), transport and communications (24%), industry (8.4%), social services (16.64%), land rehabilitation (4.1%), and for other sectors and services (2.5%). 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 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 (WHO), 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 (UGC) 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 FiveYear Plan. The plan was quasi successful for the government.


·             Second Plan (19561961)


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 maximize longrun 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 Statistical 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 plants at Bhilai, Durgapur, and Rourkela were established. Coal production was increased. More railway lines were added in the north east. 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 FiveYear Plan in India was Rs.48 billion. This amount was allocated among various sectors: power and irrigation, social services, communications and transport, and miscellaneous.


The target growth rate was 4.5% and the actual growth rate was 4.27%.[6] 1956industrial policy


·             Third Plan (1961–1966)


The Third Fiveyear Plan stressed agriculture and improvement in the production of wheat, but the brief SinoIndian War of 1962 exposed weaknesses in the economy and shifted the focus towards the defence industry and the Indian Army. In 1965–1966, India fought a War with Pakistan. There was also a severe drought in 1965. The war led to inflation and the priority was shifted to price stabilization. The construction of dams 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 grass root 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 was 5.6%, but the actual growth rate was 2.4%.[6]


Due to miserable failure of the Third Plan the government was forced to declare "plan holidays" (from 1966–67, 1967–68, and 1968–69). Three annual plans were drawn during this intervening period. During 196667 there was again the problem of drought. Equal priority was given to agriculture, its allied activities, and industrial sector. The main reasons for plan holidays were the war, lack of resources, and increase in inflation.


·             Fourth Plan (1969–1974)


At this time Indira Gandhi 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 IndoPakistan War of 1971 and Bangladesh Liberation War took funds earmarked for industrial development. 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.


The target growth rate was 5.6%, but the actual growth rate was 3.3%.


·             Fifth Plan (1974–1979)


The Fifth FiveYear Plan laid stress on employment, poverty alleviation (GaribiHatao), and justice. The plan also focused on selfreliance in agricultural production and defence. In 1978 the newly elected Morarji Desai government rejected the plan. The Electricity Supply Act was amended in 1975, which enabled the central government to enter into power generation and transmission.


The Indian national highway system was introduced and many roads were widened to accommodate the increasing traffic. Tourism also expanded. It was followed from 1974 to 1979. It was mainly followed in Tamil Nadu by a protester Dhanya, who was a girl just studying 8th now had made the citizens of India to follow it and made all of them to know our rights.


The target growth rate was 4.4% and the actual growth rate was 5.0%.


·             Rolling Plan (1978–1980)


The Janata Party government rejected the Fifth FiveYear Plan and introduced a new Sixth Five Year Plan (19781983). This plan was again rejected by the Indian National Congress government in 1980 and a new Sixth Plan was made.


·             Sixth Plan (1980–1985)


The Sixth FiveYear Plan marked the beginning of economic liberalisation. 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 socialism.


Family planning was also expanded in order to prevent overpopulation. In contrast to China's strict and binding onechild 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.


The Sixth FiveYear Plan was a great success to the Indian economy. The target growth rate was 5.2% and the actual growth rate was 5.4%. The only FiveYear Plan which was done twice.


·             Seventh Plan (1985–1990)


The Seventh FiveYear Plan marked the comeback of the Congress Party to power. The plan laid stress on improving the productivity level of industries by upgrading of technology.


The main objectives of the Seventh FiveYear Plan were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment.


As an outcome of the Sixth FiveYear Plan, there had been steady growth in agriculture, controls on the rate of inflation, and favourable balance of payments which had provided a strong base for the Seventh FiveYear Plan to build on the need for further economic growth. The Seventh Plan had strived towards socialism and energy production at large. The thrust areas of the Seventh FiveYear Plan were:

social justice, removal of oppression of the weak, using modern technology, agricultural development, antipoverty programs, full supply of food, clothing, and shelter, increasing productivity of small and largescale farmers, and making India an independent economy.


Based on a 15year period of striving towards steady growth, the Seventh Plan was focused on achieving the prerequisites of selfsustaining growth by the year 2000. The plan expected the labour force to grow by 39 million people and employment was expected to grow at the rate of 4% per year.


