The National Planning Commission was set up in India in 1950. A major function of the Planning Commission was to 'formulate a plan for the most effective and balanced utilization of the country's resources'. The Planning Commission formulated the First Five Year Plan for the period (1951-56). Since then, we completed nine Five Year Plans and we are now in the midst of Tenth Five Year Plan (2002-2007).
The central objective of planning in India is to raise the standard of living of the people. Our Five Year Plans aim at increasing output. At the same time, they aim at reducing inequalities of income and wealth and providing equal opportunities for all. Growth with social justice is our basic goal.
The major objectives of developmental planning in India may be listed as follows:
1.To raise the national income. This is known as Growth Objective ;
2.To increase investment to a certain level within a given time ;
3.To reduce inequalities in the distribution of income and wealth and to reduce concentration of economic power over resources ;
4.To expand employment opportunities ; and
5.To remove bottlenecks in agriculture, manufacturing industry (especially capital goods) and the balance of payments. In the agricultural sector, the main objective was increasing agricultural productivity and attaining self-sufficiency in foodgrains. In the industrial sector, the emphasis was on basic and heavy industries. In the foreign trade sector, the emphasis was on having a 'viable balance of payments position'. The strategy adopted in Indian Planning is often referred to as 'Mahalanobis strategy'. In this strategy, emphasis was laid on rapid industrialization with priority for basic and heavy industries.
Though achieving regional balance is mentioned in our plans, we have not succeeded much in reducing regional imbalances. In agriculture, there are surplus states and deficit states, with reference to foodgrains. In manufacturing industry, there are advanced regions and backward regions. Not only that, industrial growth is concentrated in and around Mumbai, Kolkata and Chennai.
Our Five Year Plans pay attention to the problems of poverty and unemployment. The average Indian is among the poorest of the world. So, our Plans want to remove poverty and improve the lot of the common man and the weaker sections like SC/STs, OBCs, women and children. The standard of living depends upon per capita consumption and per capita consumption depends upon per capita income. And this in turn depends upon employment. So our plans have looked at employment as an integral part of the problem of the removal of poverty.
In the rural sector, there is concentration of land in the hands of a few persons even today. In spite of our land reform programmes, nearly 50 percent of agricultural land is owned by 10 percent of the population. And Green Revolution has helped largely big landlords. Even the ownership of industrial assets is concentrated. Of course, the basic causes of poverty in India are low agricultural productivity and rapid growth of population resulting in low savings and disguised unemployment.
The Government has not succeeded much in solving the problems of rural unemployment and underemployment by giving support to cottage and small scale industries.
There is an urban bias in Indian Planning. Agriculture did not receive enough funds in the past. But we cannot say the planners have neglected agriculture.
India began the process of planned economic development five decades back. The First Five Year (1951-56) stated that the purpose of planning in India was to initiate ' a process of development which will raise living standards and open out to the people new opportunities for a richer and more varied life'. The Second Five Year Plan (1956- 61) aimed at rapid industrialization with particular emphasis on the development of basic and heavy industries. It was during the Second Plan period, the Government embraced the goal of democratic socialism. The Third Five Year Plan aimed at self - reliant and self - generating economy. After the Third Plan, we had a 'Plan Holiday'. The Fourth Plan did not commence immediately after the Third Plan. We had three Annual Plans (1966-69). The Fourth Five Year Plan (1969 - 74) had two basic objectives:1. Growth with stability, and 2. Progressive achievement of self-reliance.
The Fifth Plan (1974-79) focused on growth with social justice. The slogan during the period was Garibi Hatao (Removal of Poverty). So, the two main objectives of the Fifth Plan were removal of poverty and attainment of self-reliance. When Janata Party was in power at Centre, it formulated the Sixth Plan (1978 - 83). But when the Congress came back to power, it discarded it and formulated a new sixth Five Year Plan (1980 - 85) . It aimed at a direct attack on poverty by creating conditions for an expanding economy. The Seventh Five Year Plan (1985-90) emphasized on accelerating agricultural growth in foodgrains production, increasing employment opportunities and raising productivity in all sectors. When the final version of the Eighth plan (1992 - 97) was formulated, there were major changes in our economic policy marked by liberalization, privatization and globalization. The Eighth Plan 1992 - 97 reflected these changes and aimed at accelerating economic growth and improving the quality of life of the common man.
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