Five-Year Plans of India

Since 1947, the Indian economy has been premised on the concept of planning. This has been
carried through the Five-Year Plans, developed, executed, and monitored by thePlanning
Commission (NITI Aayog after 2014). With the Prime Minister as the ex-officio Chairman, the
commission has a nominated Deputy Chairman, who holds the rank of a Cabinet
Minister. Montek Singh Ahluwalia is the last Deputy Chairman of the Commission (resigned on 26
May 2014). The Eleventh Plan completed its term in March 2012 and the Twelfth Plan is currently
underway.[1] Prior to the Fourth Plan, the allocation of state resources was based on schematic
patterns rather than a transparent and objective mechanism, which led to the adoption of
the Gadgil formula in 1969. Revised versions of the formula have been used since then to
determine the allocation of central assistance for state plans.[2] The new government led
by NarendraModi, elected in 2014, has announced the dissolution of the Planning Commission,
and its replacement by a think tank called the NITI Aayog (an acronym for National Institution for
Transforming India).

History[edit]
Five-Year Plans (FYPs) are centralized and integrated national economic programs. Joseph
Stalin implemented the first FYP in the Soviet Union in the late 1920s. Most communist states
and several capitalist countries subsequently have adopted them. China and India both continue
to use FYPs, although China renamed its Eleventh FYP, from 2006 to 2010, a guideline (guihua),
rather than a plan (jihua), to signify the central governments more hands-off approach to
development. India launched its First FYP in 1951, immediately after independence under
socialist influence of first Prime Minister Jawaharlal Nehru.[3]
The First Five-Year Plan was one of the most important because it had a great role in the
launching of Indian development after the Independence. Thus, it strongly supported agriculture
production and it also launched the industrialization of the country (but less than the Second
Plan, which focused on heavy industries). It built a particular system ofmixed economy, with a
great role for the public sector (with an emerging welfare state), as well as a growing private
sector (represented by some personalities as those who published the Bombay Plan).

First Plan (19511956)[edit]

The first Indian Prime Minister, Jawaharlal Nehru presented the First Five-Year Plan to
the Parliament of India and needed urgent attention. The First Five-year Plan was launched in
1951 which mainly focused in development of the primary sector. The First Five-Year Plan was
based on the HarrodDomar model with few modifications.
The total planned budget of Rs.2069 crore(2378 crore later) was allocated to seven broad
areas: irrigation and energy (27.2%), agriculture and community development
(17.4%),transport and communications (24%), industry (8.4%), social services (16.64%), land
rehabilitation (4.1%), and for other sectors and services (2.5%). The most important feature of
this phase was active role of state in all economic sectors. Such a role was justified at that time
because immediately after independence, India was facing basic problemsdeficiency
of capital and low capacity to save.
The target growth rate was 2.1% annual gross domestic product (GDP) growth; the achieved
growth rate was 3.6% the net domestic product went up by 15%. The monsoon was good and
there were relatively high crop yields, boosting exchange reserves and the per capita income,
which increased by 8%. National income increased more than the per capita income due to rapid
population growth. Many irrigation projects were initiated during this period, including
the Bhakra, Hirakud and Damodar Valley dams. The World Health Organization (WHO), with
the Indian government, addressed children's health and reduced infant mortality, indirectly
contributing to population growth.

At the end of the plan period in 1956, five Indian Institutes of Technology (IITs) were started as
major technical institutions. The University Grants Commission (UGC) was set up to take care of
funding and take measures to strengthen the higher education in the country. Contracts were
signed to start five steel plants, which came into existence in the middle of the Second Five-Year
Plan. The plan was quasi successful for the government.

Second Plan (19561961)[edit]

The Second Plan was particularly in the development of the public sector and "rapid
Industrialisation". The plan followed the Mahalanobis model, an economic developmentmodel
developed by the Indian statistician Prasanta Chandra Mahalanobis in 1953. The plan attempted
to determine the optimal allocation of investment between productive sectors in order to
maximise long-run economic growth. It used the prevalent state of art techniques of operations
research and optimization as well as the novel applications of statistical models developed at
the Indian Statistical Institute. The plan assumed a closed economy in which the main trading
activity would be centred on importing capital goods.[4][5]
Hydroelectric power projects and five steel plants at Bhilai, Durgapur, and Rourkela were
established with the help of Russia, Britain (the U.K) and West Germany
respectively.Coal production was increased. More railway lines were added in the north east.
The Tata Institute of Fundamental Research and Atomic Energy Commission (AEC) was
established as research institutes. In 1957 a talent search and scholarship program was begun
to find talented young students to train for work in nuclear power.
The total amount allocated under the Second Five-Year Plan in India was Rs.48 billion. This
amount was allocated among various sectors: power and irrigation, social services,
communications and transport, and miscellaneous.
The target growth rate was 4.5% and the actual growth rate was 4.27%. [6] 1956-industrial policy.

Third Plan (19611966)[edit]

The Third Five-year Plan stressed agriculture and improvement in the production of wheat, but
the brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus
towards the defence industry and the Indian Army. In 19651966, India fought a War with
Pakistan. There was also a severe drought in 1965. The war led to inflation and the priority was
shifted to price stabilisation. The construction of dams continued.
Many cement and fertilizer plants were also built. Punjab began producing an abundance
of wheat.
Many primary schools were started in rural areas. In an effort to bring democracy to the grassroot level, Panchayat elections were started and the states were given more development
responsibilities.
State electricity boards and state secondary education boards were formed. States were made
responsible for secondary and higher education. State road transportation corporations were
formed and local road building became a state responsibility.
The target growth rate was 5.6%, but the actual growth rate was 2.4%.[6]
Due to miserable failure of the Third Plan the government was forced to declare "plan holidays"
(from 196667, 196768, and 196869). Three annual plans were drawn during this intervening
period. During 196667 there was again the problem of drought. Equal priority was given to
agriculture, its allied activities, and industrial sector. The government of India declared
"Devolution of Rupee" to increase the exports of the country. The main reasons for plan holidays
were the war, lack of resources, and increase in inflation after that plan holiday was created.

Fourth Plan (19691974)[edit]

At this time Indira Gandhi was the Prime Minister. The Indira Gandhi government nationalised 14
major Indian banks and the Green Revolution in India advanced agriculture. In addition, the
situation in East Pakistan (now Bangladesh) was becoming dire as the Indo-Pakistan War of
1971 and Bangladesh Liberation War took funds earmarked for industrial development. India
also performed the Smiling Buddha underground nuclear test (Pokhran-1) in Rajasthan on May
18,1974, partially in response to the United States deployment of the Seventh Fleet in the Bay of
Bengal. The fleet had been deployed to warn India against attacking West Pakistan and
extending the war.
The target growth rate was 5.6%, but the actual growth rate was 3.3%.[6]

Fifth Plan (19741978)[edit]

The Fifth Five-Year Plan laid stress on employment, poverty alleviation (GaribiHatao),
and justice. The plan also focused on self-reliance in agricultural production and defence. In
1978 the newly elected Morarji Desai government rejected the plan. The Electricity Supply Act
was amended in 1975, which enabled the central government to enter into power generation and
transmission.[7][citation needed]
The Indian national highway system was introduced and many roads were widened to
accommodate the increasing traffic. Tourism also expanded. The twenty-point programme was
launched in 1975. It was followed from 1974 to 1979.
The target growth rate was 4.4% and the actual growth rate was 5%. [6]

Rolling Plan (19781980)[edit]

The Janata Party government rejected the Fifth Five-Year Plan and introduced a new Sixth FiveYear Plan (19781980). This plan was again rejected by the Indian National
Congress government in 1980 and a new Sixth Plan was made.The Rolling Plan consists of
three kind of plans that were proposed. The First Plan is for the present year which comprises
the annual budget and Second is a plan for a fixed number of years, which may be 3, 4 or 5
years. Plan number two is kept changing as per the requirements of theIndian economy. The
Third Plan is a perspective plan which is for long terms i.e. for 10, 15 or 20 years. Hence there is
no fixation of dates in for the commencement and termination of the plan in the rolling plans. The
main advantage of the rolling plans is that they are flexible and are able to overcome the rigidity
of fixed five year plans by mending targets,the object of the exercise, projections and allocations
as per the changing conditions in the countrys economy. The main disadvantage of this plan is
that if the targets are revised each year, it becomes very difficult to achieve them which are laid
down in the five-year period and it turned out to be a complex plan. Frequent revisions make
them resulted in instability of the economy which are essential for its balanced development and
progress.

Sixth Plan (19801985)[edit]

The Sixth Five-Year Plan marked the beginning of economic liberalisation. Price controls were
eliminated and ration shops were closed. This led to an increase in food prices and an increase
in the cost of living. This was the end of Nehruvian socialism. The National Bank for Agriculture
and Rural Development was established for development of rural areas on 12 July 1982 by
recommendation of the Shivaraman Committee. Family planning was also expanded in order to
prevent overpopulation. In contrast to China's strict and binding one-child policy, Indian policy did
not rely on the threat of force[citation needed]. More prosperous areas of India adopted family planning
more rapidly than less prosperous areas, which continued to have a high birth rate.

