PLANNING COMMISSION & FIVE YEAR PLANS

FIRST FIVE YEAR PLAN (1951-56)

Prime Minister Jawaharlal Nehru presented the first five-year plan to Parliament on December 8, 1952

Its total budget of 206.8 billion rupees ($23.6 billion in 1950 dollars exchange rate) was divided between seven areas:
Agriculture and Community Development (17.4%) Irrigation and Power (27.2%) Transport and Communications (24%) Industry (8.4%) Social Services (16.64%) Rehabilitation (4.1%) Miscellaneous (2.5%)

MAJOR ACHIEVEMENTS OF FIRST FIVE YEAR PLAN (1951-56)

Monsoons cooperated, and harvests were good during the plan period, boosting exchange reserves Many irrigation projects like Bhakra Nangal, Hirakud & Mettur Dam were set-up

Infant mortality was brought down which lead to rise in population

5 IITs & UGC was set up

There was a proposal to set up 5 steel plants

SECOND FIVE YEAR PLAN (1956-61)

Focused on Industry Plan focused on Mahalnobis Model, which attempted to determine the optimal allocation of investment between productive sectors in order to maximize long-run economic growth The dams that were started in the first 5 Year Plan were finished in this plan and irrigation canals started feeding hundreds of thousands of hectares of newly irrigated land. Hydroelectric power projects were started in the 2nd Five Year Plan. Notable one being Mahatma Gandhi Hydro Electric project at Sharavati and Koyna Dam in Maharashtra.

MAJOR HIGHLIGHTS OF SECOND FIVE YEAR PLAN (1956-61) Five steel mills at Bhilai, Durgapur and Jamshedpur were also started. Coal production was increased. More railway lines were added in the North-East . Atomic Energy Commission was formed in 1957 with Homi J Bhabha as the head of the AEC. Nehru took Nuclear power development under his own wings, and supported Bhabha. Tata Institute of Fundamental Research was started during this plan period. War with China was a rude awakening about the lack of defence readiness. Peace loving Nehru was dealt a blow by Mao Tse Tung and his Hindi Cheeni Bhai-bhai slogan was found to be shallow. Monsoons failed during these years population explosion continued unabated. and

THIRD FIVE YEAR PLAN (1961-66) The planned stress was on agriculture, but due to the Sino-Indian War of 1962 focus shifted towards defence and development. The war exposed the weakness of the Indian Economy. In 1965-66, the Green Revolution was started for the advancement of Indian agriculture. The wars lead to rising prices in India. The priority was thus shifted to price stabilization. India continued on with dam building. Hundreds of small and large dams were built during this five year plan. Many cement and fertilizer plants were also built. Punjab started producing an abundance of wheat.

THIRD FIVE YEAR PLAN (1961-66)

Many primary schools were started in rural areas . In an effort to bringing democracy to the grass roots, Panchayat elections were started The nation was reformulated under linguistic states in the first 5 Year Plan only. Now these states were given more and more development responsibilities. State electricity Boards were formed. State secondary education Boards came into existence. States were made responsible for college level and high school level education. State Road transportation corporations were formed and local road building became state responsibility.

FOURTH FIVE YEAR PLAN (1969-74)

During the early period of the plan, several droughts affected the economy. Indian Currency was devalued due to rising inflation. Then an annual plan was introduced to resolve immediate problems, but still unemployement and poverty were major problems so this remained the focus of the plan . Another problem rose in 1973 in the form of the hike in fuel prices but the focus remained unchanged. Mrs Indira Gandhi was the Prime Minister of India. World situation was not very peaceful during this time with Vietnam War underway in Southeast Asia.

She tried to control the capital market by nationalizing six of Indias major banks.

FOURTH FIVE YEAR PLAN (1969-74)

The situation in East Pakistan (now Bangladesh) was also getting worse. During 1971 more than ten million illegal Bangladeshi immigrants poured into India as refugees running away from the murderous West Pakistani Army General Yahya Khan who was the military dictator of Pakistan then unleashed a rain of terror in East Pakistan with his 93,000 army. The refugee crisis thus highjacked India's fourth five year plan. India sent 300,000 troops surrounding East Pakistan and liberating it in fifteen days. The new nation of Bangladesh was born in December 1971. Pakistan's 93000 troops surrendered to the India army, which were later released to Pakistan after the Simla Agreement of 1972. Funds earmarked for the industrial development had to be used for the war effort. India also tested (underground) a "peaceful atomic weapon in 1974 as a reply to President Nixons crude gun boat diplomacy of bringing the U.S. 7th fleet into the Bay of Bengal as a threat to the Indian army operation in Bangladesh (the East Pakistan).

