Five Year Plan of India: Objectives, Approach to Plan and Concepts

Planning plays an important role in the smooth functioning of an economy. In 1950, the Government set up the Planning Commission to create, develop, and execute India’s five-year plans. In the article, we will look at each five year plan of India and how it helps achieve the basic objectives of growth, employment, self-reliance, and also social justice. Further, it also takes into account the new constraints and possibilities to make the necessary directional changes and emphasis.

Objectives of Five Year Plan of India

The objectives of these five-year plans were as follows:

Economic Growth
Economic Equity and Social Justice
Full Employment
Economic Self-Reliance
Modernisation

The Approach to each Five Year Plan of India

Here is a quick overview of India’s Five Year Plans:

First Five Year Plan of India (1951-56)

On December 8, 1951, the Prime Minister Jawaharlal Nehru presented the first five-year plan to the Parliament of India. This was based on the Harrod-Domar model. At that time, India was facing three problems – the influx of refugees, a severe shortage of food, and also mounting inflation.

India had to recover from the partition and the disequilibrium in the economy due to the Second World War. The First Plan, therefore, had the objectives of rehabilitating refugees, agricultural development, and self-sufficiency in food along with controlling inflation.

Five Year Plan of India

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Second Five Year Plan of India (1956-61)

The focus of the Second Plan was rapid industrialization, especially the development of heavy industries and capital goods, like iron, steel, chemicals, etc. and the machine building industries. Professor Mahalanobis developed the plan.

Third Five Year Plan of India (1961-66)

The primary goal of the Third Plan was to establish India as a self-reliant and a self-generating economy. However, the Second Plan had slowed the rate of growth of agricultural production in the country which limited India’s economic development.

Therefore, the Third Plan included agricultural development as one of its objectives to achieve balanced, regional development. Unfortunately, this period had many misfortunes which drained the funds – Indo-China war in 1961-62, Indo-Pak war in 1965-66, and also a severe drought-led famine in 1965-66. Therefore, this plan could not meet its objectives.

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Three Annual Plans

From 1966-69, three Annual Plans were devised. While the Fourth Plan was designed in 1966, it was abandoned under the pressure of drought, currency devaluation, and inflationary recession on the economy. Therefore, the government opted for an Annual Plan in 1966-67 and the subsequent two years. This is period is also called – Plan Holiday.

Fourth Five Year Plan of India (1969-74)

There were two principal objectives of this plan – ‘Growth with Stability’ and ‘Progressive Achievement of Self-Reliance’. It aimed at a 5.5 percent average growth rate of the national income and also the provision of the national minimum for the weaker sections of the society (called ‘Garibi Hatao’ or ‘Growth with Justice’). However, another Indo-Pak war in 1971-72 created a financial crunch for the plan.

Fifth Five Year Plan of India (1974-79)

This plan had two main objectives – the removal of property and attainment of self-reliance. This was planned through the promotion of higher growth rates, better income distribution, and also a significant increase in the domestic rate of saving.

It also focused on import substitution and export promotion. Further, it included a National Program on Minimum Needs like housing, drinking water, primary education, etc.

Annual Plan (1978-80)

Also called the Rolling Plan, it helped to achieve the targets of the previous years.

Sixth Five Year Plan of India (1980- 85)

This plan focused on the socio-economic infrastructure in the rural areas. Further, it endeavored to eliminate rural poverty and reduce regional disparities through the Integrated Rural Development Program (IRDP – 1979).

Seventh Five Year Plan of India (1985 – 90)

The country enjoyed a reasonable rate of economic growth (5.4 percent) during the Sixth Plan. The Seventh Plan focused on the rapid production of foodgrains along with an increase in the creation of employment and overall productivity. The guiding principles were growth, modernization, self-reliance, and social justice.

Eighth Five Year Plan of India (1992 – 97)

The Eighth Plan was scheduled to be introduced in April 1990. However, there were many changes in the Government at the Center, which led to the reconstitution of the Planning Commission and the preparation of different versions of the approach to the Eighth Plan.

Finally, in 1992, the Eighth Plan was introduced (fourth version). At this time, the country was going through a severe economic crisis and the Government initiated fiscal reforms to provide a new dynamism to the economy.

Ninth Five Year Plan of India (1997 – 2002)

The South East Asian Financial Crisis (1996-97) caused an overall slowdown in the economy of India too. While the liberalization process was still criticized, India was out of the fiscal mess of the early 1990s. The Plan targeted a high growth rate of 7 percent and also directed itself towards time-bound social objectives.

Further, the Plan focused on the seven Basic Minimum Services (BMS) with a view to achieving complete population coverage in a time-bound manner. The BMS includes:

Safe drinking water
Primary health service
Universalization of primary education
Public housing assistance to shelter-less families
Nutritional support to children
Connectivity of all villages and habitations
Streamlining the public distribution system

Tenth Five Year Plan of India (2002 – 07)

Some major aspects of this Plan were:

Double the per capita income in 10 years
Higher growth rates must translate into better quality of life for people
Set monitorable targets
Consideration of governance as a factor of development
Policy and institutional reforms in all sectors
Declaring the agriculture sector as the primary moving force (PMF) of the economy
Emphasis on the social sector (health, education, etc.)

Eleventh Five Year Plan of India (2007-12)

The title of the 11th Plan was ‘Towards Faster and more Inclusive Growth’. It envisaged a high growth rate of around 9 percent implying a growth rate of around 7.5 percent in the per capita GDP. It also ensured an overall improvement in the quality of life of people. The vision of the 11th Plan includes:

Rapid growth with reducing poverty and increasing employment opportunities
Easy access to essential services in health and education for the poor
Empowerment through education and development of skills
Using the National Rural Employment Guarantee Program to extend employment opportunities to all
Environmental sustainability
Reducing gender inequality
Improving the overall governance

Twelfth Five Year Plan of India (2012 – 17)

According to this plan, ‘It must be guided by a vision of India moving forward in a manner that would ensure a broad-based improvement in the living standards of all the people through a growth process which is faster than in the past, more inclusive, and also more environmentally sustainable.‘ The objectives of this Plan are as follows:

A growth rate of 9 percent
Focus on the agricultural sector and have an average growth of 4 percent during the Plan period
Restrain inflationary pressure
For the growth of GDP, ensure that the commercial energy supplies grow at a rate of 6.5-7 percent per year.
Develop a holistic water management policy
Suggest new legislation for the acquisition of land
Continue focus on health, education, and skill development
Large investments in the development of the infrastructure sector
Emphasis on the process of fiscal correction
Efficient use of available resources

Solved Question

Q1. What are the objectives of the 12th Five Year Plan of India?

Answer:

The objectives of the 12th Five Year Plan of India include:

Achieving a growth rate of 9 percent
Ensuring a growth rate of 4 percent in the agricultural sector
Ensuring that the commercial energy supplies grow at a rate of 6.5-7 percent per year
Developing a holistic water management policy
Continuing the focus on health, education, and development of skills
Focusing on the development of the infrastructure sector
Emphasize on fiscal correction
Using resources efficiently

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Five Year Plans of India