A REPORT ON

EVALUATION OF INDUSTRIAL GROWTH

DURING PLAN PERIOD

Submitted by

BITIRNA BANERJEE

MBA FINANCIAL MANAGEMENT

FIRST SEMESTER

ROLL NO-28

UNIVERSITY OF CALCUTTA

COLLEGE SQUARE, KOLKATA

ABSTRACT

The economic development of India during planning era is impressive. The performance of

Agriculture sector, Industrial sector and territory sector contributes a lot towards overall development of the

country. The development of infrastructure during planning era is laudable. The entire credit goes to the

planning commission which is unfortunately abolished by the new government at the centre. In this scenario,

an attempt has been made to evaluate and discuss the economic development of India during planning era.

This study concentrates on development of country sector wise like agriculture, industry, retail, energy,

infrastructure and communications etc, finally offer recommendations for effective economic development

of the country.

INTRODUCTION

The progress of industrialization during the last 60 years since 1951 has been a striking feature of

Indian economic development. The process of industrialization, launched as a conscious and deliberate

policy under Industrial Policy Resolution 1956 and vigorously implemented under the Five Year Plans,

involved heavy investments in building up capacity over a wide spectrum of industries. As a result over the

last 60 years, industrial production went up phenomenally making India the 10th most industrial country of

the world. The industrial structure has been widely diversified covering broadly the entire range of

consumer, intermediate and capital goods.

Since 1947, the Indian economy has been premised on the concept of planning. This has been carried

through the Five-Year Plans, developed, executed, and monitored by the Planning Commission (NITI

Aayog after 2014). With the Prime Minister as the ex-officio Chairman, the commission has a nominated

Deputy Chairman, who holds the rank of a Cabinet Minister. Montek Singh Ahluwalia is the last Deputy

Chairman of the Commission (resigned on 26 May 2014). The Eleventh Plan completed its term in March

2012 and the Twelfth Plan is currently underway. Prior to the Fourth Plan, the allocation of state resources

was based on schematic patterns rather than a transparent and objective mechanism, which led to the

adoption of the Gadgil formula in 1969. Revised versions of the formula have been used since then to

determine the allocation of central assistance for state plans.The new government led by Narendra Modi,

elected in 2014, has announced the dissolution of the Planning Commission, and its replacement by a think

tank called the NITI Aayog (an acronym for National Institution for Transforming India).

FIRST FIVE YEAR PLAN (1951–1956)

The first five year plan was predominantly agricultural plan. No doubt, no special efforts were made

to develop industries, but by realizing the role of industrialization efforts were made to lay the foundation of

future industrial development.

(i) Total Outlay:During the plan, 5% of the total plan expenditure was made on industries. Of this, Rs. 74

crore were on large industries in public sector whereas Rs. 43 crore were spent on small industries.

(ii) Achievements of Industrial Sector:Although, the first plan stressed to increase the agricultural

production, even then, the industrial production increased at the rate of 6.68 per cent per annum. The

production of capital goods increased by about 70 per cent while the production of consumer goods was

recorded to be 34 per cent. A number of public sector industrial undertakings were started in this plan

period. The major projects were Hindustan Shipyard, Sindri Fertilizer Factory, Hindustan Machine Tools,

Hindustan Cables, Integral Coach Factory, U.P. Govt. Cement Factory, NEPA Mills and Hindustan

Antibiotics.The progress of production and expansion of capacity could be considered satisfactory in the

case of Sindri Fertilizer Factory, Chittaranjan Locomotive Factory, Indian Telephone Industries, Integral

Coach Factory, Cable Factory and Penicillin Factory. But, on the contrary, progress has been somewhat

behind schedule in the case of some Central and State projects as they took long time to complete and to

begin production than had been anticipated.They were Hindustan Machine Tool Factory, UP Cement

Factory, Nepal Factory and Bihar Superphosphate Factory. A new plant of iron and steel was to be set up by

the Central Government and was expected to turn out 350000 tonnes of pig iron by 1955-56 and yield an

additional 60000 tons of finished steel by the same year. Thus, these targets could not be achieved by the

schedule time of the plan.Total gross investment in fixed capital in the private sector during the plan period

was about Rs. 340 crores. The largest investment was in cotton textile (Rs. 80 crores), petroleum refining