The Sixth Five-Year Plan was a great success to the Indian economy. The target growth rate was
5.2% and the actual growth rate was 5.4%.[6] The only Five-Year Plan which was done twice.
[clarification needed]

Seventh Plan (19851990)[edit]

The Seventh Five-Year Plan marked the comeback of the Congress Party to power. The plan laid
stress on improving the productivity level of industries by upgrading of technology.
The main objectives of the Seventh Five-Year Plan were to establish growth in areas of
increasing economic productivity, production of food grains, and generating employment through
"Social Justice".
As an outcome of the Sixth Five-Year Plan, there had been steady growth in agriculture, controls
on the rate of inflation, and favourable balance of payments which had provided a strong base
for the Seventh Five-Year Plan to build on the need for further economic growth. The Seventh
Plan had strived towards socialism and energy production at large. The thrust areas of the
Seventh Five-Year Plan were: social justice, removal of oppression of the weak, using modern
technology, agricultural development, anti-poverty programmes, full supply of food, clothing, and
shelter, increasing productivity of small- and large-scale farmers, and making India an
independent economy.
Based on a 15-year period of striving towards steady growth, the Seventh Plan was focused on
achieving the prerequisites of self-sustaining growth by the year 2000. The plan expected the
labour force to grow by 39 million people and employment was expected to grow at the rate of
4% per year.
Some of the expected outcomes of the Seventh Five-Year Plan India are given below:

Balance of payments (estimates): Export 330 billion (US$4.9 billion), Imports (-)
540 billion (US$8.0 billion), Trade Balance (-)210 billion (US$3.1 billion)

Merchandise exports (estimates): 606.53 billion (US$9.0 billion)

Merchandise imports (estimates): 954.37 billion (US$14.2 billion)

Projections for balance of payments: Export 607 billion (US$9.0 billion), Imports
(-) 954 billion (US$14.2 billion), Trade Balance- (-) 347 billion (US$5.2 billion)

Under the Seventh Five-Year Plan, India strove to bring about a self-sustained economy in the
country with valuable contributions from voluntary agencies and the general populace.
The target growth rate was 5.0% and the actual growth rate was 6.01%. [8]

Annual Plans (19901992)[edit]

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre
and the years 199091 and 199192 were treated as Annual Plans. The Eighth Plan was finally
formulated for the period 1992-1997.

Eighth Plan (19921997)[edit]

198991 was a period of economic instability in India and hence no five-year plan was
implemented. Between 1990 and 1992, there were only Annual Plans. In 1991, India faced a
crisis in foreign exchange (forex) reserves, left with reserves of only about US$1 billion. Thus,
under pressure, the country took the risk of reforming the socialist economy. P.V.
NarasimhaRao was the tenth Prime Minister of the Republic of India and head of Congress
Party, and led one of the most important administrations in India's modern history, overseeing a
major economic transformation and several incidents affecting national security. At that time

Dr. Manmohan Singh (later Prime Minister of India) launched India's free market reforms that
brought the nearly bankrupt nation back from the edge. It was the beginning
of liberalization, privatisation and globalization (LPG) in India.
Modernization of industries was a major highlight of the Eighth Plan. Under this plan, the gradual
opening of the Indian economy was undertaken to correct the burgeoning deficitand foreign debt.
Meanwhile, India became a member of the World Trade Organization on 1 January 1995. The
major objectives included, controlling population growth, poverty reduction, employment
generation, strengthening the infrastructure, institutional building, tourism management, human
resource development, involvement of Panchayatirajs,NagarPalikas, NGOs, decentralisation and
people's participation.
Energy was given priority with 26.6% of the outlay. An average annual growth rate of 6.78%
against the target 5.6%[6] was achieved.
To achieve the target of an average of 5.6% per annum, investment of 23.2% of the gross
domestic product was required. The incremental capital ratio is 4.1. The saving for investment
was to come from domestic sources and foreign sources, with the rate of domestic saving at
21.6% of gross domestic production and of foreign saving at 1.6% of gross domestic production.
[9]

Ninth Plan (19972002)[edit]

The Ninth Five-Year Plan came after 50 years of Indian Independence. AtalBihari Vajpayee was
the Prime Minister of India during the Ninth Five-Year Plan. The Ninth Five-Year Plan tried
primarily to use the latent and unexplored economic potential of the country to promote economic
and social growth. It offered strong support to the social spheres of the country in an effort to
achieve the complete elimination of poverty. The satisfactory implementation of the Eighth FiveYear Plan also ensured the states' ability to proceed on the path of faster development. The
Ninth Five-Year Plan also saw joint efforts from the public and the private sectors in ensuring
economic development of the country. In addition, the Ninth Five-Year Plan saw contributions
towards development from the general public as well as governmental agencies in both the rural
and urban areas of the country. New implementation measures in the form of Special Action
Plans (SAPs) were evolved during the Ninth Five-Year Plan to fulfill targets within the stipulated
time with adequate resources. The SAPs covered the areas of social infrastructure, agriculture,
information technology and Water policy.
Budget
The Ninth Five-Year Plan had a total public sector plan outlay of 859,200 crore (US$130 billion).
The Ninth Five-Year Plan also saw a hike of 48% in terms of plan expenditure and 33% in terms
of the plan outlay in comparison to that of the Eighth Five-Year Plan. In the total outlay, the share
of the center was approximately 57% while it was 43% for the states and the union territories.
The Ninth Five-Year Plan focused on the relationship between the rapid economic growth and
the quality of life for the people of the country. The prime focus of this plan was to increase
growth in the country with an emphasis on social justice and equity. The Ninth Five-Year Plan
placed considerable importance on combining growth oriented policies with the mission of
achieving the desired objective of improving policies which would work towards the improvement
of the poor in the country. The Ninth Five-Year Plan also aimed at correcting the historical
inequalities which were still prevalent in the society.
Objectives
The main objective of the Ninth Five-Year Plan was to correct historical inequalities and increase
the economic growth in the country. Other aspects which constituted the Ninth Five-Year Plan
were:

Population control

Generating employment by giving priority to agriculture and rural development

Reduction of poverty

Ensuring proper availability of food and water for the poor

Availability of primary health care facilities and other basic necessities

Primary education to all children in the country

Empowering the socially disadvantaged classes like Scheduled castes, Scheduled

tribes and other backward classes

Developing self-reliance in terms of agriculture

Acceleration in the growth rate of the economy with the help of stable prices

Strategies

Structural transformations and developments in the Indian economy.

New initiatives and initiation of corrective steps to meet the challenges in the economy of
the country.

Efficient use of scarce resources to ensure rapid growth.

Combination of public and private support to increase employment.

Enhancing high rates of export to achieve self-reliance.

Providing services like electricity, telecommunication, railways etc.

Special plans to empower the socially disadvantaged classes of the country.

Involvement and participation of Panchayati Raj institutions/bodies and Nagar Palikas in

the development process.

Performance

The Ninth Five-Year Plan achieved a GDP growth rate of 5.4% against a target of 6.5%

The agriculture industry grew at a rate of 2.1% against the target of 4.2%

The industrial growth in the country was 4.5% which was higher than that of the target of
3%

The service industry had a growth rate of 7.8%.

An average annual growth rate of 6.7% was reached.

The Ninth Five-Year Plan looks through the past weaknesses in order to frame the new
measures for the overall socio-economic development of the country. However, for a wellplanned economy of any country, there should be a combined participation of the governmental
agencies along with the general population of that nation. A combined effort of public, private,
and all levels of government is essential for ensuring the growth of India's economy.

The target growth was 7.1% and the actual growth was 6.8%.

Tenth Plan (20022007)[edit]

The main objectives of the Tenth Five-Year Plan were:

Attain 8% GDP growth per year

Reduction of poverty rate by 5% by 2007

Providing gainful and high-quality employment at least to the addition to the labor force

Reduction in gender gaps in literacy and wage rates by at least 50% by 2007

20-point program was introduced

Target growth: 8.1% growth achieved: 7.7%

The tenth plan was expected to follow a regional approach rather than sectoral approach
to bring down regional inequalities
Expenditure of 43,825 crore (US$6.5 billion) for tenth five years

Out of total plan outlay, 921,291 crore (US$140 billion) (57.9%) was for central government
and 691,009 crore (US$100 billion) (42.1%) was for states and union territories.

Eleventh Plan (20072012)[edit]

Rapid and inclusive growth.(Poverty reduction)

Emphasis on social sector and delivery of service therein.

Empowerment through education and skill development.

Reduction of gender inequality.

Environmental sustainability.

To increase the growth rate in agriculture,industry and services to 4%,10% and 9%

respectively.

Reduce Total Fertility Rate to 2.1

Provide clean drinking water for all by 2009.

Increase agriculture growth to 4%.

Twelfth Plan (20122017)[edit]

Main article: 12th Five-Year Plan (India)

The Twelfth Five-Year Plan of the Government of India has been decided for the growth rate at
8.2% but the National Development Council (NDC) on 27 Dec 2012 approved 8% growth rate for
12th five-year plan.[10]
With the deteriorating global situation, the Deputy Chairman of the Planning Commission Mr
Montek Singh Ahluwalia has said that achieving an average growth rate of 9 percent in the next
five years is not possible. The Final growth target has been set at 8% by the endorsement of plan
at the National Development Council meeting held in New Delhi.
"It is not possible to think of an average of 9% (in 12th Plan). I think somewhere between 8 and
8.5 percent is feasible, Mr Ahluwalia said on the sidelines of a conference of State Planning
Boards and departments. The approached paper for the 12th Plan, approved last year, talked
about an annual average growth rate of 9%.
When I say feasible... that will require major effort. If you dont do that, there is no God given
right to grow at 8 percent. I think given that the world economy deteriorated very sharply over the
last year...the growth rate in the first year of the 12th Plan (201213) is 6.5 to 7 percent.
He also indicated that soon he should share his views with other members of the Commission to
choose a final number (economic growth target) to put before the countrys NDC for its approval.
The government intends to reduce poverty by 10% during the 12th Five-Year Plan. Mr Ahluwalia
said, We aim to reduce poverty estimates by 9% annually on a sustainable basis during the Plan
period. Earlier, addressing a conference of State Planning Boards and Planning departments, he
said the rate of decline in poverty doubled during the 11th Plan. The commission had said, while
using the Tendulkar poverty line, the rate of reduction in the five years between 200405 and
200910, was about 1.5%points each year, which was twice that when compared to the period
between 199395 to 200405.[11] The plan aims towards the betterment of the infrastructural
projects of the nation avoiding all types of bottlenecks. The document presented by the planning
commission is aimed to attract private investments of up to US$1 trillion in the infrastructural
growth in the 12th five-year plan, which will also ensure a reduction in subsidy burden of the
government to 1.5 percent from 2 percent of the GDP (gross domestic product). The UID (Unique
Identification Number) will act as a platform for cash transfer of the subsidies in the plan.

Five-Year Plans: With

Objectives and Achievements
Article shared by

The following points highlight the top five year plans.

I. First Five Year Plan:

Prior to first five year plan, Indian economy was backward. Population was
increasing more as compared to economic growth.
The situation of trade and industries was far from satisfaction. The rate of
capital formation was at low level. The per capita income in the country was
also very low.

