(Sample Materials) Gist of India Year Book 2013 – “Planning”

Contents of the Chapter:

• Introduction
• Annual Plans
• First Plan
• Eight Plan
• Second Plan
• Ninth Plan
• Third Plan
• Tenth Plan
• Fourth Plan
• Eleventh Five Year Plan
• Fifth Plan
• Education
• Sixth Plan
• Environment
• Seventh Plan
• MCQs for Final Practice

Introduction

In India planning derives its objectives and social premises
from the Directive Principles of State Policy enshrined in the Constitution
(Article 40). The Planning Commission was set up by a Resolution of the
government of India in March 1950.

First Plan

• Keeping in view the large-scale import of foodgrains in
  1951 and inflationary pressures on the economy, the First Plan (1951-56)
  accorded the highest priority to agriculture including irrigation and power
  projects. About 44.6 per cent of the total outlay of 2,069 crore in the
  public sector (later raised to _ 2,378 crore) was allocated for this
  purpose. The Plan aimed at increasing the rate of investment from five to
  about seven per cent of the national income.

Second Plan

• The Second Five-Year Plan (1956-57 to 1960-61) sought to
  promote a pattern of development, which would ultimately lead to the
  establishment of a socialistic pattern of society in India. Its main aims
  were (i) an increase of 25 per cent in the national income; (ii) rapid
  industrialisation with particular emphasis on the development of basic and
  heavy industries; (iii) large expansion of employment opportunities; and
  (iv) reduction of inequalities in income and wealth and a more even
  distribution of economic power. The Plan aimed at increasing the rate of
  investment from about seven per cent of the national income to 11 per cent
  by 1960-61. It laid emphasis on industrialisation, increased production of
  iron and steel, heavy chemicals including nitrogenous fertilizers and
  development of heavy engineering and machine building industry.

Third Plan

• The Third Plan (1961-62 to 1965-66) aimed at securing a
  marked advance towards self-sustaining growth. Its immediate objectives were
  to: (i) secure an increase in the national income of over five per cent per
  annum and at the same time ensure a pattern of investment which could
  sustain this rate of growth in the subsequent Plan periods; (ii) achieve
  self-sufficiency in foodgrains and increase agricultural production to meet
  the requirements of industry and exports; (iii) expand basic industries like
  steel, chemicals, fuel and power and establish machine building capacity so
  that the requirements of further industrialisation could be met within a
  period of about 10 years mainly from the country’s own resources; (iv) fully
  utilise the manpower resources of the country and ensure a substantial
  expansion in employment opportunities; and (v) establish progressively
  greater equality of opportunity and bring about reduction in disparities of
  income and wealth and a more even distribution of economic power. The Plan
  aimed at increasing the national income by about 30 per cent from _ 14,500
  crore in 1960-61 to about _ 19,000 crore by 1965-66 (at 1960-61 prices) and
  per capita income by about 17 per cent from 330 to 386 over the same period.

Annual Plans

• The situation created by the Indo-Pakistan conflict in
  1965, two successive years of severe drought, devaluation of the currency,
  general rise in prices and erosion of resources available for Plan purposes
  delayed the finalisation of the Fourth Five Year Plan. Instead, between 1966
  and 1969, three Annual Plans were formulated within the framework of the
  draft outline of the Fourth Plan.

Fourth Plan

• The Fourth Plan (1969-74) aimed at accelerating the tempo
  of development of reducing fluctuations in agricultural production as well
  as the impact of uncertainties of foreign aid. It sought to raise the
  standard of living through programmes designed to promote equality and
  social justice. The Plan laid particular emphasis on improving the
  conditions of the less privileged and weaker sections especially through
  provision of employment and education. Efforts were directed towards
  reduction of concentration of wealth, income and economic power to promote
  equity. The average annual compound rate of growth envisaged was 5.7 per
  cent.

