History of Planning in India

The ever-inevitable increase in India’s urban population under different circumstances has been adding enormous stress on its infrastructure systems, which need proper planning & management to sustain & contribute towards the development of the nation & its economy.

Therefore, Planning is an important component for any country, especially for a developing one like India. Because of prioritising planning the government of India initiated five-year plans post-independence period in 1951. Before the first five-year plan, the Indian economy was backward having increased in Population more as compared to economic growth with a bad situation of trade and industries, this was affecting The per capita income in the country which was also very low.

Therefore, planning started in India with a central objective 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. (Commission) Since 1947, the Indian economy has been premised on the concept of planning.

The Planning Commission has been entrusted with the responsibility of the creation, development and execution of India’s five-year plans. This has been carried through the Five-Year Plans, developed, executed, and monitored by the Planning Commission to be known as NITI Aayog after the dissolution of the Planning Commission in 2014an acronym for National Institution for Transforming India.

Pre-Independence Planning in India

Prior independence theoretical efforts included the National Planning Committee by the Indian National Congress in 1938, The Bombay Plan & Gandhian Plan in 1944, the Peoples Plan in 1945 (by the post-war reconstruction Committee of Indian Trade Union), and the Sarvodaya Plan in 1950 by Jaiprakash Narayan were steps towards planned economic developments in India.

Post-Independence Planning in India

After independence, India launched its First FYP in 1951, under the socialist influence of first Prime Minister Jawaharlal Nehru. The process began with the setting up of the Planning Commission in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community.

The Planning Commission was charged with the responsibility of making assessments of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilization of resources and determining priorities.

Disruptions in Five Year Plans

However, the inception of 1st 5year plan began in 1951 with two subsequent five-year plans being formulated till 1965 when there was a break because of the Indo-Pakistan Conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year plan was started in 1969 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. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.

Detailed Outline of Five Year Plans in India

First Five Year Plan

Characteristics: Scheduled from 1951 to 1956 with a targeted growth of 2.1% based on the Harrod-Domar Model. The planning during this plan period focused on power, agriculture, transport and price stability gave the problems arising on account of food shortages mainly, aggravated by mounting inflation and influx of refugees. The plan is also credited for major Irrigation projects including Bhakra Dam, Mettur Dam andHirakud Dam.

Objectives: It achieved an actual growth of 3.6% while accommodating refugees, overcoming food shortages and by control of prices.

Second Five Year Plan

Characteristics: Scheduled from 1956 to 1961 with a target growth of 4.5%. Its Model was prepared by Prof. P C Mahalanobis therefore it is also referred to as Mahalanobis Plan. By this time the insecurities related to food shortage were over and the country has achieved economic stability which led to the decision of improvising huge imports. It introduced the Industrial Policy based on economic policy targeting the establishment of a socialistic pattern for society.

Objectives: It achieved an actual growth of 4.3% which is less as compared to its expected outcomes leading to its moderate success focused towards industrialization instead of agriculture.

Third Five Year Plan

Characteristics: Scheduled from 1961 to 1966 with a targeted growth of 5.6%. This plan derived experiences from the previous two plans where agriculture was given priority to improve the Indian economy and to support foreign exports and industries. It targeted a self-sufficient and self-generating economy for India. But owing to the disputed approach its focus shifted towards defence development With unforeseen events including the 1962 Chinese aggression, the Indo-Pak war in 1965 and severe drought from 1965-66.

Objectives: It achieved an actual growth of 2.8% which was below the expected average and hence was declared a failure.

Plan Holidays

Characteristics: India witnessed three annual plans from 1966 to 1969 this period is referred to as Plan holidays. The Failure of the Third Plan lead to the introduction of three separate short-term plan proposals to overcome the prevailing crisis in fields of agriculture due to serious food shortage and a completely new agricultural strategy was introduced for wide-spread distribution of high-yielding varieties of seeds, extensive use of fertilizers, and exploitation of irrigation potential along with a focus on soil conservation.

Objectives: These short-term plans helped the Indian economy to overcome the damages caused by Third Five year plan and lead the path forward.

Fourth Five Year Plan

Characteristics: Scheduled from 1969 to 1974 with a targeted growth of 5.7% it was based on the objective of achieving growth with stability and self-reliance because allies refused to supply essential raw materials during the Indo-Pak war. Therefore, the plan emphasised agricultural production to enable other sectors to gain stability.

However, during the first two years, the plan saw record production but towards its last three years, the production got affected due to weather impacts and seasonal variation. Further, the plan also has to confront impacts from the influx of Bangladeshi refugees before and after the Indo-Pak war along with the deteriorating price situation.

Objectives: It achieved an actual growth of 3.9%, very less as compared to the expected outcomes and was considered a big failure except for the initiation of Family Planning Programmes to control and regulate population growth.

