The Indian economy was built with the help of five year plans from 1947 to 2017. NITI Aayog and the Planning Commission (1951-2014) created, implemented, and monitored the Five-Year Plans (2015-2017). The commission’s ex-officio chairman is the prime minister, while the commission’s nominated deputy chairman is a cabinet minister. The commission’s last deputy chairman was Montek Singh Ahluwalia.
The 1st five year plan was for 1951-1956
The Government had a plan to increase GDP growth by 3.6% but they could only manage 2.1%.
The 2nd plan was for 1956 to 1961.
The plan was to increase national income by 25% with the help of heavy industrialization. However, it could only increase by 20%. Moreover, per capita income grew by 8% only during this period.
The 3rd five year plan was for 1961-1966.
It was thought that the Indian economy had reached a “take-off stage” when it was conceived. Its goal was to make India a “self-sufficient” and “self-generating” economy. Agriculture was given high priority to support exports and industry, based on the experience of the first two plans (agricultural production was considered as a limiting element in India’s economic development).
With the short-lived Sino-Indian War of 1962, India shifted its focus to the country’s security. Agriculture drew attention once more during the years 1965 to 1966, thanks to the Green Revolution.
In many ways, this plan was a failure. Only in transportation, communication, and social services did the plan’s goal come to fruition. Otherwise, agricultural output dropped from 82 metric tonnes to 72 metric tonnes. Food and consumer goods prices rose significantly, while industrial output fell short of forecasts.
The failure of the Third Plan, which resulted in the depreciation of the rupee (to stimulate exports) and an inflationary slump, caused the Fourth FYP to be postponed. Instead, three Annual Plans were introduced. A current agricultural crisis and a severe food deficit prompted a focus on agriculture during the Annual Plans. During the implementation of these programmes, a completely new agricultural approach was developed. It entails widespread distribution of high-yielding seed varieties, considerable fertiliser use, irrigation potential exploitation, and soil conservation.
The 4th five year plan was for 1969 to 1974.
The plan’s first two years saw record production. Due to weak monsoon conditions, the previous three years failed to meet expectations. The Government had set a target of achieving 5.6% GDP growth whereas it could only achieve 3.3%.
The 5th five year plan was for 1974 to 1979.
When the fifth five-year plan was drafted, the global economy was in disarray. The Indian economy suffered as a result of this. As a result of the sharp rise in energy and food prices, inflation became unavoidable. As a result, the food and energy sectors were given more focus in the fifth five-year plan.
It proposed to achieve two key goals: “poverty eradication” (Garibi Hatao) and “self-sufficiency.” Promotion of a high rate of growth improved income distribution, and considerable increases in domestic savings rates were seen as crucial instruments.
The Government had set a target of 4.4% growth. India grew at a growth rate of 4.7% during this period. When the Janta Party came to power in 1978, the FYP was consigned to the background, and the Plan was cancelled.
The 6th five year plan was for 1980 to 1985.
The Janata Government Plan was innovative because it broke away from the Nehruvian model of Five Year Plans. Many things changed in India as a result of the sixth five-year plan. On the one side, it attempted to strengthen India’s tourism business, while on the other, it aimed to promote the information technology sector.
The 6th Five-Year Plan began in 1980 and lasted for another five years, from 1980 to 1985. It aimed to Increased national revenue, technological modernization, ensuring continual reductions in poverty and unemployment through schemes for transferring skills (TRYSEM) and seats (IRDP) and providing slack season work (NREP), population control, and so on.
In general, the sixth Plan was a success since most of the objectives were met, even though many sections of the nation experienced severe famine during the previous year (1984-85) and agricultural output was lower than the previous year’s record output. The target growth rate was 5.2% while the actual growth rate was 5.7%.
The 7th five year plan was for 1985 to 1989.
By boosting agricultural and industrial production, lowering inflation, and maintaining a balance in the exchange of products, services, and money, the Sixth Five Year Plan had already laid the path for economic progress. Employment was expected to grow at a pace of 4% per year, with the labour force expected to grow by 39 million by the end of the fifth year. With the decade of the 1980s struggling out of the Hindu Rate of Growth,the strategy was a huge success, with the economy growing at 6% instead of the targeted 5%.
The 8th five year plan was 1992 to 1997.
Rapid economic growth (highest annual growth rate so far – 6.8%), significant growth in agriculture and allied sectors, and manufacturing sector, growth in exports and imports, and improvement in trade and current account deficit were some of the main economic outcomes of the eighth plan period. Even though the public sector’s portion of total investment had dropped to around 34%, a high growth rate was attained. The target growth rate was 5.6% while actual growth was 6.8%.
The 9th five year plan was for 1997 to 2002.
Agriculture grew at a 2.1% annual pace instead of the targeted 4.2%. The country’s industrial output grew at a rate of 4.5 percent, exceeding the objective of 3 percent. The service sector grew at a pace of 7.8% over the past year. The target growth rate was 6.5% while the actual growth rate was 5.4%.
The 10th five year plan was for 2002 to 2007.
$5.8 billion in spending for the tenth five year plan of 43,825 crore (Indian rupees). Out of the overall plan expenditure, 57.9 percent of it went to the central government and 42.1 percent to the states and union territories. The target growth was 8% while the actual growth was 7.6%.
The 11th five year plan was for 2007 to 2012.
After UPA returned to power on the promise of supporting Aam Aadmi, the Eleventh Plan was intended “Towards Faster & More Inclusive Growth” (common man). By the end of the Tenth Plan, India had become one of the world’s fastest-growing economies. Here are some of the objectives of the plan:
The Eleventh Plan got off to a good start, with a growth of 9.3% in the first year, but with the global financial crisis, growth slowed to 6.7 per cent in 2008-09.
The 12th five year plan was for 2012 to 2017.
Economic planning began with a total of 4 million kilometres of roadway. Indian roads now cover 3 million kilometres, making it one of the world’s most extensive. There has been a massive expansion in other types of transportation, including shipping and civil aviation. At the start of planning, the domestic savings rate was roughly 10% of GDP. By 1980-81, it had risen to around 19% of GDP. March 2007 had a 34.8 percent increase in this rate.
Economic and social growth strategies were centralised in the Five-Year Plans (FYPs). The first Five-Year Plan was executed in the late 1920s by Joseph Stalin, then president of the Soviet Union. Since the country had both public and private sectors, India pursued a socialist route as well, however the planning here wasn’t as complete as in other countries. In India, planning was exclusively concerned with the governmental sector, not with the private one. 1951 marked the beginning of the first Five-Year Plan of the Soviet Union. In order to achieve equal growth, government spending should be planned rather than left to the whims of the market.