FIFTH FIVE YEAR PLAN (1974-79)

Stress

was laid on employment, poverty removal, and justice .

The plan also focused on self reliance with respect to agricultural production and defence .
During the fourth and fifth plans, stress was on reducing poverty ; but it was realized that poverty still plagued the nation. Hence, in 1978 the newly elected Morarji Desai government rejected the plan. The Janata government rejected the Nehruvian Model of economy, laying stress on village and cottage industries and natural mobilization of resources, to increase employment.

SIXTH FIVE YEAR PLAN (1980-85)

When Rajiv Gandhi was elected as the prime minister, the young prime minister wanted India to make rapid industrial development. He wanted Information Technology to be used for the benefits of the masses of India. However computer phobia was so prevalent in the labor leaders of communist parties that he had to thread very slowly into this avenue.

Some concessions were given to the industries to experiment with computerization, and was hooked on computers ever since. The idea of a National Highway system was introduced for the first time and many roads were widened to accommodate the increase in road traffic.

The idea of tourism and India as a tourist destination started taking shape. After the devaluation of the rupee it became very cheap for foreigners visiting India and enjoying Indian luxury at a very low cost.

SIXTH FIVE YEAR PLAN (1980-85)

The planners and bureaucrats realized that public funds alone would not be able to achieve the required rate of growth. So they started thinking of bringing the private sector into the planning. Family Planning also had to be looked at seriously. The growth of population had to be curbed. China was achieving spectacular results with its forced sterilization method. But using force to enforce family planning in India won't work. However control of birth rate was made a priority. Educated people adopted to family planning readily. It was the rural population that still continued to have a high birth rate . Control on food prices was eliminated and ration shops were closed. This increased the food prices rapidly, putting pressure on the family budget. Cost of living was going up faster than the increase in productivity during this plan period.

SEVENTH FIVE YEAR PLAN (1985-90)

The first three years of the seventh five year plan saw severe drought conditions, despite which foodgrain production grew 3.2%. Policies were aimed at rapid growth in foodgrain production, higher employment levels etc Several special programmes like Jawahar Rozgar Yojana were introduced Social sectors like welfare, education, health, family planning, employment etc. which were accorded low priority in the earlier plans, got a higher outlay - 21.6% in the seventh plan Industrial growth also accelerated during this plan period to 8.7% p Rural electrification increased significantly and covered 81% of the villages by the end of the seventh plan Actual public sector expenditure in the seventh plan increased by 21.5% against the envisaged outlay

THE INTERIM PERIOD (1989-91)

The 1989-91 years, was a time of political 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 $1 billion (US). Thus, under pressure, the country took the risk of reforming the socialist economy. At that time Dr. Manmohan Singh helped India to a great extent.

It was the beginning of privatization and liberalization in India.

EIGHTH FIVE YEAR PLAN (1992-97)

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.

NINTH FIVE YEAR PLAN (1997-2002)

The target growth rate for the ninth plan was proposed to be 7%. India was able to achieve the target as a sound base for rapid growth had already been laid in the country. The ninth plan makes serious efforts to raise the level of agricultural and rural incomes and target programmes at small, medium and marginal farmers and landless labourers Allocation to power sector shot up to 25.4% of the total outlay Reliance on own resources increased to 54.3%, while domestic capital receipts contribution is slated to fall to 38.8% of total resources. Foreign assistance continues to remain low at 6.8% of total resources.

TENTH FIVE YEAR PLAN (2002-07)

The main objectives of the 10th Five-Year Plan are: Reduction of poverty ratio by 5 percentage points by 2007; Providing gainful and high-quality employment at least to the addition to the labour force; All children in school by 2003; all children to complete 5 years of schooling by 2007; Reduction in gender gaps in literacy and wage rates by at least 50% by 2007;

Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2%;
Increase in Literacy Rates to 75 per cent within the Tenth Plan period (2002-3 to 2006-7); Reduction of Infant mortality rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012; Reduction of Maternal Mortality Ratio (MMR) to 2 per 1000 live births by 2007 and to 1 by 2012;

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