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An Idea on Five Year Plans

 An Idea on Five Year Plans

Five-year plan in India was introduced in 1951 to address the urgent problems faced by independent India

India got independence in 1947, and it formally adopted its constitution in January 1950. However, as a country that gained independence after years of British Raj, India was suffering from several economic and social problems. There were several problems like food scarcity, low levels of economic development, poverty, etc. Under such circumstances, strict and urgent plans needed to be made. The Planning Commission of India was set up on 15th March 1950, which was the main body responsible for crafting the five-year plans in India. 

Objectives of Five-year Plans in India

The objectives of the five-year plans are mentioned as follows:

Economic Growth: As the British rule had broken the backbone of the Indian economy, the primary objective of the five-year plans was to bring the country’s economic growth on track.

Economic inequality: At the time of the independence, there was also a huge income disparity. A very few sections of the population were wealthy, and most people lived in poverty. Financial resources were concentrated in the hands of a few people, which is a very undesirable scenario for any country. To ensure that money was distributed as equally as possible, the Indian government introduced five-year plans.

Generating Employment: India has always had one of the largest populations of young workers in the world. However, the job market at the time of independence was not huge enough to absorb everyone, due to which several deserving candidates remained unemployed. This also led to problems like an increased crime rate as people resorted to illegal ways to feed themselves and their families. Hence, five-year plans also aimed to generate employment in the country through economic growth.

Self-reliance: India wanted to be a self-reliant country to reduce its dependence on other countries. Under British rule, India had become an importer of almost every essential thing. Hence, self-reliance was one of the objectives of the five-year plans.

Five-year Plans in India

First Five-year Plan (1951-1956)

It was launched to improve agriculture in India. A budget of Rs 2,069 crore was passed for this. For the plan to be successful, the central government recognised the need for the active participation of states. 

The plan achieved some desired success as several factors came to its aid. The monsoon was good, which resulted in good crops. Due to this, India was able to boost its crop exports, which led to an increase in the foreign exchange reserves. The per capita income also increased by a whopping 8%. Besides, five IITs were set up during the first five-year plan, which was a massive step for educational and technological advancement.

Second Five-year Plan (1956-1961)

It was launched to improve the industrial sector of India. After the success of the first five-year plan, it was felt that the public sector needed an improvement for the social welfare of all. 

However, the second five-year plan of India did not meet its goals. It was because India did not have enough foreign exchange reserves to implement the projects properly. Also, it was a period of massive population growth, leading to more government expenses on social welfare. The second five-year plan was also called the Nehru-Mahalanobis model.  

Third Five-year Plan (1961-1966)

This plan was also known as “Gadgil Yojana”. The plan aimed at making India’s economy independent and growing. But it could not meet its target. During this phase, India fought two wars: One with Pakistan in 1962 and the other with China in 1965. Besides, a drought in the year 1965 added to the existing problems. During this time, controlling inflation was one of the prime responsibilities.

However, it was the same period when the Panchayat elections started in India, states were given more responsibilities, and electricity boards were set up.

Fourth Five-year Plan (1969-1974)

Before the fourth five-year plan, there were plan holidays between 1966 and 1969 after the failure of the third five-year plan. Hence, the fourth five-year plan was introduced in 1969. During the fourth five-year plan, fourteen major banks were nationalised. 

During this phase, the actual growth rate was 3.3%, much lower than the projected growth rate of 5.6%. However, agricultural advancements were made due to the Green Revolution.

Fifth Five-year Plan (1974-1978)

The main focus of this plan was the alleviation of poverty. Under this plan, the Minimum Needs Programme was launched to provide necessities to people. Highways were constructed to improve the country’s infrastructure. However, the plan did not continue for five years as it was halted in 1978 by the newly-elected Desai government.

Sixth Five-year Plan (1980-1985)

The sixth five-year plan is considered the period of the commencement of economic liberalisation in the country. During this phase, strict price controls were removed. It was a successful five-year plan. The actual growth rate stood at 5.7%. India also introduced family planning measures during this plan.

Seventh Five-year Plan (1985-1990)

India achieved a growth rate of 6% during the seventh five-year plan, making it another successful of all five-year plans in India. The focus of this plan was put on being self-reliant.

Eighth Five-year Plan (1992-1997)

This is the phase during which India adopted the policy of liberalisation, privatisation, and globalisation. The economy was made more stable after introducing the economic policy of 1991. During the eighth five-year plan, a growth rate of 6.8% was achieved, and industries were expanded and modernised. This plan put the focus on the energy sector as well.

Ninth Five-year Plan (1997-2002)

The focus of the ninth five-year plan was to improve the quality of life and complete alleviation of poverty. This phase witnessed rapid growth in the service sector. Between 1997 and 2002, the GDP of India grew at the rate of 5.4%.

Tenth Five-year Plan (2002-2007)

The tenth five-year plan continued the progress attained from the previous plans. During this plan, poverty declined by 5%, and GDP grew by 7.7%. Besides, gender inequality got reduced, and literacy rates increased. 

Eleventh Five-year Plan (2007-2012)

The eleventh five-year plan included an additional objective of providing safe and clean drinking water to all. Besides, the plan stressed improving education levels and reducing fertility rates. This was also the phase when environmental sustainability was also introduced.

Twelfth Five-year Plan (2012-2017)

It was the last of all five-year plans of India, which focused on environmental sustainability, providing electricity, eliminating gender inequality, generating employment, improving banking services, and improving the manufacturing sector. 

Conclusion

After independence, India was faced with several economic challenges. India was suffering from poverty, and a significant section of its population lived below the poverty line. People had a low saving capacity, and the per capita income was also low. Generating employment and controlling inflation were mammoth tasks. Hence, to sustain India’s economy, a detailed plan was needed that could be implemented for the benefit of all. Consequently, several five-year plans were introduced in India to put the country’s economy in a positive direction. Each five-year plan had its objective, but the collective objective was economic growth with social justice.