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PLANNING IN INDIA
History of Planning in India
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• First attempt to initiate economic planning in India was made by Sir M Vishveshvarayya, a noted engineer and politician, in 1934 through his book ‘Planned Economy for India’.
• In 1938. National Planning Commission’ was set-up under the chairmanship of Jawahar Lal Nehru by the Indian National Congress. Its recommendations could not be implemented because of the beginning of the World War II and changes in the Indian political situation.
• In 1944, ‘Bombay Plan’ was presented by 8 leading industrialists of Bombay. It was drafted by GD Birla and JRD Tata.
• In 1944, ‘Gandhian Plan’ was given by Sarojini Naidu Agarwal.
• In 1945, ‘People’s Plan’ was given by MN Roy.
• In 1950, ‘Sarvodaya Plan’ was given by JP Narayan. A few points of this plan were accepted by the government.
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The Planning Commission.
• The Planning Commission was set-up on 15th March 1950 under the chairmanship of Jawahar lal Nehru, by a resolution of Union Cabinet .
• It is an extra-constitutional and non-statutory body.
• It consists of Prime Minister as the ex-officio Chairman, one Deputy Chairman appointed by the Prime Minister and some full time members.
• The tenure of its members and Deputy Chairman is not fixed. They are appointed by the government on its own discretion. The number of members can also change according to the wishes of the government.
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Functions
• Assessment of material, capital and human resources of the country.
• Formulation of plans for the most effective and balanced utilisation of country’s resources.
• To determine the various stages of planning and to propose the allocation of resources on the priority basis. To act as an advisory body to the Union Government
• To evaluate from time-to-time the progress achieved in every stage of the plan and also to suggest remedial measures.
• To advise the Centre and the State Governments from time-to-time on special matters referred to the commission.
• Planning in India drew on Economic plane of lenin.
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National Development Council
• All the plans made by the Planning Commission have to be approved by National Development Council (NDC) first. It was constituted to build co-operation between the states and the Planning Commission for economic planning.
• It is an extra-constitutional and extra-legal body
• It was set-up on 6th August 1952 by a proposal of the government, the PM is the ex-officio chairman of NDC. Other members. are Union Cabinet Ministers, Chief Ministers and Finance Ministers of all states, Lt Governors of Union Territories and Governors of Centrally-ruled States.
Five Year Plans
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First Five Year Plan (1951-56)
• It was based on Harrod-Domar Model.
• Community Development Programme was launched in 1952. Two-fold objectives were there.
• Its objective was to correct the disequilibrium in the economy caused by 3 main problems
(i). influx of refugees,
(ii), severe food shortage
(iii). mounting inflation.
• Targeted growth rate was 2.1% and achieved rate was 3.6%. .
• Only plan to see prices declining. .
• To initiate a process of all-round balanced development to ensure a rising national income and a steady improvement in living standards.
• Emphasised on agriculture, price stability, power and transport.
• It was more than a success, because of good harvests in the last two years.
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Second Five Year Plan (1956-61)
• Achieved 4.1% as against a targeted growth rate of 4.5 %.
• Durgapur, Bhilai and Rourkela steel plants were founded.
• Also called as Mahalanobis Plan after its chief architect PC Mahalanobis.
• Its emphasis was on economic stability. Agriculture target fixed in the first plan was almost achieved. Consequently, the agriculture sector got low priority in the second-five year plan.
• Its objective was Rapid Industrilisation, particularly basic and heavy industries such as iron and steel, heavy chemicals like nitrogenous fertilizers, heavy engineering and machine building industry.
• Besides, the Industrial Policy of 1956 emphasized the role of Public Sector and accepted the establishment of a socialistic pattern of the society as the goal of economic policy.
• Advocated huge imports which led to emptying of funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon. During this plan, price level increased by 30%, against a decline of 13% during the First Plan.
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Third Five Year Plan (1961-66)
•Targeted growth rate (5.6 %) could not be achieved as GDP grew by 2.8% only.
