NATIONAL PLANNING

Introduction
It may be recalled that national planning came into prominence in the 1950s and 1960s
beginning with India’s decision to adopt national planning as the center piece of its
development strategy and its sequential adoption by many countries as they emerged from
colonialism. 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. National planning came under attack in the very
late 1970s essentially led by international multi-lateral agencies like World bank and IMF.
We are going to examine the historical development of national planning in India to
identify the issues existed.

Five year plan:

India has followed a path of planned development which has by and served it well. There
has been shifts in the approach and attitude towards growth and development over these
years. There are some issues of economic planning. Indian development strategies have
evolved from one Plan to another in response to the objective conditions of the economy
and to the challenges of moment. Some of these changes have been strikingly bold and
original, others are modest but there has been:

The first five year plan (1951-1956) The First Five-year Plan was launched in 1951 which
mainly focused in development of the primary sector. The First Five-Year Plan was one of
the most important, because it had a great role in the launching of Indian development after
Independence. Thus, it strongly supported agriculture production and also launched the
industrialization of the country. After which they found that the people were not having
sufficient savings. he target growth rate was 2.1% annual gross domestic product growth;
the achieved growth rate was 3.6% the net domestic product went up by 15%. The First
Five-Year Plan was based on the Harrod–Domar model with few modifications.

It is the second five year plan (1956-1961) which set the stage for formal planning in
country. The Second Plan focused on the development of the public sector and "rapid
Industrialization". The principal constraint that time was the availability and allocation of
savings. The model used for this plan was Feldman-Mahalanobis model. This laid
emphasis on establishment of heavy industries through public investment, both as a means
of rapid industrialization and for raising the low savings rate of the economy. Private sector
was only into production of consumer goods and small and cottage industries were wipes
off. It was in this plan that 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.

Third five year plan (1961-1966) as the main focus of the plan was on rapid
industrialization, this leads to increase in the import and hence emerging problem of
balance of payments. A new constraint - foreign exchange. There was two solutions for
this problem: (i) increased emphasis on exports; or (ii) reducing imports through directed
domestic production. Due to bitter experience, the demand for a plan holiday were raised
from various sectors and the planning commission admitted that this plan was a failure.
Accordingly, government declared a plan holiday for next three years and due to this, the
fourth plan started in 1969. Rupee was devalued for the first time.

Fourth five year plan (1969-1974) this period witnessed the worst draught and consequent
famines. Same time because of Indo-Pak war all aid along with food aid was cut off and
this lead to a third constraint – wage-goods constraint. Sufficient food supply was not there
and the farmers were forced to commit suicide because of no money. Then to overcome
this constraint there was green revolution. The target growth rate was 5.6%, but the actual
growth rate was 3.3%.
Fifth five year plan (1974-1979) The Fifth Five-Year Plan laid stress on employment,
poverty alleviation (Garibi Hatao). The plan also focused on self-reliance in agricultural
production and defence. The principal constraint of this time was income inequality.The
concept of “minimum needs” and directed anti-poverty programmes were introduced in the
fifth five year plan to overcome the constraint.

Sixth five year plan (1980-1985) The Sixth Five-Year Plan marked the beginning of
economic liberalisation. The industrialization strategy contributed in raising the savings
rate of the country. In this the focus was to shift their strategy from industrialization to
infrastructure. They looked this as a consgtraint. Economy was developing so they wanted
to build the infrastructure as well. The Sixth Five-Year Plan was a great success to the
Indian economy.

The 7th Five year plan (1985-1990) marked the beginning of the technological era. It was
during this period that the reappraisal of the import substitution strategy and the shift
towards building a technologically developed country began. The change in strategy in that
case was not decided by the technocrats but by the political leadership, especially Rajiv
Gandhi, who was the Prime Minister at that time. However, it was the responsibility of the
technocrats to convert the politically dictated strategy to an operational blueprint.

The 8th Five Year Plan (1992-1997) was overtaken by the foreign exchange crisis of 1991,
which was triggered off the Gulf War, and the economic reforms that came in its wake.
The dramatic events and policy initiatives represented the first efforts at planning for a
market- oriented economy. . 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.

The 9th Five Year Plan (1997-2002) mainly encountered the financial constraint which our
country was facing that time. 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 Five-Year
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.

The 10th Five Year plan (2002-2007) India was facing tremendous barrier to find a proper
vision. This period marked the return of visionary planning to India after a long period of
incrementalism. Its main objective was to attain 8% GDP growth per year. It aimed to
reduce poverty rate by 5 % by 2007.It also aimed at providing gainful and high-quality
employment at least to the addition to the labour force.and reduction in gender gaps in
literacy and wage rates by at least 50% by 2007.

The 11th Five Year plan (2007-2012) had Dr Manmohan Singh as the Prime minister of the
country. It aimed to increase the enrolment in higher education of 18-23 years of age group
by 2011-12. It aimed at the human resource constraint by providing appropriate allocation
of youths. It focused on distant education, convergence of formal, non-formal, distant
and IT education institutions.

The 12th Five Year plan focused mainly on sustainability. The plan of the government has
been decided to achieve a growth rate of 8.2% but the National Development Council
(NDC) on 27 December 2012 approved a growth rate of 8% for the Twelfth Five-Year
Plan.[10] It aimed to create 50 million new work opportunities in the non farm sector and
also to remove gender and social gap in school enrolment. The plan also aimed 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 the 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.

Presented By

Pragati Kumari

Avanti Majumdar

Bishal Roy