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

(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


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.

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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

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

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

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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