Objectives:
The main objectives of the First Five Year Plan are explained as
under:
ADVERTISEMENTS:

1. To reform the countrys economy.

2. To solve the food problem.
3. To raise the standard of living.
4. To provide social and economic justice.

Achievements:
Increase in National Income:
ADVERTISEMENTS:

The First Five Year sustained the hope of the planners by making headway
in achieving its targets and ambitious objectives to a larger extent. The
national income rose from Rs. 9110 crores to Rs. 10800 crores from 195051 to 1956-57 at the price level of 1953-54.
The per capita income increased by 11 per cent and per capita
consumption by 8 per cent over the same period. The net domestic saving
was Rs. 756 crore in 1955-56 against Rs. 455 crore in 1950-51.
Agricultural Development:
ADVERTISEMENTS:

In the field of agriculture, total food-grains was 69.3 million tones against
the target of 62.6 million tones. The index number of agricultural production
for all crops increased from 26 to 117 during the period of 1950-51 to 195556 (1949-50 = 100). During this period, the import of foodstuffs led to a
drastic reduction.
In 1954, only 0.8 million tones of food-grains valued at Rs. 47.02 crore was
imported as compared to 4.7 million tones at a total value of Rs. 216 crore
in 1951. The production of some major crops like rice, wheat and cotton
was recorded to be 28.7 million tones, 8.9 million tones and 4.2 million
bales against its targets of 27.7 million tones, 3.4 million tones and 4.8
million bales respectively.
Industrial Production:
Industrial production has recorded the increase to the extent of 38 per cent.
Total gross investment in fixed capital in the private sector was about Rs.
340 crore.
ADVERTISEMENTS:

The progress of production and expansion of capacity was satisfactory in

the case of Sindri Fertilizer Factory, Chittaranjan Locomotive Factory,
Indian Telephone Industries, Integral Coach Factory, Cable Factory and
Pencillin Factory. A new plant of iron and steel was set with a capacity of
35000 tones of pig iron.
Irrigation and Railway Development:
Irrigation facilities were extended to 16 million acres of land. Out of it, 10
million acres through small works and 6 million through major works. The
work on a number of multipurpose river projects like BhakraNangal,

Damodar Valley and Hirakund was accelerated and many more new
projects were started on KosiKoyna, Rihand and Chambal.
In rail transport, the traffic carried between 1951-52 to 1955-56 in terms of
tones originating increased by about 8 per cent. All the commencement of
the plan, Indian Railways has 8209 locomotives, 19225 coaches and
222441 wagons on the line which increased to 9262 locomotives 23779
coaches and 266049 wagons by ending 1955-56.
Miscellaneous Achievements:
A significant achievement during the plan period was of launching
Community Development and National Extension Services programme on
2nd October, 1952. This programme covered 78 million persons in 143000
villages situated in 1075 development blocks ending 1955- 56.
The number of co-operative societies rose from 180000 to 240000 and the
number of members from 13.72 to 17.62 millions, 53000 new agricultural
credit societies were registered with total number of members 1.60 lakhs,
44 extension training centres were established.
Education:
The percentage of facilities of schooling for children in the age group of 611 was 42.0 per cent which rose to 51.0 per cent from 1950-51 to 1955-56.
There were 209671 primary and 7288 high/higher secondary schools in
1950-51 which increased to 274038 and 106000 in 1955-56 respectively.
The number of training institutions for basic education was recorded 449 in
1955-56 against its number 114 in 1950-51. There were 8600 medical
institutions with 113000 beds in 1950-51. There were 8600 medical
institutions with 113000 beds in 1950-51 which increased to 10000 with
125000 beds during 1955-56.

Balance of Payment:
The balance of payment position was quite satisfactory. In the original plan
estimates, an average annual deficit of Rs. 180 to 220 crore was visualised
but the actual expenditure was of amounting Rs. 96 crore. So far as sterling
balance was concerned the withdrawal was of only Rs. 138 crore against
Rs. 290 crore.

II. Second Five Year Plan:

The second period of second five year plan was April 1, 1956 to May 31,
1961. The main purpose of the plan was to establish socialistic pattern of
society.

Objectives:
The main objectives of the Second Five Year Plan are as under:
(i) Sizeable increase in the national income to raise the level of living.
(ii) Rapid industrialisation with special emphasis on the development of
basic and heavy industries;
(iii) Large expansion of employment opportunities;
(iv) Reduction of inequalities in income and wealth and a more even
distribution of economic power.

Achievements:
Foreign Exchange:
The plan witnessed a severe drain on the foreign exchange resources of
the country. The reserves were drawn by about Rs. 540 crore during the
period of 1955-56 to 1959-60 which was due to the large trade deficits. In
1959-60, Indias external payment position continued to reflect this very
trend with the foreign exchange reserves declining by Rs. 16 crore.

Agricultural Development:
In the case of agriculture, the index number rose to 135 in 1960-61 from
116.8 in 195-56. The production was recorded 76 million tones in 1960-61
against 658 million tones in 1955-56. The overall increase was 16 per cent.
The production of cotton, sugarcane and oilseeds was 5.1 million bales, 8
million tones and 7.1 million tonnes ending 1960-61 while it was registered
4.0 million bales, 5.1 million tones and 5.6 million tones respectively in
1955-56.
The total area under food grain crops was 113.4 million acres in 1960- 61
while it was 105.3 million acres during 1955-56. The rate of growth in
agriculture sector was 44.6 per cent in 1956-57 and 6.5 per cent in 196061.
Power Programmes:
The power programmes suffered a setback because of foreign exchange
hardships. Even then, total number of villages/towns electrified in the
country was 21396 ending March 1960. About 16000 kilometres of
transmission lines with operating voltage about 33 KV were erected during
the plan period.
Industrial Development:
The tempo of industrial advancement gathered momentum during the
second plan period. The country for the first item started producing large
quantities of machinery, machine tools, heavy electrical equipments and
scientific instruments. Furthermore, opening was made in the field of
tractors, newsprint, motor-cycles, scooters, sulpha, DDT, Dyestuffs.

Similarly, rapid progress was acknowledged in the case of durable

consumer goods such as sewing machines, bicycles, fans, radios and other
electric goods.
The discovery of petroleum reserves in the Sibsagar area of Assam and in
the Bombay. Ankleshwar area of Gujarat was another vent in this plan. The
index of industrial production (1950-51 =100) rose by forty per cent. The
production of steel ingots was 3.5 million tones and of finished steel 2.2
million tones. In coal, the production was registered to be 54.6 million
tones.
General Development:
The programmes for railway and ports were carried out substantially. In
1960-61, the railway carried a freight of 154 million tones. There were 1813
locomotives. 6091 coaching vehicles and 85526 wagons during 1959-60.
During 1959-60, 105 miles of missing links and bypasses and 10 major
bridges were constructed. Number of passenger vehicles increased from
44744 to about 46000 ending 1959-60.
In the field of education, additional schooling facilities at elementary stage
were provided to about 2 lakh children ending March, 1961. The centrally
sponsored scheme for the expansion of girl education and training of
women teachers was implemented by almost all states.
The total numbers of primary health units were recorded 2500 ending
March, 1960. The strength of doctors increased from 7000 to 68,000 during
the same period.

III. Third Five Year Plan:

The Third Five Year Plan was a continuation of the previous plan designed
to provide India a self generating and self-reliance economy by 1975-76.

However, it aimed at:

(a) To secure an increase in national income of over 5 per cent per annum,
the pattern of investment being designed so as to sustain this rate of
growth during the subsequent plans;
(b) To achieve self sufficiency in food-grains and increase agricultural
production to meet the requirement of industry and exports;
(c) To expand the basic industries such as steel, chemical industries, power
and also establish machine building capacity so that the requirements of
further industrialisation can be met within a period of ten years or so mainly
from the countrys own resources;
(d) To utilise to the fullest possible extent the manpower resources of the
country and to ensure a substantial expansion in employment
opportunities;
(e) To establish progressively greater equality of opportunity and to bring
about reduction in disparities in income and wealth and a more even
distribution of economic power.

Achievements:
National Income:
The rate of growth of national income was less than half of the rate 5 per
cent per annum. In 1964-65, it was registered to the tune of 2.5, 1.7 and
4.9 per cent respectively. In 1965-66, it declined to 4.2 per cent.
Agricultural and Power Development:
In agriculture sector, there was stagnation during the first three years while
in 1964- 65, there was bumper record and again in the year of 1965-66 its

production declined to unprecedented floods and droughts. As a whole,

agricultural production went down by 7.4 per cent.
The output of food-grains was about 76 million tones against its target of
100 million tones. The aggregate index of production was 159.4 in 1964-65
considering 1949-50 = 100.
The average growth rate of generating capacity was 12.5 per cent during
1965-66 while installed generating capacity was 10.17 million KW in the
same year against installed generating capacity of 5.65 million KW at the
beginning of 1960-61.
Industrial Development:
The increase in industrial output considering 1960 as base year stood at
8.2 per cent in 1961-62, 9.6 per cent in 1962-63, 9.2 per cent in 1963-64
and 8.3 per cent in 1964.65. Thereafter, there was sharp deterioration in
the rate of growth of output. It fell to 4.3 per cent in 1965-66.
The production in the case of iron ore, diesel engines, cloth textile,
machinery and soda ash was registered to the extent of 24.46 million
tones, 93.1 thousands, 200 million rupees and 33.1 tones, respectively
ending 1965-66. While it was 11 million tones, 44.7 thousands, 104 million
rupees and 152 tones at the start of the plan period.
Village and Small Scale Industries:
The progress of village and small scale industries was also encouraging
during the first two years and later on showed downward trend due to
shortage of raw materials followed by hostilities of 1962 and 1965. The
production of handloom and power-loom increased from 2013 million
metres in 1960 to 3056 million in 1965-66.