• Third Five Year plan is also called Gadgil Yojana.
• At its conception time, it was felt that Indian economy has entered a take-off stage. Therefore, its aim was to make India a “self-reliant’ and self-generating’ economy.
• Also, it was realised from the experience of first two plans that agriculture should be given the top priority to suffix the requirements of export and industry.
• The other objectives of the plan included the expansion of basic industries, optimum utilization of country’s labour power and reducing the inequalities of income and wealth.
• Relied heavily on foreign aid (IMF).
• Complete failure due to unforeseen misfortunes, viz. Chinese aggression (1962). Indo-Pak War (1965), severest drought (1965-66).
• Prices increased by 36% in five years.
• Hence, third plan failed in every respect.
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Third Annual Plans (1966-69)
• Plan holiday for 3 years.
• The prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans
• During these plans a whole new agricultural strategy involving wide-spread distribution of High-Yielding Varieties (HYVS) of seeds, the extensive use of fertilisers, exploitation of irrigation potential and soil conservation was put into action to tide-over the crisis in agricultural production
• During the Annual Plans, the economy basically absorbed i the shocks given during the Third Plan, making way for a planned growth
Fourth Five Year Plan (1969-74)
• The fourth plan set before the two principal objectives-growths with stability and progress towards self-reliance
• Main emphasis an agricultural growth rate targeted 5.6 % but achieved 3.3 % growth rate only.
• Fared well in the first two years with record production, last three years failure because of poor monsoon.
• Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo-Pak War
• During the planning period, prices increased by about 61%
• Nationalisation of 14 Banks and the Green Revolution began.
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Fifth Five Year Plan (1974-79)
• It targeted a growth rate of 4.4% but achieved a growth rate of 4.8 %.
• Original approach (by subramanium) proposed complementing economic growth with direct attack on poverty.
• But it was replaced later with objectives of removal of poverty and getting self-reliance (by DP Dhar).
• The Fifth Plan prepared and launched by DD Dhar. He proposed to achieve two main objectives viz, ‘Removal of Poverty (Garibi Hatao) and Attainment of Self-reliance’, through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings.
• National programme of minimum needs was initiated in which primary education, drinking water, medical facilities in rural areas, nourishing food, land for the houses of landless labourers, rural roads, electrification of the villages and cleanliness of the dirty suburbs were included.
• The plan was terminated in 1978 (instead of 1979) when Janta Government came to power.
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Rolling Plan (1978-80)
• The concept of rolling plan was given by Gunnar Myrdall.
• It meant that expenditures budgeted but unspent at the end of year would be carried over to the next year.
• There were 2 sixth-five Plans-one by Janta Government (for 78-83) which was in operation for 2 years only and the other by the Congress Government when it returned to power in 1980.
• The Janta Government Plan is also called Rolling Plan.
• The focus of the plan was enlargement of the employment potential in agriculture and allied activities, encouragement to household and small industries producing consumer goods for consumption and to raise the incomes of the lowest income classes through minimum needs programme.
Sixth Five Year Plan (1980-85)
• Sixth Five Plan targeted 5.2% but achieved a growth rate of 5.7%
• First plan with signs of starting of economic liberalisation. Basic objective was removal of poverty through direct action
• Integrated Rural Development Programme (IRDP). Minimum Needs Programme (MNP) were started.
• Objectives Include Increase in National income, modernization of technology, ensuring continuous decrease in poverty and unemployment, population control through family planning, etc.
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Seventh Five Year Plan (1985-90)
• The Seventh Plan emphasized policies and programmes, which aimed at rapid growth in food-grains production. increased employment opportunities and productivity within the framework of basic tenants of planning.
• It was a great success, the economy recorded 6% growth rate against the targeted 5%. Indian economy finally broke the Hindu growth rate barrier.
Due to severe economic crisis, eighth-five year plan was delayed by two years. The intervening years (1990-91 and 1991-92) were declared Annual Plans.
