2nd_five_year_plan - our pressentationppt

8/7/2019 2nd_five_year_plan - our pressentationppt

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2ND FIVE YEAR PLAN (1956 61)

A BRIEF OVERVIEW

Rahil Alam

Shaishta AfrozeMalika Gupta


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An economic plan may be described as a specific set of

quantitative economic targets to be achieved in a given period

of time.

Just as the goals of a political system are spelled out in aconstitution, so the goals of an economy are spelled out in a

Plan.

However, unlike the constitution the Plan is transitory.


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National Planning Commission (1938)

British govt. set up an officer (1944)

Bombay Plan (15 years)

Peoples Plan (10 years)

Gandhian Plan

Planning Commission


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OBJECTIVES OF PLANNING

The resolution of the Planning Commission, singles out three principles as

special terms of reference in the preparation of a Plan:

that the citizens, men and women, equally, have the right to an adequate meansof livelihood;

that the ownership and control of the material resources of the community are

distributed in a manner that best serves the common good; and

that the operation of the economic system does not result in the concentrationof wealth and means of production to the common detriment.


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Problem of poverty remained.

Investment during this period was not sufficient to absorb new entrants into

labour market.

This added to backlog of unemployment and underemployment.

ACHIEVEMENTS OF FIRST FIVE YEAR PLAN

Increase in national income by 18%. Increase in national income by 18%.

Increase in per capita income by 11%

The rate of investment as a proportion of national income rose by 2.4%.

Important success of plan at agricultural front. (increase in food output by 20%)

FAILURES OF FIRST FIVE YEAR PLAN


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OBJECTIVES OF 2 ND FIVE YEAR PLAN

Shifting emphasis from agriculture to industrial growth and that too heavy

industries.

Rapid industrialization with particular emphasis on development of basic

and key industries (iron and steel)

Reduction of inequalities in income and wealth and more even

distribution of economic power.

To increase countrys productive potential in a way that would make

accelerated development in succeeding plan periods.

It aimed at an annual increase of 5% in national income and a multifold

increase in employment.


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I M P O R T A N T C H A P T E R S

R E L A T E D T O I N F R A S T R U C T U R E D E V E L O P M E N T

Shifting emphasis

from agriculture to

industrial growth

SET UP OF

INDUSTRIES

RURAL

INDUSTRIES

HEAVY

INDUSTRIES

HANDICRAFTS

COIR

INDUSTRIES

SERICULTURE

IRON & STEEL

HEAVEY

CHEMICALS

MACHINARIES

EMPLOYMENT

Annual increase of 5% in national income

TRANSPORTATION

HOUSING

Increase countrys

productive potential

WATER

SUPPLYELECTRICITY

Reduction of inequalities

in income and wealth


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I M P O R T A N T C H A P T E R S

R E L A T E D T O I N F R A S T R U C T U R E D E V E L O P M E N T

DISTRICT DEVELOPMENT ADMINISTRATION

IRRIGATION AND POWER

PROGRAMME OF INDUSTRIAL DEVELOPMENT

VILLAGE AND SMALL INDUSTRIES

TRANSPORT

COMMUNICATIONS AND BROADCASTING

EDUCATION

HOUSING

SOCIAL WELFARE SERVICES


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District Plans

The main constituents of a district plan are:

1. The community development and national extension programme,

2. Social welfare extension projects,

3. Agricultural production programme and allied activities in the field of rural

development such as animal husbandry, soil conservation etc.,

4. Village panchayats,

5. Village and small industries,6. Schemes for utilising effectively resources developed through state projects for

irrigation, electricity, communications, industrial development and expansion of

training facilities,

7. Housing and urban development,

8. The programme of small savings,

9. Aiding construction projects through labour co-operatives and shramdan,

10. Programmes for the welfare of backward classes,

11. Programmes in rural and urban areas relating to social services, especially

expansion of education at primary and secondary levels, health units, health

education, sanitation, malarial control, family planning, etc.

