Economic planning in india

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1. Economic Planning of India Speaker-SANDEEP KUMAR

2. Economic Planning ? Economic Planning is to make decision with respect to the use of resources. Economic Planning is a term used to describe the long term plans of Govt. to co-ordinate and develop the economy. Objectives of Economic Planning- Economic Growth Reduction of Economic In-equalities Balanced Regional Development Modernization Reduction of Unemployment

3. Need for Economic Planning When India gained independence, its economy was groveling in dust. The British had left the Indian economy crippled and the fathers of development formulated 5years plan to develop the Indian economy. Some of the problems necessitated need for an immediate plan- Vicious circle of poverty Foreign Trade Need for Rapid industrialization Population pressure Development of Natural resources

4. The planning commission is an institution in the government of india which formulates economic policies and drafts five year plan. It was Set up on 15 March,1950 with Prime M inister Jawaharlal Nehru as the chairman . Planning commission of India The commission has a nominated Deputy Chairman, who has rank of a Cabinet Minister. Montek Singh Ahluvaliya is currently the Deputy Chairman of the Commission.

5. Functions of Planning Commision To estimate the physical, capital and human resources of the country. To prepare plan for making effective and balanced utilization of human resources. To determine the various stages of planning. To indicate those factors to the Govt which check the economic development. To advise the Centre and State Govt on special matters referred.

6. The economy of India is based in part on planning through its five year plans which are developed, executed and monitored by planning commission. The Twelfth plan is currently underway. First five year plan(1951-1956) Second five year plan (1956-1961) Third five year plan (1961-1966) Fourth five year plan (1969-1974) Fifth five year plan (1974-1979) Sixth five year plan (1980-1985) Seventh five year plan(1985-1990) Eighth five year plan(1992-1997) Ninth five year plan(1997-2002) Tenth five year plan (2002-2007) Eleventh five year plan (2007-2012) Twelfth five year plan (2012-2017) Five Year Plans of India

7. First Five Year Plan (1951-1956) The first Prime Minister, Jawaharlal Nehru presented the first plan to the Parliament of India on 8 December 1951. Objectives To reconstruct the economy which was damaged as a result of second world war. To increase food production capacity. To check the inflationary tendencies . To improve living standards of the people of India. The targeted growth in the GDP was 2.1% every year. The total outlay of this plan was worth ₹ 1960 crore .

8. In reality, GDP of 3.6% per annum was achieved . The following Irrigation projects were started during this period: Mettur Dam, Hirakud Dam and Bhakra Dam. The WHO with the Govt addressed children's health and reduced infant mortality, indirectly contributing to population growth. Effort were taken in improving posts and telegraphs, railway services, road tracks, civil aviation etc. The   UGC was set up to take care of funding the higher education in the country. Contracts were signed to start five steel plants. The plan was quasi successful for the government. What Was Achieved ?

9. This plan was based Mahalanobis model. This model was propounded by the famous statistician Prof P C Mahalanobis in the year 1953. His model addresses different issues related to economic development. Objectives The second five-year plan focused on industry, especially heavy industry. The Indian Govt boosted manufacturing of industrial goods in the country. This was done primarily to develop the public sector . T o increase the national income by 25 % & growth rate 2.1% Total outlay was worth of Rs 4672 crore Second Five Year Plan(1956-1961)

10. Hydroelectric power plants and Five steel mills at Bhilai , Durgapur, Rourkela and Jamshedpur were set up. Coal production was increased. Railway lines were added in the north east. The Atomic Energy Commission was formed in 1957 with Homi J. Bhabha as the first chairman. Tata Institute of Fundamental Research was born. Growth rate achieved in GDP 3.6% National Income increased 18% What Was Achieved ?

11. Table 01 : Public sector outlay of Frist and Second Plan Sectors (criteria) Outlay ₹ in crore First Plan Per cent % Second Plan Per cent % 1. Agriculture & community Development 291 15 549 11.7 2. Large & medium irrigation 310 16 430 9.2 3. Power 260 13 452 9.7 4.Village & small scale industry 43 2 187 4.0 5.Industry & minerals 74 4 938 20.1 6.Transport & communication 523 27 1261 27 7. Social services & others 459 23 855 18.3 Total 1960 100 4672 100

12. Third Five Year plan(1961-1966 ) The third plan stressed on agriculture and improving production of rice & wheat , but due to war between China- India in 1962 and also war between India and Pakistan in 1965 exposed weaknesses in the economy and shifted the focus towards defence. The war led to inflation and the priority was shifted to price stabilization. Objective Targeted growth rate of GDP was 5.6% To increase in national income by more than 5 per cent annually . To get self sufficient by increasing agricultural production.

