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INDIAN ECONOMY
A policy of mixed economy is followed in the country. In a mixed economy, the public sector enterprises (government-
owned) exist alongside the private sector to achieve a socialist pattern of society in a welfare state.
PLANNING IN INDIA
In March 1950, Government of India constituted a statutory body with the Prime Minister of India as its Chairman-
called the Planning Commission. Pt. Jawaharlal Nehru was the first Chairman of the Planning Commission.
It is an advisory body attached to the Planning Commission and was established in 1965. It includes experts
representing a cross-section of the Indian economy.
Chief Ministers of the states, together with the members of the Planning Commission, constitute the National
Development Council. The Prime Minister of India presides over the Council.
The development plans are drawn by the Planning Commission to establish India's economy on a socialistic pattern in
successive phases of five year Periods-called the Five Year Plans. The organisation was set up to formulate basic
economic policies, draft plans and watch its progress and implementation. It consists of:
In July 1951, the Planning Commission issued the draft outline of the First Five Year Plan for the period April 1951 to
March 1956. It was presented to the Parliament in December 1952. In the First Plan, agriculture received the main
thrust, for sustaining of growth and development of industries which would not be possible without a significant rise in
the yield of raw materials and food.
Objectives:
The main objective was to launch upon industrialisation and strengthen the industrial base of the economy. It was in
this light that the 1948 Industrial Policy Resolution was revised and a new resolution of 1956 was adopted. The Second
Plan started with an emphasis on the expansion of the public sector and aimed at the establishment of a socialistic
pattern of society.
Objectives:
ii) Rapid industrialisation of the country with particular emphasis on the development of basic and key industries.
Outlay: The Second Plan proposed a total public sector outlay of Rs. 4,800 crores though actual outlay was only Rs.
4,672 crore.
In the third Plan, the emphasis was on long-term development. The Third Plan report stated that during the five-year
period concerned, the Indian economy "must not only expand rapidly but, at the same time, become self-reliant and
self-generating."
Objectives:
i) An increase in national income of more than 5 per cent annually. The investment pattern laid down must be capable
of sustaining this growth rate in the subsequent years.
ii) An increase in the agricultural produce and to achieve self sufficiency by increasing food grain production.
iii) Greater equality of opportunities, more even distribution of economic power and reducing wealth and income
disparities.
After the ‘Plan Holiday', the Fourth Plan was begun in 1969.
Objectives:
Outlay: The total proposed outlay was Rs. 24,880 crore, which included Rs. 15,900 crores as public sector outlay and
Rs. 8,980 crore as private sector outlay.
The Plan was formulated against the background of sever inflationary pressure.
Objectives: In addition to removal of poverty and attainment of self-reliance, the Fifth Plan had the following major
objectives.
i) 5.5 per cent overall rate of growth in Gross Domestic objectives.
ii) Expansion of productive employment and fuller utilisation of existing skills and equipment.
iii) A national programme for minimum needs and extended programmes of social welfare.
Outlay: A total outlay of Rs. 53,410 crore was proposed for the Fifth Plan.
The draft of the Sixth Five Year Plan (1978-1983) was presented in 1978. However, the plan was terminated with the
change of Government in January 1980. The new Sixth Five Year Plan was implemented in April 1980.
Objectives:
Outlay: The proposed outlay for the Sixth Plan totalled Rs.
1, 58, 710 crore.
The draft of the Seventh Plan was approved on November 9, 1985 by the National Development Council. The plan was
part of the long-term plan for the period of 15 years.
Objectives:
The Eighth Plan proposed a growth rate of 5.6 per cent per annum on an average during the plan period. The Eighth
Plan focused on (i) clear prioritisation of sectors/projects for investment in order to facilitate implementation of the
policy initiatives taken in the areas of fiscal, trade and industrial sectors and human development.
Objectives:
i) Generation of adequate employment of achieve near full employment level by the turn of the century.
ii) Containment of population growth through people's active co-operation and an effective scheme of incentives and
disincentives.
iii) Universalisation of elementary education and complete eradication of illiteracy among the people in the age group
of 15 to 35 years.
Objectives:
v.) Empowerment of women and socially disadvantaged groups such as SC/ST, backward classes and minorities.
vi.) Promoting and developing participatory institutions like "Panchayati Raj" institutions, co-operatives and self-help
groups.
On December 21, 2002, the Tenth Five Year Plan was approved by the National Development Council (NDC). The
Plan has further developed the NDC mandated objectives, of doubling per capita income in 10 years, and achieving a
growth rate of 8% of GDP per annum. An 8% growth rate is considered necessary for achieving the social and
economic targets of Tenth Plan Keeping in mind decadal growth performance and the steady acceleration that the
country has recorded in growth over the past two decades, it is a realisable target. The plan has a number of new
features, such as, for the first time
(a) It recognises the rapid growth of labour force over the next decade
(b) Addresses the issue of poverty and the unacceptably low levels of social indicators
(c) Adopted a "differential development strategy" to equate national targets into balanced regional development as there
is vast difference in the potentials and constraints of each state
(d) Recognises that the governance is perhaps one of the most important factors for ensuring realisation of the Plan
(e) Identifies measures to improve efficiency, unleash entrepreneurial energy, and promote rapid and sustainable
growth
(f) Proposes major reforms for agricultural sector making 'agriculture' the core element of the Plan.
Since economic growth is not the only objective, the Plan aims at harnessing the benefits of growth to improve the
quality of life of the people by setting the following key targets:
1. All children to be in school by 2003 and all children to complete five years of schooling by 2007
3. Growth in gainful employment to, at least, keep pace with addition to the labour force
8. .Maternal Mortality Rate (MMR) to be reduced from 4 per 1000 in 1999-2000 to 2 per 1000 in 2007
The United Progressive Alliance government issued a paper in the eleventh plan titled "Towards faster and more
inclusive growth." According to the approach paper, the monitorable targets of five-year plan are:
9. Ensure electricity connection to all villages and broadband over power lines (BPL) households by 2009
10. Roads to all villages that have a population of 1000 and above by 2009;
12. Achieve the World Health Organization standard air quality in major cities by 2011-12;