(Rs. 45 crores), iron & steel (Rs. 49 crores) followed by heavy and light engineering industries (Rs. 25

crores), chemical, fertilizer, pharmaceuticals, dyestuffs and plastics (Rs. 18 crores), Paper and Paper board

(Rs. 11 crores), Sugar (Rs. 15 crores), electric power generation (Rs. 32 crores), jute textile (Rs. 15 crores)

electric power generation (Rs. 32 crores), jute textile (Rs. 15 crores), rayon and staple fibre (Rs. 8 crores)

and others (Rs. 27 crores.)

(iii) Development in the Public Sector:The estimated expenditure on projects both of the Central and State

Govt. amounts to Rs. 94 crores and out of it, about Rs. 83 crores were on projects which were directly under

Central Government. The participation of private capital, indigenous and foreign was envisaged at” about

Rs. 20 crores. The major industrial project in the public sector was a new iron and steel plan estimated to

cost Rs. 80 crores in all and Rs. 30 crores were allotted in the present plan period.

(iv) Development in the Private Sector:The total capital investment was estimated at Rs. 233 crores

exclusive of Rs. 150 crores which was required for the replacement and modernisation of plant and

machinery. About 80 per cent of this investment was in respect of capital goods and producer goods

industries. It consisted of mainly iron and steel industry (Rs. 43 crores), petroleum & refineries (Rs. 64

crores), cement (Rs. 15.4 crores), aluminium (Rs. 9 crores) and fertilizer, heavy chemicals and power

alcohal (Rs. 12 crores), Electric power generation involved an expenditure of Rs. 16 crores which had

generated 176000 KW additional electric power during the plan period.

(v) Village and Small Industries:The production of handloom had increased from 742 million yards in

1950-51 to 1354 million yards in 1954-55. Four Regional Small Industries Service Institutes with a large

number of branch units, were set up to provide technical services, advice and assistance. Twelve State

Finance Corporation were also established.

SECOND FIVE YEAR PLAN (1956–1961)

(i) Total outlay:In the second five years plan 24% of the total plan was directed to industrial development.

On large scale industries total expenditure was recorded to be Rs. 938 crore and on small scale industries it

was only Rs. 187 crore.

(ii) Achievement of the Plan:The tempo of industrial production gathered momentum during 1959 with the

utilisation of new capacity, better availability of raw materials and the occurrence of fewer strikes. The

index of industrial production in 1959-60 (1951=100) had advanced to 152.1 from 139.7 in the preceding

year and registered an increase of 8.9 per cent as against 1.7 per cent during 1958. In terms of capacity

installation, coal and lignite programmes nearly touched the targets aimed at.The production of steel ingots

was 3.5 million tonnes as against the target of 6 million tons and of finished steel 2.2 million tonns tons as

against the target of 4.3 million tons. In coal, the production was recorded 54.6 million tons over the target

of 60 million tons. Production of nitrogenous fertilizer also showed a short fall of 110000 tons in terms of

nitrogen, the target being 290000 tons.The organised industries in the private sector like textiles,

automobiles, cement, paper, sugar etc. showed satisfactory progress. Such major industrial projects were—

Hirakud Smeltor of the Indian Aluminium Company, Polythene Plant of Alkali and Chemical Corporation,

Soda Ash plant of Dharangadhra, Tata Locomotive and Engineering Company, Soda Ash etc.Ammonium

Chloride Plant of new Central Jute Mills, Varanasi, Sodium Hydro-sulphite, Plant of J.K. Rayons were

completed. A number of projects with foreign capital participation were approved. They were Aluminium

Project (Kaiser Birla Collaboration), Premier Tyres (Dayton Rubber Co. and National Rubber

Manufacturer), Synthetic Rubber project (Kila Chand Fire Stone Collaboration).Similarly, the discovery of

petroleum reserved in the Sibsagar area in Assam and in the Cambay-Aukleshwar area in Gujrat as a result

of the explorations organised by ONGC was an important event in the plan period. The coal production was

recorded to be 47.03 million tons in 1959 and total expenditure on mineral development during 1956-60 was

about Rs. 97 crores.

