Sunday, October 12, 2008

India's Five Year Plans

Ever since India got its independence, we are working our economy as per the Five Year Plans. This system of framing Five Year Plans was a good arrangement devised, by which the growth in different spheres could be suggested monitored while functioning and changed if the necessity arose. These mega plans have served us as building blocks of our national economy. A brief overview of these plans would give us a fairly clear picture of our developmental programmes. These plans would also highlight for us the targets set through these fifty years of India’s independence.
The First Five Year Plan came into existence for the years 1951 – 1956. This had a public sector outlay of Rs. 2356 crore – while the actual expenditure was only Rs. 1960 crores. The Private Sector investment was 1800 crores. The chief features of this plan was the spread of community development projects and an effort to raise the living standards of the people.
The Second Five Year Plan was to cover the period from 1956 – 1961. this plan had its set objective in industrialization – the building up of rural India and the enhancing of employment opportunities. Now, in this Plan, the Public Sector outlay was Rs. 4800 crores, and the actual expenditure was only Rs. 4672 crores. The Private Sector investment was Rs. 3110 crores. It was in this period that the National income rose by 19.5 per cent.
The Third Five Year Plan covered the period from 1961 – 1966. This Plan targeted an increase in the national income by about 5% per annum. Besides this, self sufficiency in food and the development of sectors like steel, fuel, machinery and power had become the prime objectives. The public sector outlay was Rs. 7500 croes and expenditures was Rs. 8577 crores. Private sector investment was now Rs. 4190 crores. This plan failed owing to price rise of about 20 per cent, Chinese aggression, Indo – Pak conflict and to cap it all a poor monsoon. All these factors contributed to failure of this plan. The year 1964 – ’65, was declared as a period of ‘Plan Holiday’.
The Forth Five Year Plan was then made to cover the period of 1969 – 74. This Plan had two main objectives. It had ensured that growth would be followed with stability and self reliance.
At this time still another target to be followed was the attainment of social justice and upliftment of the weaker sections of the society. In this plan, the Public Sector outlay was Rs. 15902 crores, and that of the Private Sector was Rs. 8980 crores. It seems that, the target levels were always now being set too high and so, here again the target growth of 5.7% was never achieved.
The Fifth Five Year Plan dates from 1974 – 79. This plan once agains aimed to remove poverty and achieving self reliance. This plan started a minimum need programme with measures for checking inflation. This time the outlay for the public sector was Rs. 3030 crores and the private sector outlay was Rs. 2704 crores. This plan was terminated in the fourth year only i.e. 1978 only. The national income increased at 5.2 per cent.
The Sixth Five Year Plan covered the period from 1980 – 85. This Plan had several objectives like growth rate of the economy, reduction in poverty and unemployment, improvement in the general quality of life. An eye was also to be kept on the growth of population and improvement was to be made in the ecological and environmental assets of the nation. Provising the Public Sector outlay was made Rs. 97500 crores that for and the private sector was Rs. 75710 crores. In the process of this plan period, the national income grew at 5.4 per cent per annum.
The Seventh Plan period covered the years 1985 – ’90. This also targeted growth in the production of food grains, the increase of opportunities of employment and the raising of productivity in all sectors of economy. Now the public sector outlay was Rs. 180,00 crores. In this period many targets were even exceeded. The annual growth rate of GDP was 5.8 per cent as against the plan target of 5 per cent. The production of food grains increased however, public sector savings fell short of the target. The gap between income and expenditure of the Government increased.
The Eight Five Year Plan was from the year 1992 – ’97. This was delayed by two years. This plan had also set for itself several objectives, like the generation of employment, control of population growth, spread of elementary education and the growth of economy, in order to enable the Indian economy to compete with major free markets of the world.
The Ninth Five Year Plan was to cover the year from 1997 to 2002 and has an outlay of Rs. 8,80,000 crores. This plan was rather ambitious.
With an overview of the Indian Five Year Plan we can say that they have undoubtedly been tools in the boosting and the shaping of our economy. We have been able to meet many of the objectives laid down by the plans. These plans have succeeded in building the industrial and economic infrastructure of the country. The growth of the Private Sector can also be attributed to these plans.
These plans have helped us in building ourselves, but, they are not without their limitations and bottlenecks. The major setbacks are redtapism, bureaucratic delays, unstable Governments, misallocation of resources to non priority areas. With these on going hazards, our economy faces a slowdown and thus, the growth rate is now less than 5%. The core sectors are being ignored by planners in the interest of their short term gains.
While making such plans we must remember to project a well balanced plan so that development of infrastructure and improvement of standard of living of the messes go hand in hand. So, in brief, we can say that such plans form a very good and efficient system but such planning should be balanced and must be worked in a systematic way. Goals must be set for all sections of our society and we must ensure that the implementation of these set goals are followed to the last word and it must be seen that the goals must see that all sections of the society grow along simultaneously.
However, down the line, there has been something wrong, somewhere and that is why as we see the economic scenario in India there is a considerable gaping gap between the haves and the Have Nots. This in itself indicates that there has been something intrinsically wrong in our economic policies which have made the rich become richer and the poor become poorer. This not the purpose of any develop in economy. The year’s financial programming must see that the benefits accrue to the poorest of the poor. We have had slogans of Garibi Hatao but, in practice they were just eye catching slogans, not apparently meant to be followed by successive Governments of the last fifty decades. If this slogan had been earnestly worked upon, be sure we would not find this poverty in India, and India trailing behind in the list of third world powers.