Fifth Five Year Plan

Characteristics: Scheduled from 1974 to 1979 with a targeted growth of 4.4% its draft was prepared and launched by D.P. Dhār. It was prepared because of the economic crisis arisen on account of a hike in oil prices and the failure of the Government in taking over the wholesale trade in wheat specifically. It proposed the objectives of achieving self-reliance along with poverty removal.

However, after the declaration of emergency in 1975, the focus was shifted towards the implementation of the Prime Ministers’ 20 Point Programme and later in 1978 this plan was terminated.

Objectives: It achieved a growth rate of 4.8% and owing to the high inflation and cost calculations proved wrong and lead to the revision of sector outlay being revised upwards.

Sixth Five Year Plan

Characteristics: Scheduled from 1980 to 1985 with a targeted growth of 5.2% has its major focus on the Increase in national income and modernization of technology while controlling population growth and ensuring poverty removal through employment schemes including TRYSEM – Training of Rural Youth for Self Employment, IRDP – Integrated Rural Development Programme, NREP – National Rural Employment Programme, etc.

Objectives: It achieved an actual growth of 5.7% and is broadly considered successful in achieving most of its targets.

Seventh Five Year Plan

Characteristics: Scheduled from 1985 to 1990 with a targeted growth of 5.0% this plan has concentrations in the areas of improving the food and employment sectors while enhancing their productivity and creating of further opportunities. It achieved a growth rate more than its target and therefore is considered successful.

Objectives: It achieved an actual growth rate of 6.0% instead of its target of 5.0%.

Eighth Five Year Plan

Characteristics: Scheduled from 1992 to 1997 with targeted growth of 5.6% this has witnessed a postponement of two years duration due to the political unrest at the Centre. Later this plan undertook the policy measures to combat the weak economic situation under the leadership of Prime Minister Shri P.V. Narasimha Rao via the introduction of fiscal & economic reforms leading to the liberalisation in terms of rapid economic growth. It witnessed high growth in fields of the agricultural sector, manufacturing sector, exports and imports sector, trade sector and the prevailing deficit in the accounting sector.

Objectives: It achieved an actual growth of 6.8% which was the highest growth rate achieved in the history of Indian planning.

Ninth Five Year Plan

Characteristics: Scheduled from 1977 to 2001 with a targeted growth of 6.5% this plan was targeted towards Growth With Social Justice & Equality. This prioritised the private sector as well as the Foreign direct investment (FDI) to facilitate growth in the economy while involving the social sector through investment in infrastructures related to education, health etc. this aimed toward the eradication of poverty and prioritisation of agricultural& rural development for generating sufficient Employment opportunities.

Objectives: It achieved an actual growth of 5.4% and hence was considered moderately successful.

Tenth Five Year Plan

Characteristics: Scheduled from 2002 to 2007 with a targeted growth of 8% this plan considered other targets for development along with the economic growth target including a reduction in gender gaps in literacy and wage rate, reduction in Infant & maternal mortality rates, improvement in literacy and access to potable drinking water, cleaning of major polluted rivers, etc. While giving due importance to the role of Governance towards development, the role of Panchayati Raj was given prominence and a state-wise growth target break up was established to achieve a balanced development throughout India.

Objectives: It achieved an actual growth of 7.6% while prioritising the role of states in planning and development with agriculture, declared as the prime moving force of the economy.

Eleventh Five Year Plan

Characteristics: Scheduled from 2007 to 2012 the plan has a target growth of 9% as this was aimed Towards Faster Inclusive Growth. This plan is characterized by various interrelated components of rapid growth, elimination of poverty, creation of employment opportunities, access to essential services and basic infrastructure in health & education for the poor class, ensuring environmental sustainability focusing on air quality and forest cover, removal of gender inequality etc. This also emphasised the improvement of connectivity in rural areas by targeting:

• Telephone Connections And Broad Band Connectivity To All Villages By 2012
• Road Connections To Settlements Carrying Population 1000 And Above By 2009
• Electricity Connection To All Villages By 2009

Objectives: This achieved an actual growth of 8%. The constraints available to investible funds are responsible for its below-target performance.

Twelfth Five Year Plan

Characteristics: Scheduled from 2012 to 2017 The Twelfth Plan is an ongoing plan which started during the second financial crisis of the global economy. Where the sovereign debt problems of the Eurozone, erupted leading to a financial crisis affecting the whole world including India. Therefore its priority was to bring economic stability back to ensure inclusive and sustainable growth.

This plan aims towards Inclusiveness through poverty reduction, improving regional balance, reducing inequality, empowering people etc and sustainability is targeted through improved health, skill development, development of institutional capabilities, development ininformation technology and infrastructure services like power, telecommunication, roads, etc. where the area of energy in prioritised through the adoption of NELP- New Exploration Licensing Policy.

Objectives: The Twelfth Plan lays out ambitious programmes, helping India to achieve its objective of inclusive and sustainable growth.