13. The third plan was failure due to the wars of 62s & 65s and drought in 1965. And actually achieved growth was 2.8% D uring the period 1965 -66, Green Revolution attracted attention. F ertilizer plants were also built & the construction of D ams continued. Punjab begun producing an abundance of wheat . Primary schools, State secondary education boards and State electricity board were formed. The Panchayat & Zila Parishads Organizations formed. What Was Achieved ?

14. Table 02 : Public sector outlay of Third Plan Sectors (criteria) Total Outlay ₹ in crore Targeted Expenditure Per cent % Actual Expenditure Per cent % 1. Agriculture & community Development 1068 14 1089 12.7 2. Large & medium irrigation 650 9 664 7.8 3. Power 1012 13 1252 14.6 4.Village & small scale industry 264 4 241 2.8 5.Industry & minerals 1520 20 1726 21.1 6.Transport & communication 1486 20 2112 24.6 7. Social services & others 1500 20 1493 17.4 Total 7500 100 8577 100

15. Plan Holiday (1967-1969) Due to severe drought and Indo-Pak War in 1965 the third Plan was failed. Failure of Third Plan led to postponement of Fourth FYP . Therefore t hree Annual Plans were introduced instead of FYP. During these plans a whole new agricultural strategy was Implemented as wide-spread distribution of high-yielding varieties of seeds, extensive use of fertilizers , exploitation of irrigation potential and soil conservation

16. Fourth Five Year 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. I n addition, the situation in East Pakistan (now  Bangladesh) was becoming dire as the Indo-Pak War of 1971 and  Bangladesh Liberation War took funds earmarked for industrial development. The target growth rate was 5.6% , but the actual growth rate was 3.3 %.

17. Table 03 : Public sector outlay of Forth Plan Sectors (criteria) Outlay ₹ in crore Planned Outlay Per cent % Actual Outlay Per cent % 1. Agriculture & community Development 2728 17.2 2320 19.7 2. Large & medium irrigation 1087 6.8 1354 8.6 3. Power 2448 15.5 2932 18.6 4.Village & small scale industry 293 1.8 243 1.5 5.Industry & minerals 3338 21 2864 18.2 6.Transport & communication 3237 20.4 3080 19.5 7. Social services & others 2771 17.4 2986 18.9 Total 15,902 100 15,779 100

18. Fifth Five Year plan(1974-1979) Stress was laid on  employment,  poverty alleviation (Garibi Hatao) and  justice. The plan also focused on  self-reliance in agricultural production and defence. The Electricity Supply Act was amended in 1975. The  Indian national highway system was introduced. Food grain production was above 118 million tons due to the improvement of infrastructural facilities .

19. In 1975-1976 the Ministry of Agriculture initiated Desert Development Programme (DDP) in 1976. Integrated Rural Development Programme(IRDP) in 1978 Training of Rural Youth for Self-Employment (TRYSEM) is launched by the Central Government in August 1979 The target growth rate was 4.4% and the actual growth rate was 5.0 % Other activities

20. Table 04 : Sector wise Distribution of Public sector outlay during Fifth Plan Sectors (criteria) Outlay ₹ in crore Total Outlay Per cent % 1. Agriculture 4865 12.4 2. Irrigation & flood control 3577 9.8 3. Power 7400 18.8 4 .Industry & minerals 9581 24.4 5 .Transport & communication 6870 17.4 6 . Social services & others 6833 17.3 Total 39,426 100

21. Rolling Plan (1978 - 80) In 1978 the newly elected Morarji Desai govt. rejected the Fifth Five-Year Plan and introduced a new Sixth Five-Year Plan (1978-1980). This plan was again rejected by the Indian National Congress government in 1980 and a new Sixth Plan was made

22. Sixth Five Year plan (1980-1985) T he Sixth Five Year Plan was presented in 1978. However, the plan was terminated with the change of Government in January 1980. The new Sixth Five Year Plan was implemented in April 1980. Rajiv Gandhi was elected as the prime minister, He aimed for rapid industrial development, especially in the area of information technology. The sixth plan also marked the beginning of economic liberalization .

