Five-Year Plans – objectives, strategies, outcomes

First Plan (1951–56)

• It was based on Harrod–Domar Model.
• Influx of refugees, severe food shortage & mounting inflation confronted the country at the onset of the first five-year Plan.
• The Plan focussed on agriculture, price stability, power and transport.
• Target Growth: 2.1% | Actual Growth: 3.6%
• It was a successful plan primarily because of good harvests in the last two years of the plan. Objectives of rehabilitation of refugees, food self-sufficiency & control of prices were more or less achieved.

Second Plan (1956–61)

• Simple aggregative Harrod Domar Growth Model was again used for overall projections and the strategy of resource allocation for broad sectors as agriculture & industry was based on two & four sector model prepared by Prof. P. C. Mahalanobis. (Plan is also called Mahalanobis Plan).
• Second plan was conceived in an atmosphere of economic stability. It was felt agriculture could be accorded lower priority.
• The Plan focussed on rapid industrialisation – heavy & basic industries. Advocated huge imports through foreign loans.
• The Industrial Policy 1956 was based on establishment of a socialistic pattern of society as the goal of economic policy.
• Acute shortage of forex led to pruning of development targets, price rise was also seen (about 30%) vis a vis decline in the earlier Plan & the 2nd FYP was only moderately successful.
• Target Growth: 4.5% | Actual Growth: 4.3%

Third Plan (1961–66)

• At its conception, it was felt that Indian economy has entered a ‘take-off stage’. Therefore, its aim was to make India a ‘self-reliant’ and ‘self-generating’ economy.
• Based on the experience of first two plans (agricultural production was seen as limiting factor in India’s economic development) agriculture was given top priority to support the expansion of industries.
• The Plan was thorough failure in reaching the targets due to unforeseen events – Chinese aggression (1962), Indo-Pak war (1965), severe drought 1965–66. Due to conflicts the approach during the later phase was shifted from development to defence & development.
• Target Growth: 5.6% | Actual Growth: 2.8%

Three Annual Plans (1966–69)

• Failure of Third Plan that of the devaluation of rupee (to boost exports) along with inflationary recession led to postponement of Fourth FYP. Three Annual Plans were introduced instead.
• Prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans.
• During these plans a whole new agricultural strategy was implemented. It involving wide-spread distribution of high-yielding varieties of seeds, extensive use of fertilizers, exploitation of irrigation potential and soil conservation.
• During the Annual Plans, the economy absorbed the shocks generated during the Third Plan.
• It paved the path for the planned growth ahead.
• Nicknamed: Plan Holidays.

Fourth Plan (1969–74)

• Allies during Indo-Pak war resulted in twin objectives of ‘growth with stability’ and ‘progressive achievement of self-reliance’ for the Fourth Plan.
• Main emphasis was on growth rate of agriculture to enable other sectors to move forward. First two years of the plan saw record production. But the last three years did not record so due to poor monsoon.
• Implementation of Family Planning Programmes were amongst major targets of the plan.
• Influx of Bangladeshi refugees before and after 1971 Indo-Pak war was an important issue along with crisis situation deteriorating top crisis proportions and the plan is considered as big failure.
• Target Growth: 5.7% | Actual Growth: 3.3%

Fifth Plan (1974–79)

• The Final Draft of fifth plan was prepared and launched by D. P. Dhar in the backdrop of economic crisis arising out of run-away inflation fuelled by hike in oil prices and failure of the Govt. to takeover the wholesale trade in foodgrains.
• It proposed to achieve two main objectives: ‘removal of poverty’ (Garibi Hatao) and ‘attainment of self-reliance’.
• Promotion of high rate of growth, better distribution of income and significant growth in the domestic rate of savings were seen as key instruments.
• Due to high inflation, cost calculations for the Plan proved to be completely wrong and the original public sector outlay had to be revised upwards. After promulgation of emergency in 1975, the emphasis shifted to the implementation of Prime Minister’s 20 Point Programme. FYP was relegated to the background and when Janata Party came to power in 1978, the Plan was terminated.
• Target Growth: 4.4% | Actual Growth: 4.8%

Rolling Plan (1978–80)

• There were 2 Sixth Plans. Janata Govt. put forward a Plan for 1978–1983 emphasizing on employment, put in operation by Nehru Model which the Govt. criticised for concentration of power, smothering of private sector and perpetuating poverty.
• However, the government lasted for only 2 years. Congress Govt. returned to power in 1980 and launched a different plan aimed at fighting problem of poverty by creating conditions of an expanding economy.