The total share in production of cloth was 30.4 per cent in 1960 while it
rose to 40.0 per cent in 1965-66. The production of all varieties of Khadi
including woolen and silk increased from 53.76 million sq. metres in 196061 to 84.85 million sq. metres in 1965-66. The industry provided
employment to nearly 2 million persons.
Railway Development:
The total length of railway route rose from 56247 kms. to 59399 kms,
passengers originating from 1594 million to 2082 million over the plan
period. Commercial vehicles increased from 225 thousand to 333 thousand
over the same period.
In coastal and overseas shipping, in 1965-66, its number was recorded
1540 and 323 thousand GRT while it was 857 and 313 thousand GRT
respectively in 1960-61. On the other hand, the capacity of Indian Airlines
was 155 million toneskms, in 1965-66 against its number of 113 million
toneskms in 1961-62.
Education:
In the sphere of elementary education age group of 6-14, there was 48.7
per cent in 1961-62 which increased to 59.6 per cent in 1965-66. The total
enrolment of 0.03 million in secondary education rose to 5.19 million over
the same period. This was 16.7 per cent in 1965-66 against 11.1 per cent in
1960-61. The enrolment in science courses percentage of total enrolment
increased from 25.7 million to 41.5 million during the period from 1961-62
to 1965-66.

IV. Fourth Five Year Plan:

The Fourth Five Year Plan should ordinarily have commenced in 1966 on
the expiry of the Third Five Year Plan. The necessary preparatory work had

already been undertaken but its finalisation was delayed due to severe
threats like hostilities of 1962 and 1965 and the steep fall in agricultural
production over two successive years 1965-66 and 1966-67, and
devaluation of Indian Rupee in June 1966.
The Planning Commission which was reconstituted in September 1967, felt
that the five year period of the Fourth Plan should commence from 1969
and the year of 1968-69 should have an annual plan as of 1966-67 and
1967- 68. Therefore, the document of the Fourth Plan for 1969-74,
reaffirmed the objective enunciated in the previous plans and included the
policies and programmes which would promote the attainment of self
reliance with adequate growth rate and accelerate the progress towards a
socialist society.

Objectives:
Fourth Five Year Plan have following objectives:
(a) Feasible rates of growth as indicated in the direction of becoming free
from dependence on foreign aid by providing priority to increase agricultural
and industrial sector;
(b) Measures to maintain stability in the prices and to set up consistent
economic policies which would lead towards the goal of mixed economy;
(c) Priority would be given to enlarge the income of the rural population and
augment the supply of food. Efforts would be made to maximise the
production.
(d) For ensuring continued growth in various industries like machinery,
chemicals, mines, power and transport which are useful for self-reliance,
connected schemes would be expedited for keeping up the momentum

already built and making the basic needs of the country in the next five year
plan period;
(e) For the development of human resources, additional facilities would be
provided particularly in rural areas.

Achievements:
National Income and Balance of Payment:
The plan envisaged an average annual compound growth rate of 5.7 per
cent. Against this projected growth, the economy experienced a rate of
growth of 5.2 per cent in 1969-70, 4.2 per cent in 1970-71, 1.7 per cent in
1971-72, and 0.6 per cent in 1972-73. The rate of domestic saving rose
from 8.4 per cent to 13.6 per cent during the plan period and the rate of
investment from 9.5 per cent to 14.4 per cent over the same period.
During the first three years of the Fourth Plan, the balance of payment was
fairly stable but in the later period, all was not well in the economy. The
drought of 1972-73 compelled the country to go in for large imports of foodgrains when the world prices of food-grains had gone up to unprecedented
levels.
The import prices of other major requirements such as petroleum,
petroleum products, fertiliser, iron, steel, non-ferrous metals and newsprint
also increased manifold.
Agriculture Production:
The production of food-grains was estimated to rise from 98 million tones to
129 million tones but it was registered only 104.7 million tones in 1973-74 ;
thereby the increase was of 7.2 per cent against its targeted increase of
31.6 per cent. The highest level of production was 108 million tones in

1970-71. The output of pulses had deteriorated in spite of favourable price

trend.
As against the target of 15.0 million tones, the production was hardly 10.0
million tones in 1973-74. The total area of food crops under irrigation was
35.2 million hectares whereas non-food crops under irrigation was recorded
4.8 million hectares in 1973- 74.
The chemical fertilizers in terms of nitrogenous and phosphatic was
recorded 10.58 lakh and 4.1 lakh tones respectively ending 1973-74. The
ultimate irrigation potential of 107 million hectares, a potential of 44.9
million hectares was recorded in 1973-74.
Industrial Development:
The rate of growth in the industrial sector was only 3.9 per cent annual. The
industrial production growth rate declined from 6.8 per cent in 1969-70 to
3.7 per cent in 1970-71 but it increased to 4.5 per cent in 1971-72 and at
around 5 per cent during 1972-73-74. The production of steel ingot was 7.4
million tones against 10.8 million tones ; finished steel was of 5.4 million
tones against 8.1 million tones ; cotton textile machinery of Rs. 300 million
against Rs. 450 million ; petroleum of 7.7 million tones against 8.5 million
tones.
General Development:
In social welfare activities, substantial progress was achieved. The number
of primary health centres and sub-centres rose to 5250 and 33000 by the
end of 1973-74 against its number of 4919 and 22826 respectively in 196869. Similarly, the number of doctors and nurses also increased from
102520 and 61000 to 138000 and 88000 in the same period.

V. Fifth Five Year Plan:

During the course of presentation of the draft the Fifth Five Year Plan,
unfortunately coincided with a major upheaval on the international
economic scene which largely affected the developed and developing
countries. Political leaders and economists all over the world were aware of
this collapse.
The sharp increase in the prices of food, fertilizers and oil seriously upset
the assumption on which draft had been framed. Mrs. Indira Gandhi, while
addressing the news conference warned against the economic challenges
and hoped that the people will face these problems with unity and in a
spirit of co-operation.
Defending the Governments attitude towards these hardships, she
said, Many things are not foreseen. It is always possible to have
hindsight. The poor people have faced the challenges with a stout
heart. But for the public distribution system these people would not
have got even their rations.
In the meanwhile on the implementation of the Plan, Dr.Minhas resigned.
Thus, putting aside his argument, Mrs. Gandhi and Planning Minister
Mr.Dhar called for small plan and sacrificing the industrial core, jeopardies
self-reliance and unrealistic projections.

Objectives:
1. 5.5 per cent overall rate of growth of gross domestic product;
2. Expansion of productive employment;
3. A national programme for minimum needs;
4. Extended programme of social welfare;

5. Stress on agriculture, key and basic industries producing goods for mass
consumption.

Achievements:
National Income:
Though the Fifth Five Year Plan was suspended one year earlier than its
tenure, even then, its progress could be considered fairly satisfactory and
be compared with the complete period of five years. The growth rate of
national income ending fifth plan period was 5.4 per cent at the price index
of 1970-71. The average growth rate of per capita income was 2.92 per
cent due to high growth of population.
Agricultural and Social Sector:
The agricultural production showed tremendous favorable trends. The
annual rate of growth of agricultural production grew at the rate of 4.58 per
cent against its target rate of 3.3 per cent. The total food-grains production
was of the order of 125.6 million tonnes in 1978-79 while oilseed was
registered of 8.9 million tones. The gross irrigated area was recorded 48.41
million hectares during the same period.
The total coverage under soil and water conservation was 21.7 million
hectare in 1977-78 About 78000 Gobar Gas Plants were installed by the
end of plan period. Agricultural Co-operative Credit Societies advanced Rs.
1626 crore which contained Rs. 1340 crore for short term, Rs. 95 crore for
medium and long term and Rs. 291 crore for land development
respectively. The storage capacity available for food-grains was about 14
million tones ending 1977.78.
Industrial Development:

During the plan period of 1974-79, village and small industries registered a
growth rate of 6.8 per cent per annum. The gross value added at factor
cost rose from Rs. 2800 crore in 1973-74 to Rs. 4100 crore in 1979-80 (at
price of 1970-71) registering a growth rate of 6.6 per cent per annum. The
employment has increased in Village and Khadi industries from 8.84 lakh
and 9.27 lakh in 1973.74 to 11.24 lakh in 1979-80.
The growth rate of industrial production was around 6.2 per cent. The
production of coal, crude oil and iron ore was recorded to the tune of 104
million tones, 11.77 million tones and 39 million tones respectively in 197879.
General Development:
The traffic by railway in terms of tone kilometres gone up from about 122.4
billion net tone kilometres in 1973-74 to 162.7 billion net tones kilometers in
1977- 78. 5549 kms.of new national highways were added during the plan
period and total surfaced road length was 623402 kms ending March 1979.
During the period of 1974-80, 20259 post offices were opened, raising its
number to 1.3 lakh. Besides, 11970 telegraphic offices and 8825 long
distance public call offices were opened. The total enrolment in elementary
education has been recorded 905 lakh during the plan period. About 1.84
lakh villages had been benefited from water supply schemes.

VI. Sixth Five Year Plan:

In the Sixth Five Year Plan (1978-83) (envisaged during the Janta
Government at Centre); the National Development council discussed the
document Draft Plan 1978-83 under the chairmanship of the Prime Minister
of March 18/19, 1978 and approved the programme such as removal of

unemployment, reduction in poverty and inequalities and the continues

progress towards self- reliance.
This clearly showed a clear cut shift in the strategy of planning. For the first
time, Planning Commission acknowledged the denial of Social justice to the
poorest sections of population. Draft Five Year Plan 1978-83 stated, what
matters is not the precise rate of increase in the national product that is
achieved in five or ten years but whether we can ensure within specified
time frame a measurable increase in the welfare of the million of the poor.
Therefore, Mahalanobis strategy of heavy industry development was
condemned. With its revised priorities, the Janta Government Strategy
favoured Gandhian solution which stressed for the development of cottage
and small industries based on labour-intensive techniques. Another
significant change was noticed in the field of industrial development i.e.
liberalising the economy by making extension in the area of private sector
and liberal imports.