(iii) Village and Small Industries:There were 16 small industries services and institutes with four branch

institutes and 53 extension centres. Total production of the handloom cloth in 1959-60 was recorded 1873

million yards. The production of Khadi was placed at about 46 million square yards.The additional

employment provided by traditional khadi was estimated to about 83000 spinners, 3000 weavers and 5000

others engaged in an ciliary jobs like manufacture of charkhas. The Industrial Extension Service comprising

15 small industries service institutes—one in each state and one at Delhi and 39 extension centres were

functioning till the end of March, 1960. Under the State Bank of India’s coordinated Credit Scheme for

small scale industries Rs. 5.11 crores had been advanced up to the end of March 1960. During 1956-57 to

1959-60, about Rs. 10.38 crores were disbursed.

THIRD FIVE YEAR PLAN (1961–1966)

(i) Total Outlay:In the third five year plan, total expenditure on large scale industries was Rs. 1726 crore. In

the private sector, the expenditure was Rs. 1 300 crore, while Rs. 241 crore were spent on the development

of small industries.

(ii) Achievements of the Plan:The increase in industrial output considering 1960 as base year stood at 8.2

per cent in 1961-62; 9.6 per cent in 1962-63; 9.2 per cent in 1963-64 and 8.3 per cent in 1964-65.

Thereafter, there was sharp deterioration in the rate of growth of output. It fell to 4.3 per cent in 1965-

66.The capital goods industries registered the highest annual growth rate of 19.7 per cent. In the case of

consumer goods industries, it was recorded to the extent of 5.0 per cent per annum which was the highest

rate ever achieved during the plan periods. However, the share of consumer goods industries in the

manufacturing sector was 38 per cent ending 1965 against its share of 68 per cent in 1951.

The highest rate of growth of industrial investment was due to:

(i) Encouraging government policy of heavy investments in new industries;

(ii) Development expenditure generated demand for consumer goods;

(iii) Rapid growth of agricultural output i.e. better provision of raw material; and

(iv) Inter-industry linkages lead to make investments in heavy industries.

The Unit Trust of India and Industrial Development Bank were set up in 1964. The Refinance

Corporation was amalgamated with it. A scheme for providing discounting facilities for the purchase of

plant and machinery was instituted. Some measures were taken to streamline and expedite the procedures of

licencing, import of raw material and capital goods, issue of capital and approval of foreign collaboration

agreements.The production of some basic industries like Aluminium, Petroleum products, Automobiles,

Electric transformers, Machine tools, Textile machinery and Power driven pumps, were almost satisfactory,

whereas, electric machinery showed 71 per cent increase in production while 82 per cent in non-electrical

machinery 57 per cent in metal products and 48 per cent in petroleum products.

(iii) Village and Small Industries:The hostilities of 1962 and 1965, the shortage of raw materials and

various other reasons slowed down the progress, which was quite encouraging during the first two years of

the plan. The production of handloom and power loom increased from 2013 million in 1960 to 3056 million

metres in 1965. The total share in production of cloth was 30.4 per cent in 1960 and 40.0 per cent in 1965.

The value of exports of handloom fabrics and products increased from Rs. 5 crores to about Rs. 12.6

crores over the same period. In industrial estate, about 8000 sheds were allotted with employment

opportunities for about 70000 persons. Similarly, production of all varieties of khadi including woolen and

silk increased from 53.76 million sq. metres in 1960-61 to 84.85 million sq. metres in 1965-66. The industry

provided employment of nearly 2 million persons mostly part time including about 1.7 million spinners.

The production of paddy declined from 57.7 thousand tons in 1960- 61 to 42 thousand tons in 1965-

66. This was due to increased competition between rice millers and hullers. The centres for all industries

which were assisted by the Khadi and Village Industries Commission, provided full time employment to

172000 and Part time to 703000 workers during 1965-66 against 118000 and 446000 workers in full time

and part time respectively during 1960-61.