Some of the expected outcomes of the Seventh FiveYear Plan India are given below:


Balance of payments (estimates): Export – 330 billion (US$5.5 billion), Imports – () 540 billion (US$9.0 billion), Trade Balance – ()210 billion (US$3.5 billion)


Merchandise exports (estimates): 606.53 billion (US$10.1 billion)


Merchandise imports (estimates): 954.37 billion (US$15.8 billion)


Projections for balance of payments: Export – 607 billion (US$10.1 billion), Imports – () 954 billion (US$15.8 billion), Trade Balance () 347 billion (US$5.8 billion)


Under the Seventh FiveYear Plan, India strove to bring about a selfsustained economy in the country with valuable contributions from voluntary agencies and the general populace.


The target growth rate was 5.0% and the actual growth rate was 6.01%.


·             Annual Plans (19901992)


The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre and the years 199091 and 199192 were treated as Annual Plans. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.


·             Eighth Plan (1992–1997)


1989–91 was a period of economic instability in India and hence no fiveyear plan was implemented. Between 1990 and 1992, there were only Annual Plans. In 1991, India faced a crisis in foreign exchange (forex) reserves, left with reserves of only about US$1 billion. Thus, under pressure, the country took the risk of reforming the socialist economy. P.V. NarasimhaRao was the ninth 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 (former 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, the 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 Panchayatirajs, Nagar Palikas, NGOs, 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%[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 investment 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 Plan (19972002)


The Ninth FiveYear Plan came after 50 years of Indian Independence. AtalBihari Vajpayee was the Prime Minister of India during the Ninth FiveYear Plan. The Ninth FiveYear Plan tried primarily to use the latent and unexplored economic potential of the country to promote economic and social growth. It offered strong support to the social spheres of the country in an effort to achieve the complete elimination of poverty. The satisfactory implementation of the Eighth FiveYear Plan also ensured the states' ability to proceed on the path of faster development. The Ninth FiveYear Plan also saw joint efforts from the public and the private sectors in ensuring economic development of the country. In addition, the Ninth FiveYear Plan saw contributions towards development from the general public as well as governmental agencies in both the rural and urban areas of the country. New implementation measures in the form of Special Action Plans (SAPs) were evolved during the Ninth Five Year Plan to fulfill targets within the stipulated time with adequate resources. The SAPs covered the areas of social infrastructure, agriculture, information technology and Water policy.




The Ninth FiveYear Plan had a total public sector plan outlay of 8,59,200crores. The Ninth FiveYear Plan also saw a hike of 48% in terms of plan expenditure and 33% in terms of the plan outlay in comparison to that of the Eighth FiveYear Plan. In the total outlay, the share of the centre was approximately 57% while it was 43% for the states and the union territories.


The Ninth FiveYear Plan focused on the relationship between the rapid economic growth and the quality of life for the people of the country. The prime focus of this plan was to increase growth in the country with an emphasis on social justice and equity. The Ninth FiveYear Plan placed considerable importance on combining growth oriented policies with the mission of achieving the desired objective of improving policies which would work towards the improvement of the poor in the country. The Ninth FiveYear Plan also aimed at correcting the historical inequalities which were still prevalent in the society.




The main objective of the Ninth FiveYear Plan was to correct historical inequalities and increase the economic growth in the country. Other aspects which constituted the Ninth FiveYear Plan were:


·     Population control.


·     Generating employment by giving priority to agriculture and rural development.Reduction of poverty.

·     Ensuring proper availability of food and water for the poor.


·     Availability of primary health care facilities and other basic necessities.


·     Primary education to all children in the country.


·     Empowering the socially disadvantaged classes like Scheduled castes, Scheduled tribes and other backward classes.


·     Developing selfreliance in terms of agriculture.


·     Acceleration in the growth rate of the economy with the help of stable prices.




·              Structural transformations and developments in the Indian economy.


·              New initiatives and initiation of corrective steps to meet the challenges in the economy of the country.


·              Efficient use of scarce resources to ensure rapid growth.


·              Combination of public and private support to increase employment.Enhancing high rates of export to achieve selfreliance.

·              Providing services like electricity, telecommunication, railways etc.


·              Special plans to empower the socially disadvantaged classes of the country.


·              Involvement and participation of Panchayati Raj institutions/bodies and Nagar Palikas in the development process.




·              The Ninth FiveYear Plan achieved a GDP growth rate of 5.4% against a target of 6.5%

·              The agriculture industry grew at a rate of 2.1% against the target of 4.2%

·              The industrial growth in the country was 4.5% which was higher than that of the target of 3%

·              The service industry had a growth rate of 7.8%.

·              An average annual growth rate of 6.7% was reached.