Objectives:
The objectives of Sixth Five Year plan are as under:
() Promotion of efficiency in the use of resources and improved
productively;
(b) Strengthening the impulses of modernisation for the achievement of
economic and technological self-reliance;
(c) A progressive reduction in the incidence of poverty and unemployment;
(d) A speedy development of indigenous sources of energies;
(e) Improving the quality of life of the people in general with special
reference to the economically and socially handicapped population;

(f) Strengthening the distribution bias of public policies and services in

favour of weaker sections of society;
(g) A progressive reduction in regional inequalities;
(h) Promoting policies for controlling the growth of population through
voluntary acceptance of the small family norm;

Achievements:
Balance of Payment:
The export and import ending 1984-85 was recorded to the order of Rs.
9962 crore and Rs. 15600 crore respectively. The trade balance was ()
21.0 against its projection of () 17.8. The disappointing performance of
export was related to an unusual combinations of adverse internal and
external developments.
Horticultural and Plantation Crops:
The production of vegetables and potatoes was recorded during 1984-85
as 40.00 million tones and 16.00 million tones respectively. The production
of coconut was also satisfactory. Fruits also showed the production of
23.50 million tones in 1984-85 against its target of 24.40 million tones.
In the same manner, the production of tea was of little less than the target.
It was 645 million kgs in 1984-85 against target of 705 million kgs but
coffees production was more than target 20000 thousand tonnes of
production was estimated in 1984-85 when it was only 118.6 thousand
tones in 1980-81.
Crop Production and Selected Inputs:
In the sixth plan, it was proposed to have replacement rate of 10 per cent
for the pollinated crops like wheat and paddy, 100 per cent for hybrids and

5 per cent for pulses and oil seeds. In states like Madhya Pradesh, they are
very much low, which it attributed to countless reasons, as high sale prices
of the seeds and lack of popularising certified seeds.
On the other hand, higher replacement rate in some of the states like
Assam, Manipur and Tripura (vary from 30 to 60 per cent) are due to the
fact that it is not possible for the cultivators of these states to have their
own seeds because of the agro-climatic conditions.
Agricultural Credit and Storage Capacity:
The co-operative with their country wide network of 94089 primary
agricultural credit societies constitute the most significant agency in terms
of volume of loan advanced and territorial coverage. Commercial banks
have over 36000 semi urban and rural branches and regional rural banks
number 182 with 8727 branches as on March 31, 1985.
Through these agencies, disbursement of credit has risen from Rs. 2550
crore in 1979-80 to Rs. 5810 crore in 1984-85.
Another important development in the field of agricultural credit was the
establishment of the National Bank for Agriculture and Rural Development
(NABARD) in July, 1982. Its business has gone up from the level of Rs. 703
crore in 1982-83 to Rs. 1056 crore in 1984-85.
Animal Husbandry and Dairying:
The number of veterinary hospitals and dispensaries rose from 12017 in
1979-80 to 14849 in 1984-85. Besides 19286 Veterinary First Aid Centres
were established against the plan target of 18483 to provide animal health
facilities near the doorsteps of farmers.

Similarly, the number of liquid milk plants were recorded 166 in 1984-85
against its number of only 142 in 1979-80. For marketing of eggs, 111 egg
and poultry production cum marketing centres were established during the
plan period. Three sponsored Dairy development Projects in the districts of
Dorrang, Dibrugarh, Sibsagar.

VII. Seventh Five Year Plan (1985-90):

The draft of Seventh Five Year Plan approved by National Development
Council on Nov. 9, 1985. It was noted that since independence the
inception of planning, Indian economy has made steady progress towards
the basic objectives of building an independent, self-reliance economy. The
plan sough to emphasize polices, which would accelerate the growth in
food-grain production, increase in employment and raise productivity.

Achievements:
Agriculture:
The first three years were of the poor monsoon years. 150.4 million tones
of food-grains was recorded in 1985- 86 which was lower than the previous
peak production of 152.4 million tones in 1983-84. The second year 198687 recorded decline to 143.4 million tones and followed decline to 138.4
million tones in 1987-88.
This set back to agricultural production in these years to be seen against
the background of the long-term growth rate of agricultural output around
2.6 per cent for the period from 1949-50 to 1984-85; the growth rate
between 1978-79 and 1984-85 rose to 3.5 per cent.
Among non-foodgrain crops, the production of oil seeds remained below
the target in the first three years of Seventh Plan. In the case of cotton, the
output exceeded the target during the first three years. During the current

year (1988-89) production is likely to touch a record level of 90.95 lakh

bales.
The production of jute and mesta in the first two years exceeded the target
while the third year registered a fall. The production of sugarcane reached
a record to 196.72 million in 1987-88.
So far as, food crops are concerned, the production of rice was lowered
from 59.39 million tones in 1985-86 to 53.66 million tones in 1986-87 and
further to 48.76 million tones in 1987-88. In 1988-89, production has been
estimated to 67.95 million tones.
Agricultural Inputs:
During 1985-86 and 1986-87, total potential irrigation was achieved of 4.41
million hectare against its target of 4.65 million hectares. However,
investment on minor irrigation development was made of the order of Rs.
647 crore in 1985-86 and Rs. 730 crore in 1986-87.
At the terminal year of the plan, 70 million hectares of land was to be
covered under HYV but achievement fell short of the target by 5.7 per cent
in 1985-86. 7.4 per cent in 1986-87 and about 17.9 per cent in 1987-88.
The consumption of fertilizer is expected to touch a level of 12.3 million
tones by the end of 1989-90. However, in 1988-89, the figure of
consumption is around 11.3 million tones.
Industrial Performance:
The Seventh Plan has laid down considerable emphasis on accelerating
the pace of growth by liberalization of industrial licensing policy and other
regulations, provision of incentives for certain key areas like electronics etc.
The pace of growth is almost maintained in 1987-88 despite the drought

conditions, resilience to supply shocks from agriculture and thinning

interdependence between agriculture and industry.
In 1987-88 industrial production had grown at 7.5 per cent while the
manufacturing sector recorded a growth of 8.2 per cent. However, the
sectoral break up of index of industrial production indicated growth rate of
3.6 per cent, 8.2 per cent and 7.7 per cent respectively for mining,
manufacturing and electricity in 1987-88. During April to December 1988,
manufacturing sector as a whole grew at 9.9 per cent.
Balance of Payment:
The trade deficit, which averaged 3.4 per cent of GDP during sixth plan
period, increased to 3.7 per cent of GDP in 1985-86 but declined in 198687 to 3.2 per cent due to both better export performance and acceleration
in growth rates of imports.
Net earnings on invisible account fell down from an average of 2.1 per cent
of GDP during sixth plan to 1.4 per cent of GDP in 1985-86 and further to
1.2 per cent of GDP in 1986- 87. As a result, current account deficit is
estimated to have averaged over two per cent of GDP, as against the
targeted average of 1.6 per cent for the plan period.
In 1987-88, export of Rs. 15741 crore showed a substantial increase of
26.4 per cent as against a small increase of 14.3 per cent recorded in
1986- 87. Similarly, imports too rose at a higher rate of 10.9 per cent in
1987- 88 compared to an increase of only 2.8 per cent in 1986-87.
In the first three years of seventh plan, imports increased by an annual
compound growth rate of 9.3 per cent as compared to an annual compound
increase of 16.1 per cent in the corresponding period of sixth plan. The

trade deficit declined from Rs. 7748 crore in 1986-87 to Rs. 6658 crore in
1987-88.
However, in SDR terms, total foreign exchange reserves stood at SDR
4486 million ending March 1988, showing a fall of SDR 627 million during
1987-88 as compared to a decline of SDR 615 million in 1986-87.
Price Trend:
Monsoon failures generate strong inflationary pressures because of the
consequent supply squeeze in agriculture and its effect on the rest of the
economy. The annual inflation rate in terms of the wholesale price index
(WPI) had gone up to 10.6 per cent during 1987-88. Upto January 1989,
wholesale price index had come down to 5.4 per cent.
The consumer price index has also registered a lower increase of 8.6 per
cent during April-December, 1988 as against 9.6 per cent in 1986-87. The
behaviour of prices during October-November 1988 was erratic.
Employment and Poverty Alleviation Programme:
At the beginning of the Seventh Plan, it was estimated that 222 million
persons in rural and 50.5 million in urban areas lay below the poverty line.
In terms of percentage, the poverty ratio was 39.9 per cent in rural areas
and 27.7 per cent in urban areas in 1984- 85. This plan aimed at bringing
.down the poverty rate from an average of 36.9 per cent to 25.8 per cent.

VIII. Eighth Five Year Plan (1992-97):

The eighth five year plan was for the period of April 1992 to March 1997.

Objectives:

Based on the approach, the following objectives were accorded

priority in Eighth Plan period:
(i) Generating adequate employment to achieve near full employment level
by the turn of the century.
(ii) Containing population growth through active peoples cooperation and
an effective scheme of incentives and disincentives.
(iii) Universalization of elementary education and complete eradication of
illiteracy among the people in the age group of 15 to 35 years.
(iv) Provision of sale drinking water and primary health facilities including
immunisation for all villages and entire population and complete elimination
of scavenging.
(v) Growth and diversification of agriculture to achieve self- sufficient in
food and generate surpluses for exports.
(vi) Strengthening the infrastructure (energy, transport, and communication,
irrigation) in order to support the growth processes on a sustainable basis.
(vii) The withdrawal of the state from these industrial activities where its
presence is not essential and encouraging private sector initiative to fill the
vacuum.
(viii) Encouraging all-round productivity and efficiency in the public sector
enterprises compelling them to rely on internally generated resources
rather than on budgetary support.

Achievements of the Plan:

The achievements of eighth five Year plan can be discussed as below:
Growth Rate:

The Eighth Plan had set a target of 5.6 per cent but it revealed from
Economic Survey of 1998-99 that the growth rate, which was only 0.5 per
cent in 1991-92 gradually increased to 5.2 per cent in 1992-93 and then
increased to 6.2 per cent provisional in 1993-94. In 1994-95, the CSO
estimates show that the growth rate of GDP would be around 6.8 per cent.
Again, in 1995-96, the CSO estimate shows that the growth rate of GDP
would be around 6.8 per cent. Again, in 1995-96, the CSO estimate shows
that the growth rate of GDP at factor cost would be around 7.3 per cent.
Moreover, in 1996-97, the same growth rate of GDP was around 7.8 per
cent. Thus the Eighth Plan is likely to end with an average growth rate of
6.8 per cent per annum.
Gross Domestic Savings and Investment:
Gross domestic savings as per cent of GDP at current prices, during the
first four years of the Eighth Plan has increased from 22.1 per cent in 199293, to 24.9 per cent in 1994-95 and then to new peak of 26.1 per cent in
1996-97.
The average gross domestic savings (GDS) as per cent of GDP during the
Eighth Plan is estimated at 24.3 per cent and these surpassed the target of
21.6 per cent. The rise in domestic savings in 1996-97 to a peak level of
26.1 per cent of GDP was primarily due to rise in private savings to 24.2
per cent of GDP.
The gross domestic investment as per cent of GDP at current prices has
also increased from 23.9 per cent in 1992-93 to 25.7 per cent in 1996-97.
The average gross domestic investment as per cent of GDP during the
Eighth Plan reached the level of 25.7 per cent. The average of saving-

investment gap during the first four years of the Eighth Plan (1992-96)
stood at () 1.4 per cent.
The gross domestic capital formation which was 24.0 per cent of GDP in
1992-93 gradually rose to 25.2 per cent in 1996-97. The average gross
domestic capital formation as per cent of GDP during the Eighth Plan
(1992-97) stood at 24.5 per cent of GDP.