During this period, the production of coir fibre increased from 152000 tons to 162000 tons, coir yarn

from 142000 tons to 143000 tons, coir products from 24200 tons to 24500 tons and coir rope from 14250

tons to 15000 tons. The value of exports of coir yarn and products also increased from Rs. 8.7 crores during

1960-61 to Rs. 11.0 crores during 1965-66. The annual sales of handicrafts through public emporia rose

from Rs. 2.7 crores to Rs. 3.5 crores in the same period.

FOURTH FIVE YEAR PLAN (1969–1974)

(i) Total Outlay:In the plan period, a sum of Rs. 2864 crore were spent on the large industries and minerals.

The outlay on the development of small scale industries was recorded to be Rs. 234 crore.

(ii) Achievements:The growth rate of industrial production declined from 6.8 per cent in 1969-70 to 3.7 per

cent in 1970-71 but increased to 4.5 per cent in 1971-72 and at about 5 per cent during 1972-73. An

investment of approximate Rs. 5200 crores in organised industry and mining Rs. 2800 crores in the public

sector and Rs. 2400 crores in private and cooperative sector was made.The capital goods industries showed

only 5.9 per cent growth rate against its target of 17.1 per cent. Consumer goods industries like sugar, soap

and cotton recorded normal growth. The other industries i.e. machine tools, cotton textile machinery,

nitrogenous fertilizer, agricultural tractors and petroleum products showed a comparatively high growth rate.

(iii) Village and Small Industries:Out of Rs. 290 crores allotted in public sector for the development of

different small industries, Rs. 250 crores were spent. The advances by the State Financial Corporation to

small industries increased from Rs. 7 crores in 1969-70 to Rs. 20 crores in 1971-72. During the period 1969-

72, the National Small Industries Corporation supplied machines on hire-purchase terms valued at Rs. 20.81

crores including Rs. 10.7 crores in 1971-72. The production and export of certain industries has considerably

increased.

The number of units registered on voluntary basis with the Industries Directorates of the States and

Union Territories increased from nearly 2 lacs in 1969 to about 3.18 lacs in 1972 and total employment in

these units was estimated at 41.4 lac persons. A further list of 77 items was added to those reserved for

exclusive development in the small sector bringing total to 124.A total of 183 credit institutions including all

the major commercial and co-operative banks and the State Financial Corporations joined the scheme up to

the end of 1972. The value of purchases from small industries by the Directorate General of Supplies and

Deposals rose from Rs. 30 crores in 1968-69 to Rs. 86 crores in 1971-72. The production of all varieties of

khadi industries increased from about 60 million square metres in 1968-69 to 77.2 million square metres in

1972-73.

FIFTH FIVE YEAR PLAN (1974–1979)

(i) Total Outlay:During the fifth five years plan a sum of Rs. 9581 crore were spent on industrial

development which accounts for 25% of the total plan expenditure.

(ii) Achievements:Impressive and considerable advancement has been made in the field of industry, though

its growth rate has not been uniform. After a steady growth of about 8 per cent during the initial period of 14

years, there was fluctuating trend, even approaching near stagnancy in 1966-68 and clinching to a level of

9.5 per cent in 1976-77 and dipping to 1.4 per cent in 1979-80.There were many reasons for fluctuations as

early period was largely based on import substitution and the development of the capital market. Thereafter,

during the course of changed national and international environment, India could attain hardly an average

growth rate of about 4 per cent per annum (1970-71 to 1979-80). The entire credit goes to public sector as it

took keen initiative for the development of many fields like steel, non-ferrous metals, petroleum, coal

fertilizers and heavy engineering.The total investment in the central public sector in 1979 was amounting to

Rs. 15600 crores of which Rs. 12800 crores approximately were invested in industrial and mining

undertakings. The share of public sector in the net domestic product in organised industry and mining has

moved up from 8 per cent in 1960-61 to 28.9 per cent in 1977-78.