The Ninth FiveYear Plan looks through the past weaknesses in order to frame the new measures for the overall socioeconomic development of the country. However, for a wellplanned economy of any country, there should be a combined participation of the governmental agencies along with the general population of that nation. A combined effort of public, private, and all levels of government is essential for ensuring the growth of India's economy.


The target growth was 7.1% and the actual growth was 6.8%.


·             Tenth Plan (2002–2007)


The main objectives of the Tenth FiveYear Plan were:


Attain 8% GDP growth per year.


Reduction of poverty rate by 5% by 2007.


Providing gainful and highquality 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.

20point program was introduced.


Target growth: 8.1% growth achieved: 7.7%


Expenditure of 43,825 crores for tenth five years


·             Eleventh Plan (20072012)


Rapid and inclusive growth.


Emphasis on social sector and delivery of service therein.

Empowerment through education and skill development.

Reduction of gender inequality.

Environmental sustainability.

To increase the growth rate in agriculture, industry and services to 4%,10% and 9% respectively.


·             Twelfth Plan (2012–2017)


The Twelfth FiveYear Plan of the Government of India has decided for the growth rate at 8.2% but the National Development Council (NDC) on 27 Dec 2012 approved 8% growth rate for 12th five year plan.


Based on the recommendation of HLEG (High Level Expert Group) Report and other stakeholder consultations, the key elements of Twelfth Five Year plan strategy was outlined. The long term objective of this strategy was to establish a system of Universal Health Coverage (UHC) in the country. Following are the 12th plan period strategy: Substantial expansion and strengthening of public sector health care system, freeing the vulnerable population from dependence on high cost and often unreachable private sector health care system.


·              Health sector expenditure by central government and state government, both plan and non plan will have to be substantially increased by the twelfth five year plan. It was increased from 0.94 per cent of GDP in tenth plan to 1.04 per cent in eleventh plan. The provision of clean drinking water and sanitation as one of the principal factors in control of diseases is well established from the history of industrialized countries and it should have high priority in health related resource allocation. The expenditure on health should increase to 2.5 per cent of GDP by the end of Twelfth Five Year Plan.


·              Financial and managerial system will be redesigned to ensure efficient utilization of available resources and achieve better health outcome. Coordinated delivery of services within and across sectors, delegation matched with accountability, fostering a spirit of innovation are some of the measures proposed.



·              Increasing the cooperation between private and public sector health care providers to achieve health goals. This will include contracting in of services for gap filling, and various forms of effectively regulated and managed PublicPrivate Partnership, while also ensuring that there is no compromise in terms of standards of delivery and that the incentive structure does not undermine health care objectives.


·              The present RashtriyaSwasthyaBhimaYojana (RSBY) which provides cash less inpatient treatment through an insurance based system should be reformed to enable access to a continuum of comprehensive primary, secondary and tertiary care. In twelfth plan period entire Below Poverty Line(BPL) population will be covered through RSBY scheme. In planning health care structure for the future, it is desirable to move from a 'feeforservice' mechanism, to address the issue of fragmentation of services that works to the detriment of preventive and primary care and also to reduce the scope of fraud and induced demand.


·              In order to increase the availability of skilled human resources, a large expansion of medical schools, nursing colleges, and so on, is therefore is necessary and public sector medical schools must play a major role in the process. Special effort will be made to expand medical education in states which are underserved. In addition, a massive effort will be made to recruit and train paramedical and community level health workers.



·              The multiplicity of Central sector or Centrally Sponsored Schemes has constrained the flexibility of states to make need based plans or deploy their resources in the most efficient manner. The way forward is to focus on strengthening the pillars of the health system, so that it can prevent, detect and manage each of the unique challenges that different parts of the country face.


·              A series of prescription drugs reforms, promotion of essential, generic medicine and making these universally available free of cost to all patients in public facilities as a part of the Essential Health Package will be a priority.



·              Effective regulation in medical practice, public health, food and drugs is essential to safeguard people against risks and unethical practices. This is especially so given the information gaps in the health sector which make it difficult for individual to make reasoned choices.


·              The health system in the Twelfth Plan will continue to have a mix of public and private service providers. The public sector health services need to be strengthened to deliver both public health related and clinical services. The public and private sectors also need to coordinate for the delivery of a continuum of care. A strong regulatory system would supervise the quality of services delivered. Standard treatment guidelines should form the basis of clinical care across public and private sectors, with the adequate monitoring by the regulatory bodies to improve the quality and control the cost of care.


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