FIVE YEAR PLANS OF INDIA CLASS 12

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FIVE YEAR PLANS OF INDIA CLASS 12

1. ……….refers to an arrangement by which central problems of an economy are solved.

(a) Economic System

(b) Mixed Economy

(d) Capitalist Economy

Ans. a

2. Planning commission of India was established in the year:

(a) 1945

(b) 1947

(d) 1951

Ans. c

3. Which type of economic system has India adopted for economic development?

(a) Capitalism

(b) Socialism

(d) Feudalism

Ans. c

4. Continuous increase in Gross Domestic Product (GDP) is known as:

(a) Economic Growth

(b) National Income

(d) Per Capita Income

Ans. a

5. Who among the following is ex-officio chairman of the Planning Commission?

(a) Prime Minister

(b) Finance Minister

(d) None of these

Ans. a

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6. An economic system in which major economic decisions are left to free play of market forces is called:

(a) Mixed System

(b) Socialism

(d) None of these.

Ans. c

7. Which of the following bodies/institutions was engaged in the formulation of five-year plans in India?

(a) Planning Commission

(b) National Development Council

(d) Home Ministry

Ans. a

8. What happens when the growth in national income is more than the growth in population?

(a) Increase in Per Capita Income

(b) Reduction in Poverty

(d) Increase in Income

Ans. a

9. In which year was India’s First Five Year Plan launched?

(a) 1951

(b) 1947

(d) 1935

Ans. a

10. The period of the First Five Year Plan was:

(a) 1950-1955

(b) 1951-1956

(d) 1953-1958

Ans. b

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11. After which Five Year Plan, there were three annual plans:

(a) Second Five Year Plan

(b) Third Five Year Plan

(d) Fifth Five Year Plan

Ans. b

12. The process under which given objectives of economic development are sought to be achieved in a given period keeping in view the available resources of the country are called

(a) Economic Planning

(b) Financial Planning

(d) None of these.

Ans. a

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13. The sectors in a mixed economy are:

(a) Public Sector

(b) Private Sector

(d) None of these

Ans. c

14. The objectives of first five-year plan were

(a) To improve economy

(b) To Control Prices

(d) All of these.

Ans. d

15. The main objective of second plan was:

(a) Industrialization

(b) Removal of Poverty

(d) None of these

Ans. a

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16. The foremost objective of Fifth Five Year Plan was

(a) Removal of Poverty

(b) Achievement of Self Sufficiency

(d) Both (a) and (b)

Ans. d

17. What was the unemployment rate in India in the year 2011-12?

(a) 5.6%

(b) 2.5%

(d) 8.3%

Ans. a

18. What percentage of the population was below poverty line (BPL) in 2011-12?

(a) 22%

(b) 23%

(d) 26%

Ans. a

19. Targeted agricultural growth rate for Twelfth Five Year Plan is:

(a) 5%

(b) 4%

(d) 2%

Ans. b

20. What is the target of economic growth rate in twelfth Five Year Plan?

(a) 9%

(b) 8.5%

(d) 8%

Ans. d

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21. The main cause of failure of five-year plans

(a) Increase in Prices

(b) Increase in unemployment

(d) All of the above

Ans. d

FILL IN THE BANKS

1. The Planning commission was set up in …………..

Ans. 1950

2. ………… implies use of advanced technology.

Ans. Modernisation

3. The economic system adopted in India is …………

Ans. Mixed Economy

4. …………system has the sole objective of profit maximization.

Ans. Capitalist

5. Inward looking trade strategy is also known as a policy of …………..

Ans. Import Substitution

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6. …………economy is a planned economy which is under direct control of government.

Ans. Socialist

7. Gross Domestic Product is an indicator of ………… of an economy.

Ans. Economic Growth

TRUE OR FLASE STATEMENTS

1. The objective of planning is not to do growth with justice.

Ans. False

2. The objective of most of the economic policies is not to reduce regional inequalities.

Ans. False

3. Indian plans have not failed to achieve the goal of price stability.

Ans. False

4. The employment growth rate in India was 1.5 % but the growth rate of supply of labour was 2.2 % during a decade from 1980 to 1990.

Ans. True

5. Prime Minister, Sh. Narendra Modi is the present Chairman of NITI Ayog.

Ans. True

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6. The achievements of economic planning are in accordance with expectations up to 1990 and after 1991.

Ans. False

7. Long period objectives are also called objectives of plans.

Ans. True

8. Full employment implies absence of unemployment in and economy.

Ans. False

ONE WORD TO ONE SENTENCE QUESTIONS ANSWERS

Q. 1. What is economic planning?

Ans. It is a technique by which a central planning authority tries to control economic factors to achieve some predeterminal objectives within a specified period of time keeping in view the resources of the country.

Q. 2. Name the body which formulates economic plans in India.

Ans. Planning Commission of India.

Q. 3. Name the body which finally approves the draft of plans in India.

Ans. National Development Council.

