PLANNING IN INDIA : PLANNING IN INDIA BY: UMANG GOEL
BHABHA GROUP OF INSTITUTIONS Slide 2: Planning Process in India: The planning process in India has both a hierarchic and interactive character since we operate within the framework of a federal democratic political structure.
The plan, as it is formulated, has three distinctive components:
A long term perspective plan
A five year plan
Perspective Plan: The main purpose is to indicate the desired directions of economic activities to serve as pointers in formulating the operational targets that go into five year plans. Slide 3: The perspective plan formulated along two principal lines:
(a) the part that deals with the overall strategy; also indicates the magnitude and type of resource mobilization that will be called for as well as with the question of external financing that may be necessary.
(b) The other and more detailed part dealing with projected developments in a number of key sectors of the economy which have significant backward and forward linkages. Once, key sectors are laid, the perspective plan also tries to indicate a certain time phasing of activities that will be called for if these objectives are to be realized. Slide 4: Δ Five year plan: That is the plan document constructed on the basis of recommendations made by a large number of working groups which deal with the major sector of economic activities.
Lays down broad strategies, objectives, growth rate, sectoral targets, etc.
Because of our federal nature, every five year plan has :
A central component
A state component (social services, agriculture, irrigation, infrastructural activities such as power, roads etc. figure prominently in state component).
Annual Plan: That is the important operational instrument of the five year plans. It provides an occasion for stocktaking and assessing progress of the plan from year to year. Slide 5: India’s leaders adopted the principles of formal economic planning after independence as an effective way to intervene in the economy to foster growth and social justice.
The planning commission was established in 1950.
Responsible only to the Prime minister, the commission is independent of the cabinet.
A staff drafts national plans under the guidance of the commission; draft plans are presented for approval to the National Development Council, which consist of the planning commission and the chief ministers of the states. Slide 6: The council can make changes to the draft plan.
After the council's approval, the draft is presented to the cabinet and subsequently to parliament, whose approval makes the plan an operating document for central and state government. ORGANIZATION OF THE PLANNING COMMISSION : The Prime Minister is the chairman of the Planning Commission, which works under the overall guidance of the NDC.
The deputy chairman and the full time members of the commission, as a composite body, provide advice and guidance to the subject divisions for the formulation of five year plans, annual plans, state plans, monitoring plan progress. ORGANIZATION OF THE PLANNING COMMISSION Slide 8: The planning commission functions through several divisions, each headed by a senior officer (as):
Minister of state
Grievance officers FUNCTIONS OF PLANNING COMMISSION : THE 1950 RESOLUTION SETTING UP THE Planning Commission outlined its functions as under:
Make an assessment of the material, capital and human resources of the country, including technical personnel.
Formulate a plan for the most effective and balanced utilisation of the country’s resources.
On a determination of priorities, define the stages in which the plan should be carried out and propose the allocation of resources for the due completion of each stage.
Determine the nature of the machinery which will be necessary for securing the successful impementation of each stage of the plan. FUNCTIONS OF PLANNING COMMISSION A Review of Indian Plans : First Five Year Plan (1951-55): India’s first five year plan was a moderate document → It said that detailed planning to be attempted only for a few selected industries which India lacked. A Review of Indian Plans Objectives: : To correct the disequilibrium in the Indian economy caused by the second world war and the partition of the country.
To achieve self sufficiency in foodgrains production and to improve availability of raw materials
To control inflationary tendencies
To attempt to provide for an all round balanced development which would ensure a rising, national income and a steady improvement in living standards over a period of five years. Objectives: Slide 12: Second Plan: (1956-60)
To secure an increase in national income by about 25 percent over five years.
To initiate rapid industrialization with special emphasis on basic and heavy industries.
To generate more employment opportunities
To reduce the growing inequalities in the distribution of income and wealth.
To increase the rate of investment from 7 percent of National income to 11 percent of National income by 1960-61. Slide 13: Third Plan (1961-65)
to secure a growth in National Income of over 5 percent per annum
to achieve self sufficiency in foodgrains and to increase agricultural production to meet the requirements for industrial development and export promotion
to expand basic industries like steel, chemicals, fuel, and power and machine building capacity so that future industrial requirements can be satisfied domestically.
to utilize manpower efficiently by generating more employment opportunities. Plan Holiday : 1966-69 1966 and 1968 : Famine years : Economic difficulties disrupted the planning process in the mid 1960s.
In the 1960s, India faced two wars one with china in 1962 and then with pakistan in 1965.
This come as a huge set back to the economy as defence expenditure increased sharply and there was negative impact on industrial and agriculture growth.
Three annual plans guided development between FY 1966 and FY 1968 while plan policies and strategies were reevaluated. Plan Holiday : 1966-69 1966 and 1968 : Famine years Slide 15: Fourth Plan (1969-73)
to attain a 5.5 percent growth in national income per annum
to bring about economic stability
to achieve self reliance
to achieve social justice and equality
to utilize Panchayati Raj institutions in local and regional planning.
to recognize the management of public enterprises. Slide 16: Fifth Five Year Plan (1974-78)
to remove poverty and achieve self reliance
to achieve an adequate expansion of employment opportunities particularly in rural areas.
to achieve development without stimulating further inflationary pressures by introducing fiscal and monetary measures. Slide 17: Sixth Plan (1980-84)
to remove widespread poverty particularly in rural areas
to have an appreciable step up in the rate of growth of the economy
to strengthen the impulses of modernization for economic and technological self reliance
to provide basic needs of the people (drinking water, elementary education, health, etc.)
to reduce inequalities of income and wealth through redistribution in favour of the poor Slide 18: Seventh Plan (1985-89)
to achieve growth, equity, social justice, self reliance and improved efficiency and productivity
to accelerate production of foodgrains
to increase employment opportunities
to lessen agricultural constraints on industrial development
to initiate rapid expansion of scientific and technological capabilities. Slide 19: Eighth Plan (1992-96)The eighth plan is a plan for managing the change, for managing the transition from a centrally planned economy to a market led economy, without fearing our socio-cultural fabric. Slide 20: The Ninth Plan prepared under the United Front Government was released in March 1998. The same was modified and approved by the National Development Council in February 1999, nearly two years after its implementation from April 1, 1997.
1. OBJECTIVE OF THE NINTH PLAN
The Ninth Plan was developed in the context of four important dimensions of state policy, viz. Quality of life, generation of productive employment, regional balance and self-reliance The Ninth Plan focused on accelerated growth, recognising a special role for agriculture for its stronger poverty reducing and employment generating effects, which will be carried out over a 15 year period.
The focus of the Ninth Plan was on: "Growth with Social Justice and Equality'. The objectives of the Ninth Plan as approved by the National Development Council are as follows: Tenth Five Year Plan (2002-2006) : OBJECTIVES, TARGETS AND STRATEGY
Background of Developments in 1990's
The Tenth Plan (2002-07) was prepared against a backdrop of high expectations arising from some aspects of the recent performance. GDP growth in the post-reforms period improved to an average of about 6.1 per cent in the Eighth and Ninth Plans from an average of about 5.7 percent in the 1980s, making India one of the ten fastest growing developing countries. Encouraging progress was also made
The percentage of population in poverty continued to decline, even if not as much as was targeted. Population growth decelerated below 2 per cent for the first time in four decades. Literacy increased from 52 per cent in 1991 to 65 per cent in 2001 and the improvement was evident in all States. Sectors such as software services and IT enabled services have emerged as new sources of strength creating confidence about India's potential to be competitive in the economy Tenth Five Year Plan (2002-2006)