An Overview of Five Year Plans (Planning Commission)

The Planning Commission was set up in March, 1950 by a Resolution of the Government of India. The economy of India is based on planning through its five-year plans, developed, executed and monitored by the Planning Commission .

With the Prime Minister as the ex-official Chairman, the commission has a nominated Deputy Chairman, who has rank of a Cabinet minister. Montek Singh Ahluvaliya was the last Deputy Chairman of the Commission. The eleventh plan completed its term in March 2012 and twelfth plan is currently underway.

Five Year Plans in India

Planning without an objective is like driving without any destination. There are two sets of objectives for planning, namely the short-term objectives and the long-term objectives. While the short-term objectives vary from plan to plan, depending on the immediate problems faced by the economy, the process of planning is inspired by certain long term objectives.

The long-term objectives are:

A high rate of growth

Economic self-reliance

Social justice and

Modernization of the economy

Economic stability

First Five Year Plan

First Plan (1951 − 56) It was based on Harrod-Domar Model. Community Development Program was launched in 1952. Emphasized on agriculture, price stability, power & transport. It was more than a success, because of good harvests in the last two years.

Second Five Year Plan

Second Plan (1956 − 61) Also called Mahalanobis Plan after its chief architect. Its objective was rapid industrialization. Advocated huge imports which led to emptying of funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon. During this plan, price level increased by 30%, against a decline of 13% during the First Plan.

Third Five Year Plan

Third Plan (1961 − 66) At its conception time, 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. Also, it was realized from the experience of first two plans that agriculture should be given the top priority to suffice the requirement of export and industry. Complete failure due to unforeseen misfortunes, viz. Chinese aggression (1962), Indo-Pak war (1965), severest drought in 100 years (1965 − 66).

Three Annual Plans (1966 − 69): 

Plan holiday for 3 years. The 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 involving wide-spread distribution of High-Yielding Varieties of seeds, the extensive use of fertilizers, exploitation of irrigation potential and soil conservation was put into action to tide-over the crisis in agricultural production. During the Annual Plans, the economy basically absorbed the shocks given during the Third Plan, making way for a planned growth.

Fourth Five Year Plan

Fourth Plan (1969 − 74). Main emphasis on agriculture’s growth rate so that a chain reaction can start. Fared well in the first two years with record production but last three years were failure because of poor monsoon. Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo-Pak war.

Fifth Five Year Plan

Fifth Plan (1974 − 79) The fifth plan prepared and launched by D D Dhar proposed to achieve two main objectives viz, ‘removal of poverty’ (Garibi Hatao) and ‘attainment of self reliance’ through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings. The plan was terminated in 1978 (instead of 1979) when Janta Govt. Came to power.

Rolling Plan

Rolling Plan (1978 − 80) There were 2 Sixth Plans. First one is by Janta Govt (for 78 − 83) which was in operation for only 2 years. Second is by the Congress Govt. when it returned to power in 1980.

Sixth Five Year Plan

Sixth Plan (1980 − 85) Objectives: Increase in national income, modernization of technology, ensuring continuous decrease in poverty and unemployment, population control through family planning, etc.

Seventh Five Year Plan

Seventh Plan (1985 − 90) The Seventh plan emphasized policies and programs which aimed at rapid growth in food-grains production, increased employment opportunities and productivity within the framework of basic tenants of planning. It was a great success, the economy recorded 6% growth rate against the targeted 5%.

Eighth Five Year Plan

Eighth Plan (1992 − 97) The eighth plan was postponed by two years because of political upheavals at the Centre and it was launched after a worsening Balance of Payment position and inflation during 1990 − 91. The plan undertook various drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6% Some of the main economic performances during eighth plan period were rapid economic growth, high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit.

Ninth Five Year Plan

Ninth Plan (1997 − 2002) It was developed in the context of four important dimensions: Quality of life, generation of productive employment, regional balance and self-reliance.

Tenth Five Year Plan

Tenth Plan (2002 − 2007) to achieve the growth rate of GDP@8%.

Reduction of poverty ratio to 20% by 2007 and to 10% by 2012.

Providing gainful high quality employment to the addition to the labour force over the tenth plan period.

Universal access to primary education by 2007.

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

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

20-point program was introduced.

Eleventh Five Year Plan

Eleventh plan (2007-2012) The overall and comprehensive picture of the growth and plan performance during the 11th Five Year Plan (2007 – 2012) and performance of various Flagship programmes being implemented in the state for Economic growth, Ensuring Equity and Social Justice

Twelvth Five Year Plan

12th Five Year Plan(2012-2017). The Twelvth Five-Year Plan of the Government of India has 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.