(iii) Village and Small Industries:During the period 1974-80, the estimated value of production registered

a growth rate of 6.8 per cent per annum. The gross value added at factor cost, rose from Rs. 2800 crores in

1973-74 to Rs. 4100 crores in 1979-80 (at prices of 1970-71). The employment has increased in village and

khadi industries from 8.84 lacs in 1973-74 to 11.24 lacs and 18.21 lacs in 1979-80. Small industries’

contribution to export was only Rs. 538 crores in 1973-74 which rose to Rs. 1050 crores in 1979-80. All

traditional industries exported goods amounting to Rs. 1175 crores in 1979-80 when it was hardly of Rs. 302

crores in 1973-74.The number of persons employed were 61.50 lacs in small scale industry during 1979-80

against its number of 52.10 lacs during 1973-74. In short, various measures were taken to accelerate the rate

of industrial growth. Twenty-one industries were delicensed and 29 selected industries were permitted ‘to

utilize their installed capacity without any limitation. These measures made considerable impact on

manufacturing exports.

SIXTH FIVE YEAR PLAN (1980–1985)

(i) Total Outlay:The Plan provided an outlay of Rs. 11848 crores for industrial and mineral projects in the

central sector excluding coal and petroleum and Rs. 1389 crores in state and union territories. Rs 15182

crores were invested in the private, corporate and cooperative sectors in mining and manufacturing, while

actual expenditure in public sector was Rs. 15338 crores against its outlay of Rs. 13232 crores.

(ii) Achievements:The actual growth rate achieved was 5.6 per cent against a target of 7.00 per cent per

annum. The production of cement increased from 17.8 million tons in 1979-80 to 30.1 million tons in 1984-

85. During this period, the production of Vanaspati increased from 626 to 920 thousand tons. The

production of iron ore increased from 39 million tons to 42.2 million tons.The production of crude oil

showed tremendous increase of about 150 per cent. It increased from 11.77 million tons in 1979-80 to 28.99

million tons in 1984-85. The industries with higher weightage i.e. textile with weightage of 17.43 registered

a growth rate of 0.8 per cent and engineering with a weight of 29.85 showed only 4.7 percent rise ending

1984-85. The share of manufacturing sector in the net domestic product had fallen from 17.4 percent from

1979-80 to 1984-85.

(iii) Village and Small Industry:The production has increased from Rs. 33538 crores during 1979-80 to Rs.

65730 crores during 1984-85 and export from Rs. 2280.62 crores to Rs. 4557.56 crores over the same period

at current prices. With regard to employment, it has increased from 233.72 lakh persons to 315 lakh persons.

With the manufacturing sector, this represented about 80 percent of the total industrial employment.

(iv) Handicrafts:This sector plays an important role in the Indian economy by providing employment

opportunities and helping the country to earn foreign exchange. In 1985-86, the export of handicrafts (other

than gems and jewellery) worth Rs. 92.4 crores (Provisionally) have been achieved. The All India Handloom

and Handicrafts Board was reconstituted in October 1984 to advise the Government on matters relating to

development of handlooms and handicraft.The Development Commissioner for handicrafts is responsible

for implementation of various schemes for development of handicrafts in the Central sector. It has five

regional offices at Bombay, Calcutta, Lucknow and New Delhi. The National Handicrafts and Handlooms

Museum has been set up at New Delhi. Design centres at Bangalore, Calcutta, Bombay and New Delhi are

the focal points of development of design for servicing requirements of various exporters and state level

handicrafts development corporations and apex societies.

SEVENTH FIVE YEAR PLAN (1985–1990)

(i) Total Outlay:During the Seventh five years Plan, provision of outlay of Rs. 29655 crores for large

industries and minerals and Rs. 3624 crore for small industries was made.

(ii) Achievements:The significant growth in industrial sector was recorded i.e. 5.6 percent. Among the

major industry groups, were the annual growth rates of textile products, basic metals, alloys and metal

products, electrical machinery and appliances.