23. Family Planning was implemented for the first time in India. The target growth rate was 4.4% and the actual growth rate was 5.0 % Development of Women and Children in Rural Areas ( DWCRA) in 1982. NABARD – 12 th July 1982 Rural Landless Employment Guarntee Prorgamme (RLEGP)-1983 Crop Insurance Scheme was lunched in 1985 Achievements

24. Table 05 : Public sector outlay of Sixth Plan Sectors (criteria) Total Outlay ₹ in crore Total Outlay Per cent % Actual Outlay Per cent % 1. Agriculture & community Development 5695 5.9 6624 6.1 2. Rural development 5364 5.5 6997 6.4 3. Special area programme 1480 1.5 1580 1.4 4.Irrigation & flood control 12160 12.5 10930 10 5.Energy 26535 27.2 30751 28.1 6.Transport & communication 15546 15.9 17677 16.2 7.Science and tech. 865 0.9 1020 0.9 8.Industry mineral 15018 15.4 16948 15.5 9 . Social services & others 14837 15.2 16765 15.4 Total 97,500 100 1,09,292 100

25. Seventh Five Year plan(1985-1989) The main objectives of the 7th five year plan were to establish growth in production of food grains, generating employment opportunities and increasing economic productivity. Introduction and application of modern technology. Improved facilities for Education to girls. Increase productivity of small and large scale farmers.

26. Achievements of the Plan Special Food Production Programme (SFPP)– 1988 Jawahar Rozgar Yojana -1989 (NREP & RLEGP was merged) The plan was very successful as the economy recorded 6% growth rate against the targeted 5%

27. Table 06 : Public sector outlay of Seventh Plan Sectors (criteria) Total Outlay ₹ in crore Total Outlay Per cent % Actual Outlay Per cent % 1. Agriculture 10524 5.8 12793 5.8 2. Rural development 8906 4.9 15246 7 3. Special area programme 2804 1.6 3470 1.6 4.Irrigation & flood control 16979 9.4 16590 7.6 5.Energy 54821 30.4 61789 28.6 6.Industry mineral 22415 12.5 29220 13.4 7 .Transport & communication 37119 15.1 37974 17.4 8.Science , Tech. & Environment 2463 1.5 3024 1.4 9. Social services 31545 17.5 34960 16 10. Others 1524 1.4 3774 1.7 Total 1,80,000 100 2,18,730 100

28. The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre and the years 1990-91 and 1991-92 were treated as Annual Plans . P.V. Narasimha Rao (aka Father of Indian Economic Reforms) was the twelfth Prime Minister, and led 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 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. Period between 1989-91

29. This plan can be termed as Rao and Manmohan Model of Economic development. Modernization of industries was a major highlight of the Eighth Plan. The major ob­jectives of the eight plans were - control rapid population growth, poverty eradication, increase employment, strengthening the infrastruc­ture, develop tourism management, Human Resource Development, Eight Five Year plan(1992-1997)

30. During this Plan many programmes were started like- - Pradhan Manatri Rozgar Yojna (PMRY) -1993 - Mahila Samrudhi Yojana – 1994 India became a member of WTO on 1 January1995. An average annual growth rate of this Plan was 6.7% against the target 5.6% was achieved. Achievements

31. Table 07 : Public sector outlay in Eighth Plan Sectors (criteria) Proposed Outlay ₹ in crore Outlay % 1. Agriculture 22467 5.2 2. Rural Development 34245 7.9 3. Specific Area Programme 6750 1.6 4.Iarrigation & Flood Control 32525 7.5 5.Energy 115561 26.6 6 . Industry & Mineral 45922 10.8 7.Transport & Communication 81036 18.7 8.Science , Tech & Environment 9042 2.1 9 .Social Science & Other 85372 19.7 Total 4,34,100 100

32. Ninth Five Year Plan (1997 - 2002) The Ninth Five Year Plan, launched in the 50th year of India's Independence. Atal Bihari Vajpayee was the Prime Minister of India during this Plan. Government focused on Growth With Social Justice & Equality Objective Priority to agriculture and rural development. Accelerating growth rate of economy. Food and nutritional security for all Containing growth rate of population. Empowerment of women and socially disadvantaged groups such as SC/ST, backward classes and minorities.