Q. 4. Mention the composition of Planning Commission in India.

Ans. It comprises Prime Minister of India, Chief Ministers of all states and the members of the Planning Commission.

Q. 5. Which Aayog has been constituted in Place of Yojana Aayog?

Ans. NITI Ayog.

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Q. 6. What is the target of economic growth rate of 12th plan?

Ans. 8% per annum.

Q. 7. Who is the Chairman of NITI Ayog?

Ans. Prime Minister Sh. Narendera Modi.

Q. 8. Which economic system was envisaged by India after independence?

Ans. After independence, India envisaged an economic system which combines the best features of socialism and capitalism – this is called the mixed economy model.

Q. 9. Name common goals of five-year plans.

Ans. Common goals of five-year plans are growth, modernization, self-sufficiency and equity.

Q. 10. What were the major policy initiatives in agriculture sector?

Ans. The major policy initiatives in agriculture sector were land reforms and green revolution. These initiatives helped India to become self-sufficient in food grains production.

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Q. 11. Mention main features of economic planning.

Ans. Main features of economic planning are:

(i) Heavy dependence on public sector.

(ii) Regulated or controlled development of private sector.

(iii) Policy of protection from foreign competition.

(iv) Protection to small scale industries

(v) Diversification of industries.

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SHORT ANSWER TYPE QUESTIONS

Q1. What is meant by economic planning?

Ans. Economic planning is an organized and co-ordinated efforts to achieve certain self-defined objectives with in a fixed time frame through optimum utilization of community’s resources so as to promote its general well-being.

According to Planning Commission of India, “Economic planning means utilization of country’s resources into different development activities in accordance with national priorities.”

Q2. Why did India opt for economic planning?

Ans. In the wake of independence, India was faced with an uphill task of overcoming the legacy of colonial policies. India sought to reverse the historical process’. Given the nature of a highly fragmented and distorted economy and the low level of infrastructure, human resource development 99. and living standards, the primary objective of economic and social policy has to be developmental.

The early pioneers of development economics such as Simon Kuznets, Rosenstein Rodan, Ragnar Nurkse, Arther Lewis had suggested that economic planning was the most systematic technique for redressing all economic problems. Applauding the experience of economic planning in different countries of the world, India adopted economic planning in order to overcome various economic problems faced by the country during the middle part of the 20th century.

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Q3. How are economies classified into different types of economic system?

Ans. Economic system refers to a system or arrangement in which central problems of an economy are solved.

1. Capitalist Economy: Capitalist economy depends upon the market forces of demand and supply. In this type of economy only those consumer goods will be produced that have good demand in the market and yield profit to the producers.

2. Socialist Economy: Socialist economy is a system in which all decisions are taken by the government. In this system government decides what goods are to be produced in accordance with the needs of the society. Social welfare is the principal objective of production activity.

3. Mixed Democratic: Economy In a mixed economy, public and private sector exist side by side. Both price mechanism and central planning authority decide what, how and for whom to produce. India is a mixed economy.

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Q4. Briefly mention the long-term objectives of planning in India?

Ans. 1. Economic Growth or Increase in GDP: Attainment of higher rate of economic growth is among the foremost objectives of planning in India. Economic growth implies a consistent increase in the aggregate output of goods and services in a country over a long period of time. A steady increase in GDP is an indicator of economic growth. The GDP is the market value of all the goods and services produced in the country during a year. The GDP of a country is derived from the different sectors of the economy, namely the agricultural sector, industrial sector and the tertiary sector. The contribution made by each of these sectors makes up the structural composition of the economy.

2. Self-Reliance: One of the very important objectives Indian planning is to attain economic self-reliance. Self-reliance means not depending on external help. The first seven five-year plans gave importance to self-reliance which means avoiding imports of those goods which could be produced in India itself. This policy was considered a necessity in order to reduce our dependence on foreign countries, especially for food.

Q5. What are main features of economic policies till 1991.

Ans. Planning in India during the first forty years i.e., up to 1991, followed changing economic policy from time to time. Before 1991, Indian economy was a protected economy away from foreign competition. The following are the features of economic policy till 1991:

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1. Heavy Dependence on Public Sector: Prior to 1991, there was heavy reliance on the public sector. It was assumed by policy planners that only government can play instrumental role in realising the objective of social justice and equity. Thus, in industrial policy 1956, there were 17 industries reserved for public sector as against only 12 industries for private sector

2. Controlled Development of Private Sector: The State or Central Government held complete control over the private sector through licensing system. New industrial enterprises were not allowed to operate without obtaining license and getting itself registered. License was even required even for expansion of the production or for diversifying production.

3. Inward Looking Policy and Protection from Foreign Competition: Prior to 1991, domestic industry was protected from foreign competition. High import duties and quantitative restrictions were imposed on imports. It implied placing more reliance on import substitution.

