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8/9/2019 Business Env[1]. 3new
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ECONOMIC PLANNING
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RATIONALE FOR PLANNING
Limitations of market mechanism
Need for social justice
R
esource mobilisation & allocation in the contextof overall development programme
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PLANNING PR
OCESS
Planning body
Survey of resources & collection of necessary
data Planning objectives
Priorities
Development strategy
Balancing in the plan
Resource mobilisation
Administrative efficiency
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OBJECTIVES OF ECONOMIC
PLANNING
Economic growth
Distributive justice
Self reliance
Creation of employment opportunities
Elimination of poverty
Modernisation
Stability (Prices, forex, fiscal & BOPposition)
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IMPORTANT FEATURES OF INDIAN
PLANS
Indicative economic planning
Comprehensive plans
Physical planning
Unreliable data
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FORMULATION
OF A PLAN
I STAGE: examining state of economy, appraisal of pasttrends & rate of growth
II STAGE: indicating targets of production to be achieved,constituting groups for each sector
III STAGE: on the basis of preliminary studiesundertaken by the groups, commission presents mainfeatures of plan in form of a draft plan which is discussed
in detail by Cabinet & is placed before NationalDevelopment Council
With modifications as suggested by NDC, the document ispresented for final approval.
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NATIONAL DEVELPOMENT COUNCIL
(NDC)
Framed under planning commission
Presided by Prime Minister
Composed of Union Cabinet ministers, Chiefministers of state, Union territories &members of Planning commission
Secretary of planning commission acts assecretary of NDC
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INDIAS FYPs: BASIC APPROACH
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STRATEGY OF PLANNING IN EARLIER
PHASE (1951-80)
Developing a sound base for initiating processof long term growth
High priority to industrialisation
Emphasis on development of capital goodsindustries
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NEW DEVELOPMENT STRATEGY
Also known as export led growth strategy.
Assumes that trade is an engine of growth
i.e. performance on export front willdetermine overall growth performance ofeconomy
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FIVE YEAR PLANS I (1951-56) II (1956-61) III (1961-66) Plan Hold (1966-69)
IV (1969-74) V(1974-79) VI (1980- 85) VII (1985-90) Annual plans (1990-92) VIII (1992-97)
IX (1997-02) X (2002- 07) XI (2007-12)
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TENTH PLAN (2002- 07): TARGETS
Reduction of poverty to 20% by 2007 & 10% by2012
Gainful employment to addition of labour force
Universal access to primary education by 2007
Reduction in decadal rate of population growth
Increase in literacy to 72% by 2007 & 80% by 2012
Reduction of IMR to 20 per 1000 live births by 2007
& to 10 by 2012 All villages to have access to potable drinking water
by 2012
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Disinvestment of PSUs
Reforms in taxes, labour laws
Adoption of private partnership in infrastructure Power sector reforms
Controlling union & state budge deficits
Encouraging FDI flows
Making the economy competitive with that of rest
of world
TENTH PLAN (2002- 07):
STRATEGIES
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SUCCESS & ACHIEVEMENT OF
PLANNING
Agrarian reforms & green revolution
Increase in industrial production
Growth rate Development of infrastructure
Welfare orientation
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YEAR
TOTALAVAILABILITY OFFOODGRAINS
(million tonnes)
1950-51 50.8
1960-61 82.0
1970-71 108.4
1980-81 129.6
1990-91 176.4
2000-01 205.0
SOURCE: ECONOMIC SURVEY 2003-04
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YEAR
IIP1950-51 7.9
1960-61 15.6
1970-71 28.1
1980-81 43.1
1990-91 91.6
1996-97 139.5
1997-98 145.2
1998-99 154.9
1999-2000 162.7
BASE YEAR: 1980-81
SOURCE: ECONOMIC SURVEY 2002-03
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CRITICAL EVALUATION Inconsistencies in plan objectives
Absence of financial strategy
Flaws in industrial strategy
Neglect of employment strategy
Faulty Implementation
Insufficient & unreliable data
Lack of political will
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GROWTH PERFORMANCE IN PLANS
PLAN TARGET ACTUALI (1951-56) 2.1 3.7
II (1956-61) 4.5 4.1
III (1961-66) 5.6 2.7
PH (1966- 69) 3.9
IV (1969-74) 5.7 3.4
V (1974-79) 5.5 5.0
VI (1980-85) 5.2 5.5
VII (1985-90) 5.0 5.8
AP (1990- 92) 2.9VIII (1992-97) 5.6 6.78
IX (1997-2002) 6.5 5.4
X (2002-07) 8 7.7
SOURCE:PLANNINGCOMMISSION
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STATISTICAL INDICATORS OF ECONOMIC
GOALS
ECONOMIC GOAL STATISTICAL INDICATORS
High level of aggregate o/p & Y GNP, GDP
Rapid growth of Y Avg annual rates of growth of GNP, GDP
Greater equality in Y dist Ginni coefficient
More productive employment Dist of Labor force by industry& occupational classification & Y
Lower international dependence Foreign trade & internationalpayment
Price stability Price indices
Greater regional balance Gross regional product percapita