12. Utilising and assisting voluntary organisations engaged in constructive social work,

13. Dissemination of information about programmes of national, state, regional and

local development.


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Village Planning- In national extension and community project areas, as programmeswere carried to the village to be worked in cooperation with the people, the significance ofvillage planning was increasingly realised. In the programme of local development workslocal communities had to propose schemes which they could undertake through their ownlabour with support from the Government

Village Panchayats- The main land management functions are:

regulation of the use of common lands such as waste lands, forests, abadi sites, tanks,etc.;

cultivation of lands set apart for the benefit of the village community, as in consolidation ofholdings;

adaptation of standards of good management and cultivation to local conditions and ttheir enforcement; and

association with the work of maintenance of land records;


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PROGRAMME OF INDUSTRIAL DEVELOPMENT

PRIVATE SECTOR

PUBLIC SECTOR

The overall magnitude of the planned expenditure on the programme of industrialdevelopment apprears to have been determined on the babsis of two objectives

1. To raise the national income by 25% in this period2. To provide enough new opportunities for enployement to absorb all the new addition to

the labour force during this period

Within the framework of the policy set out above, the next phase in the expansion of industrialcapacityhas to be conceived in terms of the following priorities:

1. Increasea production of iron and steel and ofheavy chemicals, including nitrogenousfertilizers, and development of the heavy engineering and machine building industries;

2. Expansion of capacity in respect of other developmental commodities and producer goodssuch as aluminium, cement, chemical pulp, dyestuffs and phosphatic fertilizers;and of

essential drugs;3. Modernisation and re-equipment of important national industries whichhave already come

into existence, such as jute and cotton textiles and sugar;4. Fuller utilisation of existing installed capacity in industries where there are wide gaps

between capacity and production; and5. Expansion of capacity for consumer goods keeping in view the requirements of common

production programmes and the production targets for the decentralized sector of industry.


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VILLAGE AND SMALL INDUSTRIES

The primary object of developing small industries in rural areas is to extend workopportunities, raise incomes and standard of living and to bring about a more balanced and

integrated rural economy.

In making its proposals the Committee kept three principal aims in view, namely,1. To avoid as far as possible, during the period of the second plan, further technological

unemployment such as occurs specially in the traditional village industries;2. To provide for as large a measure of increased employment as possible during the plan

period through different village and small industries; and

3. To provide the basis for the structure of an essentially decentralised society and also forprogressive economic development at a fairly rapid rate


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HOUSING

It is proposed to take up three new programmes, namely, rural housing, slum clearance andsweepers housing and middle income group housing

RURAL HOUSING- A large proportion of the 54 million houses in rural areas need to be rebuiltor substantially improved. Sooner or later, every village should have a plan which provides for

wide streets with

drains, proper spacing ofh

ouses, th

e location of community buildings and aplayground for children.

SLUM CLEARANCE AND SWEEPERS' HOUSING- For preventing the growth of slums thereare two sets of measures to be taken.

Municipal by-laws must be enforced with the utmost strictness. In the enforcement ofmunicipal by-laws the support of enlightened public opinion should be mobilized and potential

slums should receive immediate attention.

Master plans should be approved for every town, beginning with towns which are alreadylarge or have expanded much in recent years or are likely to grow rapidly in the next few years.

For enforcing master plans, local authorities should have the requisite powers to implementzoning schemes, control the use of land and prevent ribbon development. Where necessary,

new auth

orities may be set up. In Delh

i a special development auth

orityh

as been recentlyconstituted.