Eighth Five Year Plan (1992-97)
• First Five Year Plan based on Rao and Manmohan mode of economic growth.
• Sought to gradually open the Indian economy through LPG Liberalisation, privatisation and Globalisation measures.
• Some of the main economic performances during Eighth Plan period were rapid economic growth, high growth of agriculture and allied sector and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit.
• The most notable feature of the Eighth Plan period was that the GDP grew at an average rate of 6.8% exceeding the target growth rate of 5.6 %
Ninth Five Year Plan (1997-2002)
• Growth rate of GDP during the plan was 5.4% per annum as against the target of 6.5%
• Agriculture grew by 2.1% as against the target of annum. 4.2% per annum.
• Industrial growth was 4.5% as against the target of 3% per annum.
• Exports grew by 7.4\% (target was 14.55\%) and imports grew by 6.6% (target was 12.2% per annum.).
• Services grew at the rate of 7.8% per annum.
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Tenth Five Year Plan (2002-2007)
Objectives
(i) To attain a growth rate of 8%
(ii) Reduction of poverty ratio to 20% by 2007 and to 10% by 2012.
• Providing gainful high quality employment to the addition to the labour force over the Tenth Plan period.
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• Universal access to primary education by 2007.
• Reduction in gender gaps in literacy and wage rates by atleast 50% by 2007.
• Reduction in decadal rate of population growth between 2001 and 2011 to 16.2 %.
• Increase in literacy rate to 72% within the plan period and to 80% by 2012
• Reduction of Infant Mortality Rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012.
• Reduction of Maternal Mortality Rate (MMR) to 20 per 1000 live births by 2007 and to 10 by 2012
• Increase in forest and tree cover to 25% by 2007 and 33% by 2012.
• All villages to have sustained access to potable drinking water by 2012.
• Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.
• The tenth plan focused on ways and means of correcting the regional imbalance.
• The plan laid great emphasis on agriculture since growth in this sector is likely to lead to the widest dissemination of benefits, especially to the rural poor including agricultural labour.
• The growth strategy of the Tenth Plan sought to ensure the rapid growth of those sectors which are most likely to create high quality employment opportunities, which included such sectors as construction, real estate and housing, transport, small scale industries, modern retailing, entertainment, IT-enabled services, etc.
• The tenth-five year plan achieved a growth rate of 7.6% below the targeted 8% but higher than all Previous Five Year Plans.
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Eleventh Five Year Plan (2007-2012)
Monitorable Socio-Economic Targets of the Eleventh Plan
Income and Poverty
• Accelerate growth rate of GDP 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%.
• Reduce the headcount ratio of consumption poverty by 10% points.
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Education
• Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12. • Increase literacy rate for persons of age 7 years or more to 85%.
• Lower gender gap in literacy to 10% points.
• Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the Eleventh Plan.
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Health
• Reduce Infant Mortality Rate (IMR) to 28 and Maternal Mortality Ratio (MMR) to I per 1000 live births.
• Reduce total fertility rate to 2.1.
• Reduce malnutrition among children of age group 0-3 to half its present level.
• Reduce aneamia among women and girls by 50% by the end of the Eleventh Plan.
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% of the direct and indirect beneficiaries of all government schemes are women and girl children.
Infrastructure
• Ensure electricity connection to all villages and BPL households by 2009 and round-the-clock power by the end of the plan.
• 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.
• 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.
Twelfth Five Year Plan (2012-17)
• The approach paper to the plan is based on the theme “faster, sustainable and more inclusive growth,”
• The paper indicates 14 key areas to be focussed by the twelfth-five year plan. Some of these are energy transport, natural resources, rural transformation, health, transport, education and skill development.
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Key Targets
(i) Real GDP growth rate-8 % (down from earlier 8.2%).
(ii) Agricultural growth rate-4%.
(iii) Manufacturing Growth rate-10%.
(iv) Consumption poverty-to be reduced by 10 % points.
(v) Employment-50 million new work opportunities in the non-farm sector,
(vi) Mean years of schooling-Increase it to 7 years by 2017.