Sectoral Growth:
Agriculture:
In the agricultural sector, has achieved 6.1 per cent growth rate in 1992-93
and 94 per cent growth rate in 1996- 97. Total production of food-grains has
increased to 179.5 million tones in 1992-93 showing a growth rate of 6.6
per cent and then it increased to 199.4 million tones in 1996-97 showing a
growth rate of 10.5 per cent.
Thus the agricultural sector performed better with an estimated growth rate
of 10.5 per cent in 1996-97 as against a negative growth rate of 2.7 per
cent in 1995-96. During the Eighth Plan (1992-97), the average growth rate
attained by the agricultural sector is estimated at.3.9 per cent.
Mining:
In respect of Mining and Quarrying sector of the country, the Eighth Plan
set the target of attaining annual average growth rate of 8 per cent but this
sector could attain the growth rate of 1.1 per cent and 1.7 per cent only in
1992-93 and 1993-94 respectively. Again in 1994- 95, 1995-96 and 199697, this has attained the growth rate of 9.2 per cent, 7.4 per cent and 1.2
per cent respectively.
During the Eighth Plan (1992-97), the average growth rate attained by the
mining and quarrying sector was estimated at 3.4 per cent.

Industry:
As against the targeted growth rate of 7.3 per cent in the manufacturing
sector during the Eighth Plan, this sector could attain only 4.2 per cent and
8.4 per cent growth rate in the 1992-93 and 1993-94 respectively.
Again the growth rate of manufacturing sector gradually increased to 10.6
per cent in 1994-95, 15.0 per cent in 1995-96 and then declined to 7.7 per
cent (P) in 1996-97. The average growth rate attained by the manufacturing
sector during the Eighth Plan (1992-97) is estimated at 9.2 per cent.
During the Eighth Plan, the industrial sector of the country has responded
well to the economic reforms process. Accordingly, the growth rates of
industrial sector which was only 4.2 per cent in 1992-93 gradually rose to
6.6 per cent in 1993-94, 9.3 per cent in 1994-95, 12.2 per cent in 1995- 96
and 6.0 per cent in 1996-97.
The average growth rate attained by the industrial sector during the Eighth
Plan (1992-97) was estimated at 8.0 per cent.
Electricity, Gas and Water Supply:
In respect of electricity, gas and water supply sector, the average
performance of the sector during the Eighth Plan (1992-97) was 7.3 per
cent as against targeted rate of 7.8 per cent. But taking the energy sector
alone, the growth rate of generations of electricity was only 5 per cent in
1992-93 and then rose to 7.4 per cent in 1994- 95 and 8.2 per cent in 199596 as against the targeted growth rate of 9 per cent during the Eighth Plan
period. This shortfall in respect of generation of electricity has been acting
as a hurdle in the path of growth of industrial sector.
Transport and Communication:

The growth of the Transport sector during the first two years of the Eighth
Plan was 5.4 per cent in 1992-93 and then declined to 4.4 per cent in 199394 as against the targeted annual average growth rate of 6.1 per cent.
The thrust areas identified for the Eighth Plan period include replacement
and renewal of over aged assets, augmentation of terminal and rolling
stock capacities, gauge conversion and electrification. Indian Railways
completed gauge conversion of 1.351 kms. in 1992-93, 1,619 kms. in 199394, 1000 kms. in 1995- 96 and 1300 kms. in 1996-97.
Again the communication sector has achieved a satisfactory progress, i.e.
10.3 per cent growth rate during 1992-93 and only 4.4 per cent growth rate
in 1993-94 as against the targeted annual growth rate of 6.1 per cent
during the Eighth Plans.
In 1995-96, new telephone connections grew by 29.3 per cent. The
department of Telecommunication has released more than 7 million
connections during the first four years of the Eighth Plan since 1991-92.
Thus the Eighth Plan target of providing 7.5 million new telephone
connections was exceeded by 2.5 million connections.
Services Sector:
In respect of services sector, the rate of growth attained which was 5.4 per
cent in 1992-93, gradually increased to 7.7 per cent in 1994-95 and then to
8.0 per cent in 1996-97 (P). During the Eighth Plan (1992-97), the average
growth rate attained by the services sector is estimated at 7.9 per cent as
compared to that of 7.4 per cent during the Seventh Plan.
Sectoral Share in GDP:
During the Eighth Plan the sectoral share in GDP between agriculture,
industry and services sector has undergone of considerable change from

30.19 per cent in agriculture, 29.08 per cent in industry and 40.73 per cent
in services in 1992-93 to 26.10 per cent in agriculture, 31.0 per cent in
industry and 42.70 per cent in services sector in 1996- 97. The Eighth
Plans projection of sectoral share for 1996-97 was 24.60 per cent in
agriculture, 33.20 per cent in industry and 42.20 per cent in services.
Employment Generations:
The Eighth Plan set ambitious targets of attaining growth rate of 2.6 per
cent in employment generation along with the annual average growth rate
of 5.6 per cent in GDP. Accordingly, it was estimated that on an average
about 8 to 9 million additional employment opportunities would be
generated every year during the Eighth Plan.
As per one estimate of the Planning Commission, it is found that about 6.4
million additional employment opportunities would have been created in
1992-93 and 5.6 million during 1993-94 where the rate of growth of
employment generation was 2.6 per cent in 1992-93 and 1.8 per cent in
1993-94.
Again the total annual employment growth in the economy is estimated to
have increased to about 7.2 million in 1994-95. Thus although the Eighth
Plan envisaged 8 to 9 million new jobs per year but during the first three
years of the plan 19.6 million new jobs were created.
Rural Development:
During the Eighth Plan the achievements of the rural development
programmes were not so impressive. About the achievement of IRDP
during the Eighth Plan period, total amount f fund utilised was to the extent
of Rs. 4,866.7 crore and the total amount of investment made (both subsidy
and interest) was to the tune of Rs. 11,523 crore.

Total number of families benefitted during the Plan was 108.08 lakh. Daring
the Eighth Plan, in case of DWCRA another sub-scheme of IRDP, a total of
1, 41,397 groups were formed with a membership of 22,66,817. Again in
respect of JRY, total number of man-days of employment generated during
the Eighth Plan was 4,037.4 million as against the target of 4,040.8 million.
Price Behaviours:
During the Eighth Plan the behaviour of prices was not satisfactory. In
1992-93, the wholesale price index of the country rose by 7 per cent. In
1993-94, although the Government wanted to control the growth of price
level by 5 per cent but ultimately wholesale price index in this year finally
rose by 11 per cent and thus crossed the double digit level.
In 1994-95, the inflation rate moved to double digit figure of 11.52 per cent
during the week ended February 11 although it reached the level of 10.04
per cent during the week ending March 1995.
Thereafter, the country experienced a continuous, though gradual, decline
in inflation rate based on the movement of wholesale price from 10.4 per
cent from the first week end of April 1995 to 8.11 per cent by the end of July
1995, and then to 4.40 per cent during the week ending February 1996 and
then slightly rose to 4.63 per cent for the week ending March 2, 1996.
Then after reversing the trend, the annual rate of inflation continued its
downward climb setting at 4.20 per cent during the week ending April 6,
1996.

IX. Ninth Five Year Plan (1997-2002):

The Ninth Plan has been launched in the 50th year of the independence of
our country. This is an opportune moment to take stock of the success of

our planning process. According to the Approach Paper, Ninth Plan will
cover the period from 1st April 1997 to 31st March 2002.
The principle task of the Ninth Plan will be to usher in a new era of peopleoriented planning, in which not only the Governments at the Centre and the
States, but the people at large, particularly the poor, can fully participate.
A participatory planning process is an essential pre-condition for ensuring
equity as well as accelerating the rate of growth of the economy. Total
investment is proposed to be Rs. 21,90,000 crore of it, public sector
investment will be Rs. 8,75,000 crore and private sector investment will be
Rs. 13,15,000 crore. The objective of the plan is to achieve a growth rate of
7 percent per annum.

Objectives of Ninth Five Years Plan:

The major objectives of Ninth Five Years Plan stated are as under:
(i) Priority to agriculture and rural development with a view to generating
adequate productivity employment and eradication of poverty;
(ii) Accelerating the growth rate of the economy with stable prices;
(iii) Ensuring food and nutritional security for all, particularly the vulnerable
sections of society;
(iv) Providing the basic minimum services of safe drinking water, primary
health care facilities, universal primary education, shelter, and connectivity
to all in a time bound manner;
(v) Containing the growth rate of population;
(vi) Ensuring environmental sustainability of the development process
through social mobilisation and participation of people at all levels;

(vii) Empowerment of women and socially disadvantaged groups such as

Scheduled Castes, Scheduled Tribes and other Backward Classes and
Minorities as agents of socio-economic change and development ;
(viii) Promoting and developing peoples participatory institutions like
Panchayati Raj Institutions, co-operatives and self-help groups.
(ix) Strengthening efforts to build self-reliance.