Fifth Plan

• The Fifth Plan (1974-79) was formulated against the
  backdrop of severe inflationary pressures. The major objectives of the Plan
  were to achieve self-reliance and adopt measures for raising the consumption
  standard of people living below the poverty line. This Plan also gave high
  priority to bring inflation under control and to achieve stability in the
  economic situation. It targeted an annual growth rate of 5.5 per cent in the
  national income. Four Annual Plans pertaining to the Fifth Plan period were
  completed. It was subsequently decided to end the Fifth Plan period with the
  close of the Annual Plan 1978-79.

Sixth Plan

• Removal of poverty was the foremost objective of the
  Sixth Plan (1980-85). The strategy adopted was to move simultaneously
  towards strengthening the infrastructure for both agriculture and industry.
  Stress was laid on tackling inter-related problems through a systematic
  approach with greater management, efficiency and intensive monitoring in all
  sectors and active involvement of people in formulating specific schemes of
  development at the local level and securing their speedy and effective
  implementation. The average annual growth rate targeted for the Plan was 5.2
  per cent.

Seventh Plan

• The Seventh Plan (1985-90) emphasised policies and
  programmes, which aimed at rapid growth in foodgrains production, increased
  employment opportunities and productivity within the framework of basic
  tenets of planning, namely, growth, modernisation, self-reliance and social
  justice. Foodgrains production during the Seventh Plan grew by 3.23 per cent
  as compared to a long-term growth rate of 2.68 per cent between 1967-68 and
  1988-89 and the growth rate of 2.55 per cent in the eighties due to overall
  favourable weather conditions, implementation of various thrust programmes
  and concerted efforts of the Government and the farmers. To reduce
  unemployment and consequently, the incidence of poverty, special programmes
  likeJawahar Rozgar Yojana were launched in addition to the existing
  programmes. Due recognition was accorded to the role, small-scale and food
  processing industries could play in this regard. During this Plan period,
  the Gross Domestic Product (GDP) grew at an average rate of 5.8 per cent
  exceeding the targeted growth rate by 0.8 per cent.

Annual Plans

• The Eighth Five-Year Plan (1990-95) could not take off
  due to the fast-changing political situation at the Centre. The new
  Government, which assumed power at the Centre in June 1991, decided that the
  Eighth Five-Year Plan would commence on 1st April 1992 and that 1990-91 and
  1991-92 should be treated as separate Annual Plans. Formulated within the
  framework of the Approach to the Eighth Five-Year Plan (1990-95), the basic
  thrust of these Annual Plans was on maximisation of employment and social
  transformation.

Eighth Plan

• The Eighth Five-Year Plan (1992-97) was launched
  immediately after the initiation of structural adjustment policies and macro
  stabilisation policies, which were necessitated by the worsening Balance of
  Payments position and the position of inflation during 1990-91. The various
  structural adjustment policies were introduced gradually so that the economy
  could be pushed to a higher growth path and improve its strength and thus
  prevent a crisis in Balance of Payments and inflation in the future. The
  Eighth Plan took note of some of these policy changes, which were to come
  about due to these reforms. The Plan aimed at an average annual growth rate
  of 5.6 per cent and an average industrial growth rate of about 7.5 per cent.
  These growth targets were planned to be achieved with relative price
  stability and substantial improvement in the country’s Balance of Payments.
  Some of the salient features of economic performance during the Eighth
  Five-Year Plan indicate, among other things, (a) a faster economic growth,
  (b) a faster growth of the manufacturing sector and agriculture and allied
  sectors, (c) significant growth rates in exports and imports, improvement in
  trade and current account deficit and a significant reduction in the Central
  Government’s fiscal deficit. However, a shortfall in expenditure in the
  Central sector due to inadequate mobilisation of internal and extra
  budgetary resources by the PSUs and various departments was witnessed. In
  the States sector, the reason for the shortfall was lack of mobilisation of
  adequate resources due to deterioration in the balance of current revenues,
  erosion in the contribution of state electricity boards and state road
  transport corporations, negative opening balance, mounting non-Plan
  expenditure and shortfalls in the collection of small savings, etc.

• The Eighth Plan envisaged an annual average growth rate
  of 5.6 per cent. Against this an average growth rate of 6.8 per cent was
  achieved during this plan period.

