Five Year Plans of India

Five-Year Plans (FYPs) are centralized and integrated national economic programs. Joseph Stalin implemented the first Five Year Plan 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. Have a look at India's FYPs
1.         First Plan (1951–1956)
2.         Second Plan (1956–1961)
3.         Third Plan (1961–1966)
4.         Plan Holiday (1966 – 1969)
5.         Fourth Plan (1969–1974)
6.         Fifth Plan (1974–1978)
7.         Rolling Plan (1978–1980)
8.         Sixth Plan (1980–1985)
9.         Seventh Plan (1985–1990)
10.       Annual Plans (1990–1992)
11.       Eighth Plan (1992–1997)
12.       Ninth Plan (1997–2002)
13.       Tenth Plan (2002–2007)
14.       Eleventh Plan (2007–2012)
15.       Twelfth Plan (2012–2017)

First Plan (1951–1956)
The first Indian Prime Minister, Jawaharlal Nehru presented the First Five-Year Plan to the Parliament of India. The First Five-year Plan was launched in 1951 which mainly focused in development of the primary sector.
·        It was based on the Harrod–Domar Model with few modifications.
The total planned budget of Rs.2069 crore (2378 crore later) was allocated to seven broad areas
1.     Irrigation and energy (27.2%)
2.     Agriculture and community development (17.4%)
3.     Transport and communications (24%)
4.     Industry (8.4%)
5.     Social services (16.64%)
6.     Rehabilitation of landless farmers (4.1%),
7.     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 problems—deficiency of capital and low capacity to save.
·        The target growth rate was 2.1% annual GDP growth; the achieved growth rate was 3.6%.
·        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, Mettur Dam 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 (1956–1961)
The Second Plan was particularly in the development of the public sector and "rapid Industrialisation".
The plan followed the Mahalanobis model, an economic development model developed by the Indian statistician Prasanta Chandra Mahalanobis in 1953.
·        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 of India were 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:
1.     power and irrigation,
2.     social services,
3.     communications and transport"

·        The target growth rate was 4.5% and the actual growth rate was 4.27%

Third Plan (1961–1966)
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 1965–1966, 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 built.
·        Punjab began producing an abundance of wheat.
·        Many primary schools were started in rural areas.
·        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%.

Plan Holiday (1966–1969)
Due to miserable failure of the Third Plan the government was forced to declare "plan holidays" (from 1966–67, 1967–68, and 1968–69).
·        Three annual plans were drawn during this intervening period.
·        During 1966–67 there was again the problem of drought. Equal priority was given to agriculture, its allied activities, and industrial sector.
·        The government of India declared "Devaluation 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.

Fourth Plan (1969–1974)
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 target growth rate was 5.6%, but the actual growth rate was 3.3%.
Fifth Plan (1974–1978)
The Fifth Five-Year Plan laid stress on employment, poverty alleviation (Garibi Hatao), 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.
·        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 Minimum Needs Programme (MNP) was introduced in the first year of the Fifth Five Year Plan (1974–78). The objective of the programme is to provide certain basic minimum needs and thereby improve the living standards of the people.
·        The target growth rate was 4.4% and the actual growth rate was 4.8%.

Rolling Plan (1978–1980)
The Janata Party government rejected the Fifth Five-Year Plan and introduced a new Sixth Five-Year Plan (1978–1980). This plan was again rejected by the Indian National Congress government in 1980 and a new Sixth Plan was made.

Sixth Plan (1980–1985)
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.
·        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.
·        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 5.7%.
·        The only Five-Year Plan which was done twice.

Seventh Plan (1985–1990)
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
·        The main areas of the Seventh Five-Year Plan were:
1.     Social justice
2.     Removal of oppression of the weak
3.     Using modern technology
4.     Agricultural development
5.     Anti-poverty programmes
6.     Full supply of food, clothing, and shelter
7.     Increasing productivity of small and large scale farmers
8.     Making India an independent economy.
·        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%.

Annual Plans (1990–1992)
The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre and the years 1990–91 and 1991–92 were treated as Annual Plans.

Eighth Plan (1992–1997)
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. At that time Dr. Manmohan Singh 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 deficit and foreign debt.
·        Meanwhile, India became a member of the World Trade Organization on 1 January 1995.
·        Meanwhile, India became a member of the World Trade Organization on 1 January 1995.
·        The major objectives included,
v Controlling population growth
v Poverty reduction
v Employment generation
v Strengthening the infrastructure
v Institutional building
v Tourism management
v Human resource development
v Involvement of Panchayati rajs, Nagar Palikas, NGOs, decentralisation and people's participation.
v Energy was given priority with 26.6% of the outlay.
·        The target growth rate was 5.6% and the actual growth rate was 6.8%.

Ninth Plan (1997–2002)
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 Ninth Five-Year Plan also saw joint efforts from the public and the private sectors in ensuring economic development of the country.
·        New implementation measures in the form of Special Action Plans (SAPs) were evolved during this Plan to fulfil targets within the stipulated time with adequate resources. The SAPs covered the areas of social infrastructure, agriculture, information technology and Water policy.
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 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
       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.
       The Ninth Five-Year Plan achieved a GDP growth rate of 5.4% against a target of 6.5%

Tenth Plan (2002–2007)
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.

Eleventh Plan (2007–2012)
The main aims of this plan were:
·        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 (2012–2017)
The Twelfth Five-Year Plan was commenced at time of second financial crisis of the global economy. Therefore it emphasizes on bringing the economy back to the rapid growth while ensuring that the growth is both inclusive and sustainable.

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