33. The Ninth Five-Year 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% During this Plan many programmes were started like- - Swarana Jyanti Gram Swarozgar Yojana- 1999 - Indira Awas Yojna-2000 - Pradhan Mantri Gram Sadak Yojana – 2000 - Sampoorna Grameen Rozgar Yojana - 2001 Achievements of the Ninth plan

34. Objective Reduction in poverty ratio from 26% to 21% To reduce population growth from 21% in 1991-2001 to 16% by 2001-11 Literacy rate to increase from 65% in 1999-2000 to 75% in 2001 Increase in forest/tree cover from 19% in 1999-2000 to 25% in 2007 Cent per cent registration of children (age group 6-14 yrs) Cleaning of all major rivers by 2007. Tenth Five Year Plan (2002-2007)

35. Achievements The target growth rate was 8% and the actual growth rate was 7% National Commission on Farmer-2004 National Rural Employment Guarantee Act (NREGA) - 6 th February 2006 National Food Security Mission (NFSM) -2007

36. Planning commission has released INDIA VISION-2020 on January 23, 2003 which presents pre-assessment of the progress of the Indian economy for the next two decades. Salient points of the vision- The expected growth rate by 2020 to be 9% Elimination of unemployment, illiteracy & poverty by 2020 Per capita income to get doubled by 2020 Present employment share in agriculture to come down from 56% to 40% by 2020 To overcome the water problem in metropolitan cities. INDIA VISION-2020

37.   Eleventh Five Year Plan (2007-2012) Eleventh plan has the following objectives- To Accelerate GDP growth from 8% to 10% p.a. To Increase agricultural GDP growth rate to 4% per year . To Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% in 2011-12 Raise the sex ratio to 935 by the end of the 11 th Plan. Increase literacy rate for persons of age 7 years or more to 85% To raise public health spending to 2% of GDP during the plan. The target growth rate was 9% and the actual growth rate was 8.1%

38. Table: sectorial growth in recent years Table 8 : Sectoral Growth in Recent Plans Sectoral Growth in Recent Plans ( % per annum ) Sector 8 th Plan 9 th Plan 10 th Plan 11 th Plan 1.Agriculture 4.72 2.44 2.30 4.0 2.Industry 7.29 4.29 9.17 10-11 3.Services 7.28 7.87 9.30 9-11 4.Total 6.54 5.52 7.74 9.0

39. The Twelfth Five-Year Plan of the Govt.  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. With the deteriorating global situation, the Deputy Chairman of the Planning Commission Mr. Montek Singh Ahluwalia has said that achieving an average growth rate of 9 percent in the next five years is not possible. The Final growth target has been set at 8% by the endorsement of plan at the National Development Council meeting held in New Delhi . Twelfth Five Year Plan (2012-2017)

40. O bjectives Basic objective: Faster, sustainable and more inclusive growth The government intends to reduce poverty by 10% during the 12th Five-Year Plan . For growth to be more inclusive we need: Better performance in agriculture Faster creation of jobs, especially in manufacturing Stronger efforts at health, education and Infrastructure. Special plans for disadvantaged/backward regions.

41. Growth performance in various plans (in % per annum) Plan Target Actual First plan 2.8 3.6 Second Plan 4.5 4.2 Third Plan 5.6 2.8 Fourth Plan 5.6 3.3 Fifth Plan 4.4 5 Sixth Plan 5.2 5.5 Seventh Plan 6 5 Eighth Plan 6.7 5.6 Ninth Plan 5.4 6.5 Tenth Plan 8 7 Eleventh Plan 9 8.1 Twelfth Plan 8 - Table 09 : Evaluation of Growth in Several Plans

42. Growth Performance in Five Year Plans

43. Replacement of Planning Commission NITI Aayog or  National Institution for Transforming India Aayog  is a policy think-tank of Government of India that replaces Planning Commission and aims to involve the states in economic policy-making in India. Union Govt of India had announced formation of NITI Aayog on 1 January 2015. Chairperson:  Prime Minister Narendra Modi Vice Chairperson: Arvind Panagariya CEO: Sindhushree Khullar IAS

44. Objective of NITTI Aayog To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of states in the light of national objectives. A pre-people, pro-active and participative development agenda is the guiding principle behind NITTI Aayog. -Prime Minister Narendra Modi

45. Economic planning help in mobilizing and allocating the resources in desired manner. Objective of economic planning is to reduce inequality, economic growth, balanced regional growth, modernization. Each five year plan aims to achieving certain target. Five year plan constitute the steps toward the fulfillment of objectives of economic planning. But most of the Plans could not achieve the targets  The 12th Plan has taken off; it is yet to be formally approved with the aim of the growth rate at 8%. Conclusion

46. Thank you