The Seventh Plan also witnessed a higher dose of liberalization measures as:

(1) raising the asset limit for exemption to companies from the purview of MRTP Act;

(2) exempting 83 industries under the MRTP Act for entry of dominant industries,

(3) grant of exemption from licensing for industrial units with an investment of up to Rs. 50 crores in

backward areas and Rs. 15 crores in other areas on the basis of negative list and delicensing non-MRTP, non

FERA companies for 31 Industry groups and MRTP/FERA companies in backward area for 72 industry

groups.

(iii) Village and Small Industries:During 1984-85 to 1989-90 the value of output has increased at constant

prices, at a compound rate of 12.06 percent. However, the production of khadi, village industries, handloom

cloth and coir yarn and coir products fell short of their respective target. Export of this sector has increased

at a compound rate of 26.57 per cent (Constant prices).The production of khadi cloth was 107.47 million Sq.

metres in 1989-90 against its target of 180 million sq. metres. The employment in Khadi was of 14.12 lakh

persons in 1989-90 which is less than the tax-get as well as employment of 14.58 lakh persons in 1984-

85.The employment in village industries was estimated at 32.14 lakh persons. The value of output in village

industries was of Rs. 1101 crores at constant prices and Rs. 1705 crores at current prices. In 1989-90, the

production of white fibre’ was stagnant, the production of brown fibre has registered more than 55 percent

increase.The production of white fibre and brown fibre was 1, 24, 900 tonnes and 64,600 tonnes against the

respective level of 1, 24,800 tonnes and 39,600 tonnes in 1984-85. During this period, the export of coir

yarn and other products has increased from 8.36 lakh in 1984-85 to 11 lakh in 1989-90.Similarly, the value

of handicrafts has also registered an increase from Rs. 3500 crores in 1984-85 to Rs. 7067 crores in 1989-90

(1984-85 Prices) and exports from Rs. 1700 crore to Rs. 6400 crore over the same period. For the expansion

of small industries, credit facilities were extended amounting to Rs. 15543 crore as ending March 1990

against Rs. 6766 crores ending June 1985.

EIGHTH FIVE YEAR PLAN (1992–1997)

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre

and the years 1990–91 and 1991–92 were treated as Annual Plans. The Eighth Plan was finally formulated

for the period 1992-1997.1989–91 was a period of economic 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

foreign exchange (forex) reserves, left with reserves of only about US$1 billion. Thus, under pressure, the

country took the risk of reforming the socialist economy. P.V. Narasimha Rao was the tenth Prime Minister

of the Republic of India and head of Congress Party, and led one of the most important administrations in

India's modern history, overseeing a major economic transformation and several incidents affecting national

security. At that time Dr. Manmohan Singh (later Prime Minister of India) launched India's free market

reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of liberalization,

privatisation and globalization (LPG) in India.Modernization of industries was a major highlight of the

Eighth Plan. Under this plan, the gradual opening of the Indian economy was undertaken to correct the

burgeoning deficit and foreign debt. Meanwhile, India became a member of the World Trade Organization

on 1 January 1995. The major objectives included, controlling population growth, poverty reduction,

employment generation, strengthening the infrastructure, institutional building, tourism management, human

resource development, involvement of Panchayati rajs, Nagar Palikas, NGOs, decentralisation and people's

participation.Energy was given priority with 26.6% of the outlay. An average annual growth rate of 6.78%

against the target 5.6% was achieved.To achieve the target of an average of 5.6% per annum, investment of

23.2% of the gross domestic product was required. The incremental capital ratio is 4.1. The saving for

investment was to come from domestic sources and foreign sources, with the rate of domestic saving at

21.6% of gross domestic production and of foreign saving at 1.6% of gross domestic production.

NINETH FIVE YEAR PLAN (1997–2002)

The Ninth Five-Year Plan came after 50 years of Indian Independence. Atal Bihari Vajpayee was the

Prime Minister of India during the Ninth Five-Year Plan. The Ninth Five-Year Plan tried primarily to use

the latent and unexplored economic potential of the country to promote economic and social growth. It

offered strong support to the social spheres of the country in an effort to achieve the complete elimination of

poverty. The satisfactory implementation of the Eighth Five-Year Plan also ensured the states' ability to

proceed on the path of faster development. The Ninth Five-Year Plan also saw joint efforts from the public

and the private sectors in ensuring economic development of the country. In addition, the Ninth Five-Year

Plan saw contributions towards development from the general public as well as governmental agencies in

both the rural and urban areas of the country. New implementation measures in the form of Special Action

Plans (SAPs) were evolved during the Ninth Five-Year Plan to fulfill targets within the stipulated time with

adequate resources. The SAPs covered the areas of social infrastructure, agriculture, information technology

and Water policy.

