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8/8/2019 Economic Planning in India (2)
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Group No 5
Rachit Shukla
Farhan Khan
Vivek Agarwal
John Pullack
Nikhil Gupta
Rajan Samrat
Economic Planning In India(With special reference to the five year plans)
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Flow of the Presentation
What is Economic Planning
Why Economic Planning
Who does it
Five Year Plans in India
Achievements of Planning in India
Some Failures in Plans
Conclusions
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What is Economic Planning
Economic
Planning
Resources
Priorities
Time
Planning is defined asconceiving, initiating,regulating and
controlling economicactivity by the stateaccording to setpriorities with a view
to achieving well-defined objectiveswithin a given time.
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Why Economic Planning
Efficient utilization of resources
Market imperfections and price distortions
Maximisation of National Income Full Employment
Equitable distribution of income
Price Stability
Larger savings and investment
Social Justice
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Who Does It
PlanningCommission
NationalDevelopment
Council
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Planning Commission
Setup on March 15, 1950
Assessment of material, capital and human resources of thecountry.
Formulation of plans for the most effective and balancedutilization of countrys resources.
To determine the various stages of planning and to proposethe allocation of resources on the priority basis.
To act as an advisory body to the Union Government.
To evaluate from time to time the progress achieved inevery stage of the plan and also to suggest remedialmeasures.
To advise the Centre and the State Governments from timeto time on special matters referred to the Commission.
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National Development Council
It was set up on August 6, 1952. The PM is the ex officio chairmanof NDC
All the plans made by the Planning Commission have to beapproved by National Development Council first
To prescribe guidelines for the formulation of the National Plan aswell as for the assessment of resources for the Plan.
To consider the National Plan as formulated by the PlanningCommission and endorse its development strategy.
To consider important questions of social and economic policyaffecting the countrys development
To periodically review the working of the Plan and to recommendsuch measures as are necessary for achieving the aims and targetsset out in the National Plan.
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Five Year Plans in IndiaThe First Five Year Plan (1951-56):
Target of GDP growth - 2.1% per year.
Actual growth of GDP had been 3.6% per year.
Projects related to irrigation-the Mettur Dam, Bhakra Dam, and Hirakud Dam.
Rehabilitation of landless agricultural workers
Emphasis on agriculture and rehabilitation of refugees Improvement of roads, civil aviation, railways, telegraphs, and posts.
The Second Five Year Plan (1956-61):
Economy reached a stage where agriculture can be assigned lower priority
Forward thrust given for the development of heavy and basic industries
Big push so that economy takes off Industrial policy 1956 announced
Rapid industrialization- emphasis on development of heavy and basic industries- iron and
steel, heavy chemicals, heavy engineering and machine building
Plan was moderately successful
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Five Year Plans in IndiaThe Third Five Year Plan (1961-66):
Aimed at the establishment of a self reliant and self generating economy.
High priority was assigned to the agricultural sector and development of heavyindustries.
However, the approach had to be shifted to defense due to conflicts with China(1962) and Pakistan(1965).
The construction of dams continued. Many cement and fertilizer plants were alsobuilt. Punjab began producing an abundance of wheat.
The target growth rate of GDP and achieved was 4.5% and 4.3% respectively.
The Fourth Five Year Plan (1969-74):
Aimed at annual growth rate of 5.5 %
Self reliance and provide a national minimum First 2 yrs were good then it failed
Failure of monsoons, decline in food grain production, decline in industrialproduction, rise in prices and then Indo Pak war in 1972
Able to achieve only 3.4% GNP growth against target of 5.5%
A failed plan
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Five Year Plans in IndiaThe Fifth Five Year Plan (1961-66):
Stress was laid on employment, poverty alleviation, and justice
Sectors such as food, oil, and fertilizers prices sky-rocketed.
Attaining self-reliance in food and energy top priority.
The plan also focused on self-reliance in agricultural production and defenceFood grain production above
118 million tons
The Indian national highway system was introduced accommodate the increasing traffic. Tourism alsoexpanded.
Indian exports crossed 18%, and the large earnings from exports
The Sixth Five Year Plan (1980-1985):
At the onset Rajiv Gandhi, prioritized speedy industrial development, special emphasis on information
technology sector.
From the Fifth Five Year Plan, the nation had self sufficiency in food.
Industrial sector was diversified, science and technology made a significant advance.