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A

15%

B

16%

C

13%D

2%E

4%

F

26%

G

24%

A

12%

B

%

C

10%

D

4%

E20%

F

27%

G18%

A->AGRICULTURE, B->IRRIGATION, C->POWER, D->RURAL SMALL SCALE INDS.,

E->INDUATRIES F-TRANSPORT&COMM,G->S.SERVICE

FIRST PLAN SECOND PLAN

COMPARISON:


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Budget

Public outlay 46.7

Agriculture 5.5

Irrigation 4.3

Power 4.5

Village ,small industries 1.9

Organized industries, mining 9.4

Transport & communications 12.6

Other social services 8.6

Budgetary resources of which 25.6Additional taxation 10.5

Internal private savings 14.1

External assistance 10.9

Deficit financing 9.5

Private Investment 31.0

Rs bn


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HOUSING

The period of the first five year plan witnessed the first steps in a national housing programme,included a subsidised industrial housing scheme and a low income group housing scheme -housing schemes for plantation labour and for labour in coal and mica mines.

These programmes are being substantially expanded during the second five year plan,three newprogrammes,

A)Rural Housing,B)Slum clearance and sweepers' housingC)Middle income group housing.

Total provision in the first plan of Rs. 38.5 crores, the second plan has allotted a sum ofRs. 120crores which is distributed as follows:


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HOUSING

Housing schemes for wokers in the coal industry are financed from the Coal Mines Labour Welfare Fund ,Housing schemes for mica and coal mines are the responsibility of the Ministry of Labour, the other schemesbeing administered by the Ministry of Works, Housing and Supply.

For housing programmes to be undertaken during the second five year plan the following targtes have beenadopted

SUBSIDISED INDUSTRIAL HOUSING SCHEME

Under the industrial housing scheme Loans and grants are given by the Central Government to StateGovernments and public authorities, to employers and to co-operatives of industrial workers.

A) For one-room tenements, the maximum cost prescribed is Rs. 4,500 for multi-storeyed tenements in Bombay

and Calcutta and Rs. 2,700 elsewh

ere.

B) For two-roomed tenements the cor-.responding figures are Rs. 5,430 (now raised to Rs. 5,930) in Bombay andCalcutta and at other places Rs. 3,340 for single-storeyed tenements and Rs. 3,490 for double-storeyedtenements.

C) For State" Governments 50 per cent of the cost is given by way of loan and 50 per cent as subsidy; for co-operatives 50 per cent as loan and 25 per cent as subsidy; and for employers 37% per, cent as loan and 25 percent as subsidy.The period of repayment is 15 years in the case of employers and 25 years in other cases.


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HOUSING

LOW INCOME GROUP HOUSING , 1954

Provides for the grant of long-term house building loans at a reasonable rate ofinterest to persons whose income does not exceed Rs. 6,000 per annum.

Loans are given to individuals as well as to co-operatives wh

ose members fulfilthis condition.The assistance is restricted to 80 per cent. of the estimated costofconstruction, including land, and is subject to a maximum of Rs. 8,000.

The scheme also provides for loans to State Governments interest repayable in

three years for acquisition and development of land by local authorities and its

allotment to prospective builders.

A proportion of funds available under the scheme for low income housing might be

used for land development on a planned basis, special attention being given tothose towns where considerable congestion exists and to towns which are likely to

develop more rapidly on account of development programmes to be undertakenduring the second five year plan.


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HOUSING

RURAL HOUSING

A large proportion of the 54 million houses in rural areas need to be rebuilt or substantiallyimproved. Sooner or later, every village should have a plan which provides for wide streets withdrains, proper spacing ofhouses, the location of community buildings and a playground for

children

Larger scheme of rural reconstruction, which includes improvement of agricultural production,cooperative working in as many fields as possible, rural water supply, drainage, sanitation,village roads, welfare programmes for scheduled castes and other backward classes andprogrammes for providing more work and better living conditions for village artisans.

During the second plan, resources have been allocated for these and other activities. As therural community programme succeeds and village. communities assume largerresponsibilities, improvements in village housing conditions are to be expected


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HOUSING

SLUM CLEARANCE AND SWEEPERS' HOUSING

During the past two or three years a fraction of slum dwellers have been moved out of theirhabitations as a result of the subsidised industrial housing scheme.

For preventing the growth of slums there are two sets of measures to be taken-

1. In the first place, municipal by-laws must be enforced with the utmost strictness. In theenforcement of municipal by-laws the support of enlightened public opinion should bemobilised and potential slums should receive immediate attention.