Budget

The Ninth Five-Year Plan had a total public sector plan outlay of ₹859,200 crore (US$130 billion).

The Ninth Five-Year Plan also saw a hike of 48% in terms of plan expenditure and 33% in terms of the plan

outlay in comparison to that of the Eighth Five-Year Plan. In the total outlay, the share of the center was

approximately 57% while it was 43% for the states and the union territories.The Ninth Five-Year Plan

focused on the relationship between the rapid economic growth and the quality of life for the people of the

country. The prime focus of this plan was to increase growth in the country with an emphasis on social

justice and equity. The Ninth Five-Year Plan placed considerable importance on combining growth oriented

policies with the mission of achieving the desired objective of improving policies which would work

towards the improvement of the poor in the country. The Ninth Five-Year Plan also aimed at correcting the

historical inequalities which were still prevalent in the society.

Objectives

The main objective of the Ninth Five-Year Plan was to correct historical inequalities and increase the

economic growth in the country. Other aspects which constituted the Ninth Five-Year Plan were:

1. Population control

2. Generating employment by giving priority to agriculture and rural development

3. Reduction of poverty

4. Ensuring proper availability of food and water for the poor

5. Availability of primary health care facilities and other basic necessities

6. Primary education to all children in the country

7. Empowering the socially disadvantaged classes like Scheduled castes, Scheduled tribes and other

backward classes

8. Developing self-reliance in terms of agriculture

9. Acceleration in the growth rate of the economy with the help of stable prices

Strategies

1. Structural transformations and developments in the Indian economy.

2. New initiatives and initiation of corrective steps to meet the challenges in the economy of the

country.

3. Efficient use of scarce resources to ensure rapid growth.

4. Combination of public and private support to increase employment.

5. Enhancing high rates of export to achieve self-reliance.

6. Providing services like electricity, telecommunication, railways etc.

7. Special plans to empower the socially disadvantaged classes of the country.

8. Involvement and participation of Panchayati Raj institutions/bodies and Nagar Palikas in the

development process.

Performance

The Ninth Five-Year Plan achieved a GDP growth rate of 5.4% against a target of 6.5% The agriculture

industry grew at a rate of 2.1% against the target of 4.2% The industrial growth in the country was 4.5%

which was higher than that of the target of 3%.The service industry had a growth rate of 7.8%. An average

annual growth rate of 6.7% was reached.The Ninth Five-Year Plan looks through the past weaknesses in

order to frame the new measures for the overall socio-economic development of the country. However, for a

well-planned economy of any country, there should be a combined participation of the governmental

agencies along with the general population of that nation. A combined effort of public, private, and all levels

of government is essential for ensuring the growth of India's economy.The target growth was 7.1% and the

actual growth was 6.8%.

TENTH FIVE YEAR PLAN (2002–2007)

The main objectives of the Tenth Five-Year Plan were:

1. Attain 8% GDP growth per year

2. Reduction of poverty rate by 5% by 2007

3. Providing gainful and high-quality employment at least to the addition to the labor force

4. Reduction in gender gaps in literacy and wage rates by at least 50% by 2007

5. 20-point program was introduced

6. Target growth: 8.1% – growth achieved: 7.7%

7. The tenth plan was expected to follow a regional approach rather than sectoral approach to bring

down regional inequalities

8. Expenditure of ₹43,825 crore (US$6.5 billion) for tenth five years

Out of total plan outlay, ₹921,291 crore (US$140 billion) (57.9%) was for central government and ₹691,009

crore (US$100 billion) (42.1%) was for states and union territories.