Programs on improvement of public health and epidemic control to reduce infant mortality and increase
life expectancy.
Investments in Indian healthcare sector.
Promote education
Broadly the plan a success - achieved average growth rate of 5.5%
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Five Year Plans in IndiaThe Seventh Five Year Plan (1985-1990): The Seventh Plan marked the comeback of the Congress Party to power
Making India an Independent Economy
Social Justice
Removal of oppression of the weak
Using modern technology
Agricultural development Anti-poverty programs
Full supply of food, clothing, and shelter
Increasing productivity of small and large scale farmers
Period between 1989-91
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 Forex reserves, left with reserves of only about US$1 billion. Thus,
under pressure, the country took the risk of reforming the socialist economy
Dr. Manmohan Singh launched India's free market reforms that brought the nearly bankrupt
nation back from the edge
It was the beginning of privatisation and liberalisation in India.
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Five Year Plans in India
The Eight Five Year Plan (1992-1997):
Modernization of industries was a major highlight of the Eighth Plan
Severe economic crisis due to balance of payment crisis
Correction of the burgeoning deficit and foreign debt This plan can be termed as Rao and Manmohan model of Economic development
The major objectives included, containing population growth, poverty reduction,employment generation, strengthening the infrastructure, Institutional building,tourism management, Human Resource development, Involvement of Panchayatraj, Nagarapalikas, N.G.O'S and Decentralisation and people's participation
Fiscal reforms were initiated
Energy was given priority with 26.6% of the outlay An average annual growth rate of 6.7% against the target 5.6% was achieved
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Five Year Plans in India
Ninth Five Year Plan (1997-2002)
Focus was on growth with social justice
Priority to agriculture and rural development
Eradication of poverty
GDP growth of 6.5 % per annum
Achieved only 5.35% GDP growth rate
Tenth plan (2002-2007):
Reduction of poverty ratio by 5 percentage points by 2007;
Providing gainful and high-quality employment at least to the addition to thelabour force
All children in India 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 to16.2%
Increase in Literacy Rates to 75 per cent within the Tenth Plan period (2002 to2007)
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11th Five Year Plan
Prime Minister Manmohan Singh termed as Indias
Educational Plan.
Cleared on 9th November 2007.
Aimed at 9% growth rate.
Highest priority to agriculture, education and health.
Total outlay of the plan ` 36,44,718 crore of which
budgetary support will be ` 14,21,711 crore. Agriculture growth at 4% per year.
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11th Five Year Plan
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11th Five Year Plan
Income & Poverty Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th
Plan in order to double per capita income by 2016-17
Increase agricultural GDP growth rate to 4% per year to ensure a broader spreadof benefits
Create 70 million new work opportunities.
Reduce educated unemployment to below 5%. Raise real wage rate of unskilled workers by 20 percent.
Reduce the headcount ratio of consumption poverty by 10 percentage points.
Education Reduce dropout rates of children from elementary school from 52.2% in 2003-04
to 20% by 2011-12 Develop minimum standards of educational attainment in elementary school,
and by regular testing monitor effectiveness of education to ensure quality
Increase literacy rate for persons of age 7 years or above to 85%
Lower gender gap in literacy to 10 percentage point
Increase the percentage of each cohort going to higher education from thepresent 10% to 15% by the end of the plan
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11th Five Year Plan
Health Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000
live births
Reduce Total Fertility Rate to 2.1
Provide clean drinking water for all by 2009 and ensure that there are no slip-
backs Reduce malnutrition among children of age group 0-3 to half its present level
Reduce anaemia among women and girls by 50% by the end of the plan
Women and Children Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17
Ensure that at least 33 percent of the direct and indirect beneficiaries of allgovernment schemes are women and girl children
Ensure that all children enjoy a safe childhood, without any compulsion towork
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11th Five Year Plan
Infrastructure Ensure electricity connection to all villages and BPL households by 2009 and
round-the-clock power.
Ensure all-weather road connection to all habitation with population 1000 andabove (500 in hilly and tribal areas) by 2009, and ensure coverage of allsignificant habitation by 2015
Connect every village by telephone by November 2007 and providebroadband connectivity to all villages by 2012
Provide homestead sites to all by 2012 and step up the pace of houseconstruction for rural poor to cover all the poor by 2016-17
Environment
Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12.
Treat all urban waste water by 2011-12 to clean river waters.
Increase energy efficiency by 20 percentage points by 2016-17.
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