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5. Centralised Planning: India followed the concept of centralised planning for its development process. Programmes of growth and development at State level were aligned with the overall growth strategy of the Centre Government.

6. Modernisation: Modernisation of various sectors of economy is another very important objective of five-year plans. Modernisation refers to adoption of new technology, new methods of production and changes in social outlook. Modernisation helps an economy to advance at a faster pace and compete with the developed nations of the world.

7. Full Employment: Attain full employment or higher rate of employment in economy is also an important long-term goal of economic planning in India. Full employment refers to a situation when everyone who is able and willing to work at the market wage rate, is working i.e., is engaged in some job or work which brings him income. It is a social objective of planning. Higher rate of employment implies that there should be a higher rate of active participation of working age group in economic activities of the country i.e., in the process of economic growth.

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Q6. Briefly explain four main failures of economic planning in India.

Ans. Following points highlight failure of economic planning till 1991:

1. Slow Growth in Production Sector: In the five-year plan, growth rate of production was slow in many sectors. Capital intensive industries in urban areas were given precedence over small scale industries in the rural areas. In agriculture green revolution continues to be confined largely to wheat and rice crops and to a few states only.

2. Inequality in Distribution of Income and Wealth: One of the main objectives of five-year plans had been to minimise inequality in distribution of income and wealth. But the plans witnessed only increase in inequality. Rich class becomes richer and poor class poorer. This inequality is found not only in industrial sector but in agriculture sector also.

3. Inefficient Administration: An expert team of U.N.O. observed that one of the main short comings of Indian plans has been with reference to its implementation. Plans are formulated after good deal of discussion and deliberations but their targets are not achieved due to inefficient administration, dishonesty, vasted interests and red tapism etc.

4. Widespread Poverty: Failure to address the problem of unemployment has resulted in widespread poverty in the country. The first four plans failed to address the problem of poverty. It was only during the fifth five year plan that measures were taken to tackle poverty directly by introducing various poverty alleviation programmes. These programmes, however, have achieved only limited success.

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Q7. Discuss full employment as the long-term objective of planning?

Ans. Full Employment: Attain full employment or higher rate of employment in economy is also an important long-term goal of economic planning in India. Full employment refers to a situation when everyone who is able and willing to work at the market wage rate, is working i.e., is engaged in some job or work which brings him income. It is a social objective of planning. Higher rate of employment implies that there should be a higher rate of active participation of working age group in economic activities of the country i.e., in the process of economic growth. Providing employment to poor has been the best tool of economics to alleviate poverty. Slow growth of the agriculture sector and lack of investments in the industrial sector are major causes for high levels of unemployment in the country. Employment generation in India has been, therefore, remained part and parcel of the five-year plans.

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Q8. What are the functions of NITI Ayog?

Ans. NITI Ayog is developing itself as a state-of-the-art Resource Centre. It will have necessary resources, knowledge and skills, that will enable it to promote research and innovation, provide strategic policy vision for the government, and deal with contingent issues. NITI Aygo’s functions can be divided into four main heads :

1. Design policy & programme frame work.

2. Foster co-operative federalism.

3. Monitoring and Evaluation.

4. Think Tank and knowledge & Innovation Hub.

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Q9. How NITI Ayog is different from Planning Commission?

Ans. On the following five counts NITI Ayog differs from the planning commission:

Parameter	NITI Ayog	Planning Commission
1. Financial Clout	To be an advisory body or a think tank. The power to allocate funds might be vested in the finance ministry.	Enjoyed the powers to allocate funds to Ministers and State Governments.
2. Full Time Members	The numbers of full-time members is less than Planning Commission.	Planning Commission had eight full time members.
3. States Role	State government are expected to play a more significant role than they did in Planning Commission.	States role was limited to the National Development Council and annual interaction during plan meetings.
4. Members Secretary	To be known as CEO and appointed by the Prime Minister.	Secretaries or member secretaries were appointed through the usual process.
5. Part Time Members	To have a number of part time members, depending on the need from time to time.	Planning Commission had no provision for part time members.

co-operative federalism.

3. Monitoring and Evaluation.

4. Think Tank and knowledge & Innovation Hub.

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Q9. How NITI Ayog is different from Planning Commission?

Ans. On the following five counts NITI Ayog differs from the planning commission:

Parameter	NITI Ayog	Planning Commission
1. Financial Clout	To be an advisory body or a think tank. The power to allocate funds might be vested in the finance ministry.	Enjoyed the powers to allocate funds to Ministers and State Governments.
2. Full Time Members	The numbers of full-time members is less than Planning Commission.	Planning Commission had eight full time members.
3. States Role	State government are expected to play a more significant role than they did in Planning Commission.	States role was limited to the National Development Council and annual interaction during plan meetings.
4. Members Secretary	To be known as CEO and appointed by the Prime Minister.	Secretaries or member secretaries were appointed through the usual process.
5. Part Time Members	To have a number of part time members, depending on the need from time to time.	Planning Commission had no provision for part time members.