ELEVENTH FIVE YEAR PLAN (2007–2012)

1. Rapid and inclusive growth.(Poverty reduction)

2. Emphasis on social sector and delivery of service therein.

3. Empowerment through education and skill development.

4. Reduction of gender inequality.

5. Environmental sustainability.

6. To increase the growth rate in agriculture,industry and services to 4%,10% and 9% respectively.

7. Reduce Total Fertility Rate to 2.1

8. Provide clean drinking water for all by 2009.

9. Increase agriculture growth to 4%.

TWELFTH FIVE YEAR PLAN (2012–2017)

The Twelfth Five-Year Plan of the Government of India has been decided for the growth rate at 8.2% but the

National Development Council (NDC) on 27 Dec 2012 approved 8% growth rate for 12th five-year

plan.With the deteriorating global situation, the Deputy Chairman of the Planning Commission Mr Montek

Singh Ahluwalia has said that achieving an average growth rate of 9 percent in the next five years is not

possible. The Final growth target has been set at 8% by the endorsement of plan at the National

Development Council meeting held in New Delhi."It is not possible to think of an average of 9% (in 12th

Plan). I think somewhere between 8 and 8.5 percent is feasible,” Mr Ahluwalia said on the sidelines of a

conference of State Planning Boards and departments. The approached paper for the 12th Plan, approved

last year, talked about an annual average growth rate of 9%.“When I say feasible... that will require major

effort. If you don’t do that, there is no God given right to grow at 8 percent. I think given that the world

economy deteriorated very sharply over the last year...the growth rate in the first year of the 12th Plan

(2012–13) is 6.5 to 7 percent.”.He also indicated that soon he should share his views with other members of

the Commission to choose a final number (economic growth target) to put before the country’s NDC for its

approval.The government intends to reduce poverty by 10% during the 12th Five-Year Plan. Mr Ahluwalia

said, “We aim to reduce poverty estimates by 9% annually on a sustainable basis during the Plan period.

Earlier, addressing a conference of State Planning Boards and Planning departments, he said the rate of

decline in poverty doubled during the 11th Plan. The commission had said, while using the Tendulkar

poverty line, the rate of reduction in the five years between 2004–05 and 2009–10, was about 1.5%points

each year, which was twice that when compared to the period between 1993–95 to 2004–05. The plan aims

towards the betterment of the infrastructural projects of the nation avoiding all types of bottlenecks. The

document presented by the planning commission is aimed to attract private investments of up to US$1

trillion in the infrastructural growth in the 12th five-year plan, which will also ensure a reduction in subsidy

burden of the government to 1.5 percent from 2 percent of the GDP (gross domestic product). The UID

(Unique Identification Number) will act as a platform for cash transfer of the subsidies in the plan.

CONCLUSION

From the above analysis it is can did that India has made phenomenal progress in its economic front during

planning era. The progress however is not uniform as there appears lopsided development as well as uneven

distribution of wealth among all sections of people in the society. As per the recent estimates made by Dr.

Rangarajan 30.9 per cent of the urban people and 26.4 per cent of the rural people in India are living below

poverty line during 2011-12. The corresponding figures in undivided Andhra Pradesh are 12.7 per cent and

15.6 per cent respectively. There is a criticism that planning in India has made rich still richer and poor more

poorer. According to Ahuwalia "Poverty reduction was achieved to the desired extent during the planning

era. The benefits of growth have trickled down differently among different sections and classes of people. It

was this problem of uneven trickle down effect that led to a world of extreme disparity; some being very

rich while others wallowed in absolute and deprivation". Further serious regional unbalances resulted during

the period of planned economic development since 1950-51. Really speaking the planning mechanism has

itself accentuated the disparity between the stales by having a strong bias in favour of developed states and

neglecting less - developed states. According to the new government at the Centre, the Planning

Commission has not fulfilled its objectives for which it was established and therefore it was abolished and

the Govt. intends to replace it with another efficient body soon.

WEBLIOGRAPHY

www.wikipedia.org

www.planningcommission.nic

www.economicsdiscussion.net

www.gktoday.in