Achievements of the Ninth Plan:

The Ninth Plan has already completed its four year duration, thus it is quite
necessary to review the achievements of the plan. Let us now examine the
achievements of the Ninth Plan.
(i) Growth Rate:
Regarding annual growth rate of GDP, although the approach paper of the
Ninth Plan initially set the target of attaining 7.0 per cent annual growth rate
of GDP but considering the slowdown of the economy, the draft Ninth Plan
has reduced the overall growth targets in GDP from 7.0 per cent to 6.5 per
cent.
But according to the Economic Survey 2001-2002, the growth rate of GDP
which has only 4.8 per cent in 1997-98 gradually increased to 6.5 per cent
in 1998-99 and then decelerated marginally to 6.2 per cent in 1999-2000
and then to 4.0 per cent in 2000-01 and then to 5.4 per cent in 2001-02.
Therefore, the annual average growth rate during the Ninth Five Year Plan
(1997-2002) is now estimated at 5.4 per cent which is lower than the plan
target of 6.5 per cent.
(ii) Gross Domestic savings and Investment:

The Ninth Plan draft had set the target of gross domestic savings rate at
26.1 per cent of GDP but the same rate at current prices, during the first
three years of the Plan has reached the level of 23.1 per cent in 1997-98,
21.7 per cent in 1998-99 and 23.2 per cent in 1999-2000 and 23.4 per cent
in 2000-01.
The gross domestic investment as per cent of GDP at current prices has
reached the level of 25.0 per cent in 1997-98, 22.7 per cent in 1998- 99
and 24.3 per cent in 1999-2000 and 24.0 per cent in 2000-01 as against
the annual average target of 28.2 per cent.
(iii) Sectoral Growth:
Although the draft Ninth Plan had set a target to attain annual average
growth rate of 3.9 per cent in Agriculture and allied sector but during the
first three years of the Ninth Plan it has attained 2.7 per cent growth rate.
The same sector attained the growth rate of () 2.7 per cent in 1997-98,
7.6 per cent in 1998-99, () 0.9 per cent in 1999-2000, () 6.6 per cent in
2000-01 and finally 6.8 per cent in 2001-02.
The index of agricultural production (1981- 82 = 100) increased from 165.3
in 1997-98 to 177.9 in 1998-99, 176.2 in 1999- 2000, 164.6 in 2000-01 and
finally to 175.9 in 2001-02.
Total production of food-grains has also increased substantially from 192.3
million tones in 1997-98, 203.6 million tones in 1998-99, 209.8 million tones
in 1999-2000 and then declined to 195.9 million tones in 2000-01 and then
again increased to 209.2 million tones in 2001-02. Thus the agriculture and
allied sector has shown a mixed performance during the period of the Ninth
Plan.
Mining:

In respect of mining and quarrying the Ninth Plan has set a target of
attaining growth rate of 7.2 per cent but during the first three years of the
plan, this sector could attain an average growth rate of 2.9 per cent. The
yearly growth rate of this sector was 6.9 per cent in 1997-98 and then the
same growth rate declined to 0.9 per cent in 1998-99, 1.0 per cent in 19992000 and 3.7 per cent in 2000-2001 and 1.1 per cent in 2001-02.
Industry:
The growth rate of 8.2 per cent was fixed in the manufacturing sector
during the Ninth Plan. This sector could attain on an average 4.9 per cent
growth rate during the first three years of the plan. Again, in respect of
Electricity, Gas and water supply, as against the targeted growth rate of 9.3
per cent, this sector could attain the growth rate of 7.7 per cent during the
first three years of the plan.
But taking the industry sector as a whole, this growth rate attained in this
sector was 6.7 per cent in 1997-98 and 4.1 per cent in 1998-99 but then the
same growth rate increased to 6.7 per cent in 1999- 2000 and 5.0 per cent
in 2000-2001 and 2.3 per cent in 2001-02.
Transport and Communication:
The Ninth Plan has fixed the target of 3.9 per cent for rail transport, 4.4 per
cent in other transport and 9.5 per cent in communication sector, but during
the first three years of the plan these sectors could attain an average
growth rate of 3.1 per cent, 5.6 per cent and 14.1 per cent respectively.
Trade:
As against the targeted growth rate of 6.7 per cent in the trade sector
during the Ninth Plan this sector could attain on an average 6.7 per cent
growth rate of during the first three years of the plan.

Service Sector:
The growth rate of 9.9 per cent in the financial services sector was targeted
in the Ninth Plan. The sector could attain on an average 11.4 per cent
growth rate during the first three years of the plan. Again, in respect of
other services, as against the targeted growth rate of 6.6 per cent, the
actual realisation of the target during the first three years of the plan was
8.8 per cent.
But taking the services sector as a whole, the growth rate attained in this
sector was 9.8 per cent in 1997-98, 8.2 per cent in 1998-99, 9.6 per cent in
1999-2000 and 6.5 per cent in 2000-2001.
Price behaviours:
During the first four years of the Ninth Plan, the price behaviour of the
country reflects a moderate behaviour in its price level. Accordingly, the
average rate of inflation (WPI) which was 4.4 per cent in 1997-98, gradually
rose to 5.9 per cent in 1998-99 and then declined to 3.3 per cent in 19992000 and again rose to 7.1 per cent in 2000-2001 and finally to 4.4 per cent
in 2001-02.

Planning Commission (India)

From Wikipedia, the free encyclopedia

Planning Commission

Agency overview

Formed

15 March 1950

Dissolved

2014

Headquarters

Yojana Bhavan, New Delhi

Website

planningcommission.gov.in
Footnotes

Planning Commission has been replaced by new

institution NITI Aayog.[1]
The Planning Commission (Hindi: , Yojana yog) was an institution in
the Government of India, which formulated India's Five-Year Plans, among other functions.
In his first Independence Day speech in 2014, Prime Minister Narendra Modi announced his
intention to dissolve the Planning Commission. It has since been replaced by a new institution
named NITI Aayog.

Contents
[hide]

1History

2Organisation

3Functions

4Social media

5See also

6References

7External links

History[edit]
See also: Five-year plans of India

Rudimentary economic planning, deriving from the sovereign authority of the state, was first
initiated in India in 1938 by Congress President and Indian National Army supreme leader Netaji
Subhash Chandra Bose, who had been persuaded by Meghnad Saha to set up a National
Planning Committee.[2] M. Visvesvaraya had been elected head of the Planning
Committee. Meghnad Saha approached the great engineer and requested him to step down. He
argued that planning needed a reciprocity between science and politics. M.
Visvesvaraya generously agreed and Jawaharlal Nehru was made head of the National Planning
Committee.The so-called "British Raj" also formally established a planning board that functioned
from 1944 to 1946. Industrialists and economists independently formulated at least three
development plans in 2012. Some scholars have argued that the introduction of planning as an
instrument was intended to transcend the ideological divisions between Mahatma
Gandhi and Nehru.[3] Other scholars have argued that the Planning Commission, as a central
agency in the context of plural democracy in India, needs to carry out more functions than
rudimentary economic planning.[4]
After India achieved Independence, a formal model of planning was adopted, and accordingly
the Planning Commission, reporting directly to the Prime Minister of India, was established on 15
March 1950, with Prime Minister Jawaharlal Nehru as the Chairman. Authority for creation of the
Planning Commission was not derived from the Constitution of India or statute; it is an arm of the
Central Government of India.
The first Five-Year Plan was launched in 1951, focusing mainly on development of the
agricultural sector. Two subsequent Five-Year Plans were formulated before 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 199091 and 199192 were treated as Annual Plans. The Eighth Plan was
finally launched in 1992 after the initiation of structural adjustment policies.
For the first eight Plans the emphasis was on a growing public sector with massive investments
in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on
the public sector has become less pronounced and the current thinking on planning in the
country, in general, is that it should increasingly be of an indicative nature.
In 2014, Narendra Modi government decided to wind down the Planning Commission. It was
replaced by the newly formed NITI Aayog.

Organisation[edit]
The composition of the Commission underwent considerable changes since its initiation. With the
Prime Minister as the ex officio Chairman, the committee had a nominated Deputy Chairman,
with the rank of a full Cabinet Minister. Cabinet Ministers with certain important portfolios acted
as ex officio members of the Commission, while the full-time members were experts in various
fields like economics, industry, science and general administration.

Ex officio members of the Commission included the Finance Minister, Agriculture Minister, Home
Minister, Health Minister, Chemicals and Fertilisers Minister, Information Technology Minister,
Law Minister, Human Resource Development Minister and Minister of State for Planning. [5]
The Commission worked through its various divisions, of which there were two kinds:

General Planning Divisions

Programme Administration Divisions

The majority of the experts in the Commission were economists, making the Commission the
biggest employer of the Indian Economic Service.

Functions[edit]
The Indian Planning Commission's functions as outlined by the Government's 1950 resolution
are following:
1. To make an assessment of the material, capital and human resources of the country,
including technical personnel, and investigate the possibilities of augmenting those are
related resources which are found to be deficient in relation to the nation's requirement.
2. To formulate a plan for the most effective and balanced utilisation of country's resources.
3. To define the stages, on the basis of priority, in which the plan should be carried out and
propose the allocation of resources for the due completion of each stage.
4. To indicate the factors that tend to retard economic development.
5. To determine the conditions which need to be established for the successful execution of
the plan within the incumbent socio-political situation of the country.
6. To determine the nature of the machinery required for securing the successful
implementation of each stage of the plan in all its aspects.
7. To appraise from time to time the progress achieved in the execution of each stage of the
plan and also recommend the adjustments of policy and measures which are deemed
important vis-a-vis a successful implementation of the plan.
8. To make necessary recommendations from time to time regarding those things which are
deemed necessary for facilitating the execution of these functions. Such
recommendations can be related to the prevailing economic conditions, current policies,
measures or development programmes. They can even be given out in response to
some specific problems referred to the commission by the central or the state
governments.