2. Secondly, master plans should be approved for every town, beginning with towns which are

already large or have expanded much in recent years or are likely to grow rapidly in the nextfew years. For enforcing master plans, local authorities should have the requisite powers toimplement zoning schemes, control the use of land and prevent ribbon development. Wherenecessary, new authorities may be set up. In Delhi a special development authority has beenrecently constituted.


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HOUSING

State Governments and local bodies should provide slum dwellers with developedand demarcated plots of land vaying from 1000 to 1200 sq. ft.

Standard costs of slum clearance and slum improvement projects have been worked

out for the guidance of State Governments.The rehousing benefits to be providedunder the scheme are intended for those slum families whose income does not

exceed Rs. 250 per mensem in Bombay and Calcatta and Rs, 175 per mensemelsewhere.

OTHER HOUSING SCHEME

In accordance with the provisions of the Plantation Labour Act, 1951, it is obligatoryfor every residing in the plantations. While the larger plantations are able to fulfil

this condition, for the smaller plantations Government assistance by way of loans isneeded. During the second five year plan Rs. 2 crores are to be provided for this

purpose. About 11,000 houses are expected to be built under this scheme.plantation to provide houses of prescribed standards for workers and their families


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HOUSING

A provision of Rs. 3 crores has been made in the second plan for a middle income group housing scheme.Thescheme envisaged collaboration with insurance companies and, according to the terms originally proposed, eachloan was to be jointly approved by Government and an insurance company.

HOUSING PROBLEMS

in rapidly growing towns developed sites are not available to a sufficient extent,

construction in the private sector tends to concentrate on expensive houses intended to fetchhigh rents and theneeds of the lower middle and middle classes are not adequately catered for;

apart from assistance wh

ich

th

e Government now provides, adequate institutional arrangements forh

ousing financedo not exist;

cooperative housing has made comparatively little progress;

there is considerable need for research in building materials, and techniques and for prescribing standards ofconstruction with due regard to the availability of local materials and the economic use of scarce materials; and

with a few exceptions. State Governments are not yet adequately organised for undertaking and assisting extensivehousing programmes.

If urban development and re-development and housing policies are viewed in the context of planned economicdevelopment and rapid industrialisation, three problems claim special study, namely,

(a) methods of securing planned development in urban areas,(b) expansion ofhousing facilities, and(c) development of civic administrations along sound and progressive lines


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I N D U S T R I E S

After independence in 1947, the government took full control over the iron and steel sectorand established a policy of restricting development of new integrated steel plants to the

public sector.

1959 the government formally approved the setting up of privately owned mini plants

From the main producers about 80% of production of the plants under the Steel Authorityof India Limited (SAIL) and about 65% of the production of the private company (TISCO)

were regulated by the JPC(JointPlant Committee)

Hydroelectric power projects and five steel mills at Bhilai, Durgapur, and Rourkela were

established, their combined output of steel was only 0.6 million tons in 1960-61 as againstthe target of 2 million tons.

The Atomic Energy Commission was formed in 1957 with Homi J. Bhabha as the firstchairman.


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ACHIEVEMENTS

1. A large no. ofhydroelectric and thermal power plants were constructed.

2. Industrial sector achieved remarkable progress and three huge cement and fertilizers

industries were set up.3. Social services like health and education improved a lot.

4. It showed welcome reorientation in favors ofheavy industry.

FAILURES

1. Second plan was termed as crisis of ambitions.Th

e plan was not ambitious in relationto needs of the people. It failed in creating job opportunities and unemployment was

still prevailing.

2. Lack of realism in assumptions upon which second plan proposals. (problem of

inflation was grossly underestimated, prospects of agriculture exaggerated)

3. Despite its double development expenditure than first plan it was a failure with

deterioration in living standards , economic inequalities increased and agriculture

remained more or less static.

4. Increase in national income proved to be only 20% as against the target of 25%.

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