Ninth Plan

• The Ninth Plan (1997-2002) was launched in the fiftieth
  year of India’s Independence. The Plan aimed at achieving a targeted GDP
  growth rate of seven per cent per annum and there was emphasis on the seven
  identified Basic Minimum Services (BMS) with additional Central Assistance
  earmarked for these services with a view to obtaining a complete coverage of
  the population in a time-bound manner. These included provision of safe
  drinking water, availability of primary health service facilities,
  universalisation of primary education, public housing assistance to
  shelter-less poor families, nutritional support to children, connectivity of
  all villages and habitations and stream-lining of the public distribution
  system with a focus on the poor. The Plan also aimed at pursuing a policy of
  fiscal consolidation, whereby the focus was on sharp reduction in the
  revenue deficit of the Government, including the Centre, States and PSUs
  through a combination of improved revenue collections and control of
  inessential expenditures, particularly with regard to subsidies and through
  recovery of user charges and decentralisation of planning and implementation
  through greater reliance on States and Panchayati Raj Institutions.

• The Ninth Plan envisaged an average target growth rate of
  6.5 per cent per annum in GDP as against the growth rate of 7 per cent
  approved earlier in the Approach Paper. The scaling down of the target was
  necessitated by the changes in the national as well as global economic
  situation in the first two years of the Ninth Plan. Against this, the
  achievement in the growth-rate on an average was to be 5.5 per cent per
  annum.

Tenth Five-Year Plan

• The Tenth Five-Year Plan (2002-07) was approved by the
  National Development Council on 21st December 2002. The Plan has further
  developed the NDC mandate objectives, of doubling the per capita income in
  ten years and achieving a growth rate of eight per cent of GDP per annum.
  Since economic growth is not the only objective, the Plan aims at harnessing
  the benefits of growth to improve the quality of life of the people by
  setting the following key targets: Reduction in the poverty ratio from 26
  per cent to 21 per cent, by 2007; Decadal Population Growth to reduce from
  21.3 per cent in 1991-2001 to 16.2 per cent in 2001-11; Growth in gainful
  employment, at least, to keep pace with addition to the labour force; All
  children to be in school by 2003 and all children to complete five years of
  schooling by 2007; Reducing gender gaps in literacy and wage rates by 50 per
  cent; Literacy rate to increase from 65 per cent in 1999-2000, to 75 per
  cent in 2007; Providing potable drinking water to all villages; Infant
  Mortality Rate to be reduced from 72 in 1999-2000, to 45 in 2007; Maternal
  mortality ratio be reduced from four in 1999-2000, to two in 2007; Increase
  in Forest/ Tree cover from 19 per cent in 1999-2000, to 25 per cent in 2007;
  and Cleaning of major polluted river stretches.

• The Tenth Plan has identified measures to improve
  efficiency, unleash entrepreneurial energy and promote rapid and sustainable
  growth. Agriculture is to be the core element of the Tenth Plan. Key reforms
  for the agriculture sector include: Eliminating inter-state barriers to
  trade and commerce; Essential Commodities Act to be amended; Amending
  Agriculture Produce Marketing Act; Liberalising agri-trading, agri-industry
  and exports; Encouraging contract farming and permitting leasing in and
  leasing out of agriculture lands; Replacement of various acts dealing with
  food by one comprehensive ‘Food Act’; Permit futures trading in all
  commodities; Removal of restrictions on financing of stocking and trading.

• The average growth rate in the last four years of the
  10th Plan (2003-04 to 2006-07) was little over 8 per cent, making the growth
  rate 7.7 per cent for the entire 10th plan period. Though this was below the
  10th Plan target of 8 per cent, it is the highest growth rate achieved in
  any plan period.