Social media[edit]
In March 2013, Planning Commission launched a massive social media campaign for spreading
Awareness about 12th Five Year Plan. It was followed by series of Google+ Hangouts and a Plan

Hackathon. By September 2013, it had made a considerable presence on Social Media with over
One lakh Twitter followers and a considerable size onFacebook, YouTube and SlideShare.[6]

See also[edit]

Investment commission of India

Five-Year Plans of India

Ministry of Finance, Government of India

Finance Commission of India

NITI Aayog

Niti Ayog: Aims, Objectives and Structure The Government of India has established Niti
Ayog as a Think Tank which has no power to impose policies. By establishing Niti Ayog
the government wants to be an enabler and leaves the impetus to provide a platform
for cooperative and competitive federalism to the newly established body. India was
probably the first non-Communist country which went for central planning. Starting with
the Harrod-Domar Model and later statistics of Mahalanobis model, the planning
commission set out sector- specific output and investment targets. It was strong enough
to have a final say on resource allocation. For the last few decades, funds were simply
tied to not only successful but also failed schemes because vested interests demanded
their continuation. There was an increasingly frustration in the states but they had to
yield to the arrogant fund controlling body. Most underdeveloped states including the
North East had to suffer due to the dogged prescription of one-size-fits-all schemes by
the planning commission. The Niti Ayog seeks to give up the one size fits all
prescriptions for a huge country like India with lots of vertical and horizontal imbalances.
Whether it would be able to carve out its unique place in todays time, is yet to be seen.
http://www.gktoday.in/blog/niti-ayog-aims-objectives-and-structure/
Aims and Objectives of Niti Ayog NITI Aayog is essentially an advisory body that seeks
to provide critical directional and strategic inputs across spectrum of key elements of
policy to the centre as well as states. It also seeks to put an end to the slow and tardy
implementation of the policy by fostering inter-ministry, inter-state and centre-state
coordination. Strong states make a strong nation, is the core idea; and the Ayog will
foster cooperative federalism by evolving a shared vision of national development
priorities. It has been envisaged to follow the bottom-top development approach
whereby, it would develop mechanisms to formulate credible plans to the village level
and aggregate these progressively at higher levels of government. It would also pay
attention to the weaker sections of the society that may not have benefitted from
economic progress. It would create a knowledge, innovation and entrepreneurial support
system via a community of national and international experts, practitioners and partners.
It would serve as a platform for resolution of inter-sectoral and inter-departmental issues
in order to accelerate the implementation of the development agenda. It will also monitor

and evaluate the implementation of programmes, and focus on technology upgradation

and capacity building. Composition of NITI Ayog Chairperson -Prime Minister Governing
Council Its members are Chief Ministers and Administrators of the Union Territories
Regional Councils -These would be created as per need and its members would be chief
ministers and administrators of UTs of respective regions. Vice-Chairperson The Vicechairperson of the Niti Ayog will be appointed by Prime Minister. The first ViceChairperson of Niti Ayog is Arvind Panagariya. Further, the Niti Ayog has full time
members (number unspecified), part time members (maximum 2 , these would be
scholars from universities and research institutions), Ex-officio members (maximum 4,
these are ministers from Union Council of Ministers), Special Invitees (appointed by PM
for fixed tenure. Finally, there is a Chief Executive Officer (CEO) of the Niti Ayog, who is
appointed by Prime Minister and has a rank similar to Secretary to the Government of
India. Current CEO was named on January 10 (Sindhushree Khullar ). The secretariat
will be established if deemed necessary. Last Updated: June 16, 2015
http://www.gktoday.in/blog/niti-ayog-aims-objectives-and-structure/

NITI Aayog = more a think tank than a finance

distributing agency.
NITI Aayog will provide Governments at the central and
state levels with relevant strategic and technical advice
across the spectrum of key elements of the policy.
With NITI Aayog, there will be multi-directional flow of
policy (from Center to States, from States to Center,
between ministries etc.)
Better inter-ministry coordination.
The NITI Aayog will develop mechanisms to formulate
credible plans to the village level and aggregate these
progressively at higher levels of government.
The NITI Aayog will create a knowledge, innovation
and entrepreneurial support system through a
collaborative community of national and international
experts.
The National institution for Transforming India will act as a
catalyst for the development by a holistic approach.

 NITI Aayog is based on the 7 pillars of effective

governance (1) Pro-People (2) Pro-Activity (3)
Participation (4) Empowering (5) Inclusion of all (6)
Equality (7) Transparency.
In NITI Aayog, the state governments has an equal role in
nations development process and NITI Aayog promises
the principle of co-operative federalism.
NITI Aayog is planned as a think tank institution which
stands not only as a hub for knowledge but also for good
governance.
Its a platform for monitoring and implementation of all
government policies by bringing together various
ministries at the center and state level.
Priorities include upliftment of the poor, marginalized and
downtrodden.
Empower vulnerable and marginalized sections, redressing
identity-based inequalities of all kinds gender, region,
religion, caste or class.

NITI Aayog: Objectives and Opportunities

NITI Aayog will aim to accomplish the following objectives and
opportunities:

 An administration paradigm in which the Government is

an enabler rather than a provider of first and last
resort.
Progress from food security to focus on a mix of
agricultural production, as well as actual returns that
farmers get from their produce.
Ensure that India is an active player in the debates and
deliberations on the global commons.
Ensure that the economically vibrant middle-class remains
engaged, and its potential is fully realized.
Leverage Indias pool of entrepreneurial, scientific and
intellectual human capital.
Incorporate the significant geo-economic and geo-political
strength of the Non-Resident Indian Community.
Use urbanization as an opportunity to create a wholesome
and secure habitat through the use of modern technology.
Use technology to reduce opacity and potential for
misadventures in governance.

NITI Aayog: Aims

The NITI Aayog aims to enable India to better face complex
challenges, through the following:
Leveraging of Indias demographic dividend, and
realization of the potential of youth, men and women,
through education, skill development, elimination of
gender bias, and employment
Elimination of poverty, and the chance for every Indian to
live a life of dignity and self-respect
Redressal of inequalities based on gender bias, caste and
economic disparities

 Integrate villages institutionally into the development

process
Policy support to more than 50 million small businesses,
which are a major source of e
mployment creation
Safeguarding of our environmental and ecological assets

Structure and Composition of NITI Aayog

Chairperson: Prime Minister of India

Governing Council: Comprising the Chief Ministers of all

States and Lt. Governors of Union Territories.
Regional Councils: Will be formed to address specific
issues and contingencies impacting more than one state
or region.
Strategy and Planning in the NITI Aayog will be anchored from
State-level. Regional Councils will be convened by the Prime
Minister for identified priority domains, put under the joint
leadership of related sub-groups of States (grouped around

commonalities which could be geographic, economic, social or

otherwise) and Central Ministries.

Regional Councils
Have specified tenures, with the mandate to evolve a
strategy and oversee implementation.
Be jointly headed by one of the groups Chief Ministers (on
a rotational basis or otherwise) and a corresponding
Central Minister.
Include the sectoral Central Ministers and Secretaries
concerned, as well as State Ministers and Secretaries. It
will be linked to corresponding domain experts and
academic institutions.
Have a dedicated support cell in the NITI Aayog
Secretariat.
States would thus be empowered to drive the national
agenda. As a consequence, deliberation would be more
grass-roots informed, and recommendations would have
more ownership, given their joint formulation.
Special Invitees: experts, specialists and practitioners with
relevant domain knowledge as special invitees nominated
by the Prime Minister.

Full-time Organisational Framework:

Will comprise of, in addition to the Prime Minister as the
Chairperson:
1. Vice-Chairperson: to be appointed by the Prime Minister.
2. Members: full-time: specialists with international
exposure.
3. Part-time Members: maximum of 2, from leading
universities, research organizations and other relevant

institutions in an ex-officio capacity. Part-time members

will be on a rotational basis.
4. Ex-Officio Members: maximum of 4 members of the Union
Council of Ministers to be nominated by the Prime Minister.
5. Chief Executive Officer: to be appointed by the Prime
Minister for a fixed tenure, in the rank of Secretary to the
Government of India.
6. Secretariat: as deemed necessary.

NITI Aayog specialized Wings

Research Wing that will develop in-house sectoral
expertise as a dedicated think tank of top domain experts,
specialists and scholars.
Consultancy Wing that will provide a marketplace of
whetted panels of expertise and funding for Central and
State Governments to tap into; matching their
requirements with solution providers, public and private,
national and international. By playing matchmaker instead
of providing the entire service itself, NITI Aayog will be
able to focus its resources on priority matters, providing
guidance and an overall quality check to the rest.
Team India Wing comprising representatives from every
State and Ministry, will serve as a permanent platform for
national collaboration.

Difference between NITI Aayog and Planning

Commission
Planning Commission

Planning Commission
Had deputy chairperson,

NITI AAYOG

NITI Aayog New posts of CEO

of secretary rank, and Vice-

Planning Commission

NITI AAYOG

Chairperson. Will also have

five full-time members and
two part-time members. Four
cabinet ministers will serve as
ex-officio members. CEO is
appointed directly by Prime
Minister.

a member secretary,
and full-time members.
Secretaries or member
secretaries appointed by
the usual process.

Planning commission
goes for top-down
planning for government
with public sector
resources.

The planning
commission was a
central government
institution and no
representation of state
government. There was
no structural mechanism
for interaction with
states.

NITI aayog formulate national

development strategy in a
market economy integrated
with the globalized world.

NITI aayog provides a

partnership with state
governments to promote cooperative federalism. It
provides a platform for
structured and regular
interaction with states.

The role of Finance

Commission was greatly
reduced with the
formation of Planning
Commission. Allocation
of funds were decided by
the Planning
Commission.

NITI aayog dont any role in

fund allocation.

Finance ministry to decide the

share of taxes to states, fund
allocation to CSS and Union
assistance to the state plan.

Planning CommissionThe commission

reported to National

Niti Aayog Governing Council

has State Chief Ministers and

Planning Commission

NITI AAYOG

Development Council
that had State Chief
Ministers and Lieutenant
governors.

Lieutenant Governors.

Planning Commission
was Established in 1950,
March 15th

January 1st -2015 Was the

Date When NITI AAYog was
Formed

Chairman of Planning
Commission Was Prime
minister

Same prime Minister as A

Chairman

Niti Aayog: Criticism

Like planning commission, its also a non-constitutional
body which is not responsible to parliament.
Dismantled planning commission without consulting the
states.
UTs are represented by Lieutenant Governors, not by chief
ministers. This is against the principles of federalism.
Fund allocation to welfare schemes may get affected. For
example, there is a 20 % reduction in gender budgeting.

26
INTERESTING FOR YOU
by