(vii) Infant Mortality Rate (IMR)- Reduce to 25.
(viii) Maternal Mortality Rate (MMR)-Reduce to 1 per 1000 live births.
(ix) Child (0-6) sex ratio-Raise it to 950 by 2017.
(x) Total fertility rate-Reduce it to 2.1.
(xi) Gross Irrigated Area-Increase it from 90 million hectare to 103 million hectare by 2017.
(xii) Renewable energy capacity-Add 30000 MW of new power capacity.
Rural and Urban Poverty Inclusive Development
• Inclusive development means development which is participative and empowers every individual especially the poor and excluded.
• Inclusive development in India first emphasised in the Eleventh Plan Period (2007-12).
• The essential elements of inclusive development are
(i) poverty reduction and increase in quantity and quality of employment
(ii) agricultural development
(iii) reduction in regional disparities
(iv) social sector development
(v) protecting the environment.
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Human Development
• The Human Development Report (HDR) was published by the UNDP since 1990 captures the essence of Human development,
• The concept of HDR was started by Pakistani economist Mahbub-ul-Haq and Amartya Sen.
• The theme of the HDR-2013 is the rise of the South: Human Progress in a Diverse World.
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Table of Contents
SSC CHSL PLANNING IN INDIA MCQs
1. Who had advocated the Area approach to decentralised planning in India?
(a) Dadabhai Naoroji
(b) D.R. Gadgil
(c) Raj Krishna
(d) Pranav Mukherjee
Ans. (b)
2. Mahalanobis model was employed in the:
(a) 1st Five Year Plan
(b) 2nd Five Year Plan
(c) 3rd Five Year Plan
(d) 4th Five Year Plan
Ans. (b)
3. The outlines of second Five Year Plan was made by:
(a) B.N. Gadgil
(b) V.K.R.V. Rao
(c) P.C. Mahalanobis
(d) C.N. Vakil
Ans. (c)
4. Rolling Plan was made for the period of:
(a) 1971 to 1972
(b) 1984 to 1985
(c) 1978 to 1980
(d) 1996 to 1997
Ans. (c)
5. Who is not the member of National Development Council?
(a) Governors of the state
(b) Chief Minister of the state
(c) Administrative thoughts of union Territory
(d) All minister of Union Cabinet
Ans. (a)
6. When was the National Development Council set up?
(a) 1948
(b) 1950
(c) 1951
(d) 1952
Ans. (d)
7. The NITI Aayog will derive its objectives from ….. of the Constitution
(a) Fundamental Rights
(b) Directive Principles of State policy
(c) Fundamental Duties
(d) Preamble
Ans. (b)
8. Which of the following is not a basic objective of Indian planning are:
(a) economic growth
(b) self-reliance
(c) employment generation
(d) population growth
Ans. (d)
9. The first attempt to initiate economic planning in India was made by:
(a) Balwantrai Mehta
(b) Vallabhbhai Patel
(c) M.Visvesvaraya
(d) Jawaharlal Nehru
Ans. (c)
10. Mahalanobis Growth Model put major emphasis on:
(a) Agriculture sector
(b) Transportation sector
(c) Heavy industries
(d) Skill development
Ans. (c)
11. Under which Five Year Plan was Operation Flood launched?
(a) Fourth
(b) Fifth
(c) Third
(d) Sixth
Ans. (a)
12. In India, Planned Economy is based on?
(a) Gandhian System
(b) Socialist System
(c) Capitalist System
(d) Mixed Economy System
Ans. (b)
13. The planning Commission of India was established in:
(a) 1942
(b) 1947
(c) 1950
(d) 1951
Ans. (c)
14. The NITI Aayog is a/an:
(a) Constitutional body
(b) Statutory Body
(c) Advisory Body
(d) All of the above
Ans. (c)
15. Which of the following initiative/s was/were launched by the NITI Aayog?
(a) Ek Bharat Shrestha Bharat
(b) SATH Initiative
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Ans. (c)
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