Sixth Plan (1980–85)

• The Plan focussed on increase in national income, modernization of technology, ensuring continuous decrease in poverty & unemployment through schemes like IRDP, and promoting slack season employment (NREP, RLEGP).
• Broadly, the sixth plan could be termed as a success as economic growth exceeded the targeted plan growth.
• In the last year (1984–85) many parts of the country faced severe famine conditions and agricultural output was less than the targeted output of previous year.
• Target Growth: 5.2% | Actual Growth: 5.7%

Seventh Plan (1985–90)

• The Plan aimed at accelerating food grain production, increasing employment opportunities & raising productivity with focus on ‘food, work & productivity’.
• The Plan was very successful as the economy recorded 6% growth against the targeted 5% with the decade of 80’s struggling out of the ‘Hindu Rate of Growth’.
• Target Growth: 5.0% | Actual Growth: 6.0%

Eighth Plan (1992–97)

• The Eighth Plan was postponed by two years because of political uncertainty at the Centre.
• Worsening Balance of Payment position, rising debt burden, widening budget deficits, recession in industry and inflation were the key issues during the launch of the plan.
• The plan undertook drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6% through introduction of fiscal & economic reforms including liberalisation under the Prime Ministership of P. V. Narasimha Rao.
• Some of the main economic outcomes during eighth plan period were rapid economic growth (highest annual growth rate so far – 6.8%), high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit. High growth rate was achieved even though the share of public sector in total investment had declined considerably to about 34%.
• Target Growth: 5.6% | Actual Growth: 6.8%

Ninth Plan (1997–2002)

• The Plan prepared under United Front Government focussed on ‘Growth with Social Justice & Equality’.
• Ninth Plan aimed to depend predominantly on the private sector – Indian as well as foreign (FDI) & State was envisaged to increasingly play the role of facilitator & increasingly involve itself with social sector viz literacy, education, health etc and infrastructure where private sector participation was likely to be limited.
• It assigned priority to agriculture & rural development with a view to generate adequate productive employment and eradicate poverty.
• Target Growth: 6.5% | Actual Growth: 5.4%

Tenth Plan (2002–07)

• Recognising that economic growth cant be the only objective of national plan, Tenth Plan had set ‘monitorable targets’ for key indicators (11) of development besides 8% growth target.
• Targets included reduction in gender gaps in literacy and wage rate, reduction in infant & maternal mortality rates, improvement in literacy, access to potable drinking water cleaning of major pollutant rivers, etc.
• Governance was considered as factor of development & agriculture was declared as prime moving force of the economy.
• State’s role in planning was to be increased with greater involvement of Panchayati Raj Institutions. State wise break up of targets was done & growth and social development sought to achieve balanced development of all states.
• Target Growth: 8% | Actual Growth: 7.6%

Eleventh Plan (2007–12)

• Eleventh Plan was aimed ‘Towards Faster & More Inclusive Growth’ after UPA rode back to power on the plank of helping Aam Aadmi (common man).
• India had emerged as one of the fastest growing economy at the end of the Tenth Plan. The savings and investment rates had increased, industrial sector had responded well to face competition in the global economy and foreign investors were keen to invest in India. But the growth was not perceived as sufficiently inclusive by many groups, specially SCs, STs & minorities as borne out by data on several dimensions like poverty, malnutrition, mortality, current daily employment etc.
• Target Growth: 9% | Actual Growth: 8%