Eleventh Five Year Plan

• The Eleventh Five Year Plan (2007-12) which was approved
  by the National Development Council on 19 December, 2007 provides a
  comprehensive strategy for inclusive development, building on the growing
  strength of the economy, while also addressing weaknesses that have
  surfaced. It sets a target for 9 per cent growth in the five year period
  with acceleration during the period to reads 10 per cent by the end of the
  plan. It also covers 26 other major indices of performance relating to
  poverty, health, education, women and children, infrastructure, and
  environment and sets monitorable targets in each of these. This plan
  outlines the new priories for the public sector. These relate to reviving
  dynamism in agriculture and building the necessary supportive infrastructure
  in rural areas, expanding access to health and education, especially in
  rural areas, undertaking programmes for improving living conditions for the
  weaker section and for improving their access to economic opportunity. It
  also includes a major thrust for infrastructure development in general,
  which is a critical constraint on our development.

• The plan adopts multi-pronged approach towards
  improvement in Agriculture. It provides a major expansion in the programmes
  of irrigation and water management. As a step towards food security, the
  National Food Security Mission aims at increasing cereal and pulses
  production by 20 million tons over a five year period. There is a massive
  thrust in this Plan on access to education and health. In education the Plan
  will spend more than double of what was spent in the tenth plan. In health,
  the Plan aims at providing improved broad based health care in rural areas
  through the National Rural Health Mission. The Rashtriya Swashya Bima Yojana
  will provide the much needed insurance cover against illness to the
  population below the poverty line.

• The Plan emphasizes the need for energy conservation,
  increasing energy efficiency, and development of renewable sources of
  energy. An important aspect of the Eleventh Plan is that most of the public
  sector programmes are in the areas that are normally in the domain of the
  State Governments and where implementation depends upon the active
  involvement of local level bodies including the Panchayati Raj Institutions,
  More than any other Plan, this Plan places a much greater reliance upon the
  involvement of the Panchayati Raj Institutions.

Twelfth Five Year plan (2012-17)

• The broad vision and aspiration which the Twelfth Plan
  seeks to fulfill are reflected in the subtitle: ‘Faster Sustainable, and
  More Inclusive Growth’. The simultaneous achievement of each of these
  elements is critical for the success of the Plan.

Growth Prospects

• The Approach paper to the Twelfth Plan, approved by the
  National Development Council (NDC) in 2011, had set a target of 9 per cent
  average growth of GDP over the Plan period. That was before Euro zone crisis
  in that year trigged a sharp downturn in global economic prospects, and also
  before the extent of the slowdown in the domestic economy was known. A
  realistic assessment of the growth prospects of the economy in the Twelfth
  plan period is given in chapter 2. It concludes that the current slowdown in
  GDP growth can be reversed though strong corrective action, including
  especially an expansion in investment with a corresponding increase in
  savings to keep inflationary pressures under control. However, while our
  full growth potential remains around 9 per cent, acceleration to this level
  can only occur in a phased manner, especially since the global economy is
  expected to remain weak toward bringing GDP growth back to an inclusive 9
  per cent in the last two years of the plan, which will yield an average
  growth rate of about 8.2 per cent in the Plan period. The outcome is
  conditional on many policy actions as is described in scenario one.

• Within the aggregate GDP growth target, two sub-targets
  are especially important for inclusiveness. These are a growth rate of 4 per
  cent for the agricultural sector over the Twelfth Plan period and around 10
  per cent in the last two years of the Plan for the manufacturing sector.

• The Twelfth Plan’s strategy for growth depends crucially
  on productivity gains as one of the key drives of growth. Productivity is
  the additional contribution to growth after taking account of the effect of
  capital accumulation and growth in labour. These traditional sources of
  growth are not likely to be enough for India in the coming years and we must
  therefore focus much more on productivity improvements among all
  constituents: big businesses, MSMEs, framers and even governments. This can
  be done by improving the business regulatory environment, strengthening the
  government. This can be done by improving the business regulatory
  environment, strengthening the governance capacity of States, investing more
  in infrastructure rather than subsidies, and by using Science and Technology
  (S&T) to drive innovation.

Sample MCQ:

1. Consider the following statements about national
population policy – 2000:

1. Medium-term objective is to bring total fertility rate to replacement
   level by 2010.
2. Long term objective is to achieve population stabilization by 2005.

Which of the above statements is / are correct?

1. 1 only
2. 2 only
3. Both 1 & 2
4. Neither 1 nor 2

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