On January 26, 1950, the Constitution went into effect. Following that, on March 15, 1950, the Planning Commission was established, and the plan period began on April 1, 1951, with the unveiling of the First Five-Year Plan (1951-56).
This page will provide you with information about the history and goals of economic planning in India, as well as the Five Year Plans, the Planning Commission, and its successor, the NITI Aayog. The list of Five Year Plans, their objectives, and assessments are also available in PDF format.
Economic Planning In India – Five Year Plans
The phrase "economic planning" refers to the Indian government's long-term plans to expand and coordinate the economy while making effective use of resources. Economic planning in India began after the country's independence in 1950, when it was thought important for the country's economic growth and development.
List of Five Year Plans in India-Download PDF Here
Long term objectives of Five Year Plans in India are:
- High Growth rate to improve the living standard of the residents of India.
- Economic stability for prosperity.
- Self-reliant economy.
- Social justice and reducing the inequalities.
- Modernization of the economy.
Under the socialist influence of first Prime Minister Pt. Jawahar Lal Nehru, the notion of five-year economic planning was borrowed from the Soviet Union.
The first eight Indian five-year plans focused on expanding the public sector through massive investments in heavy and basic sectors, but since the start of the Ninth five-year plan in 1997, the focus has moved to making the government a growth facilitator.
The following is a list of all Five Year Plans that have been executed in India:
| List of Five Year Plans in India [1951-2017] | |||
| Five Year Plans | Years | Assessment | Objective |
| First Five year Plan | 1951- 1956 | Targets and objectives more or less achieved. With an active role of the state in all economic sectors. Five Indian Institutes of Technology (IITs) were started as major technical institutions. | Rehabilitation of refugees, rapid agricultural development to achieve food self-sufficiency in the shortest possible time and control of inflation. |
| Second Five year Plan | 1956-1961 | It could not be implemented fully due to the shortage of foreign exchange. Targets had to be pruned. Yet, Hydroelectric power projects and five steel mills at Bhilai, Durgapur, and Rourkela were established. | The Nehru-Mahalanobis model was adopted.‘Rapid industrialisation with particular emphasis on the development of basic and heavy industries Industrial Policy of 1956 accepted the establishment of a socialistic pattern of society as the goal of economic policy. |
| Third Five year Plan | 1961-1966 | Failure. Wars and droughts. Yet, Panchayat elections were started.• State electricity boards and state secondary education boards were formed. | ‘establishment of a self-reliant and self-generating economy’ |
| Plan Holidays – Annual Plans | 1966-1969 | A new agricultural strategy was implemented. It involved the distribution of high-yielding varieties of seeds, extensive use of fertilizers, exploitation of irrigation potential and soil conservation measures. | crisis in agriculture and serious food shortage required attention |
| Fourth Five year Plan | 1969-1974 | Was ambitious. Failure. Achieved growth of 3.5 percent but was marred by Inflation. The Indira Gandhi government nationalized 14 major Indian banks and the Green Revolution in India advanced agriculture. | ‘growth with stability’ and progressive achievement of self-reliance Garibi HataoTarget: 5.5 pc |
| Fifth Five year Plan | 1974-1979 | High inflation. Was terminated by the Janta govt. Yet, the Indian national highway system was introduced for the first time. | ‘removal of poverty and attainment of self-reliance’ |
| Sixth Five year Plan | 1980-1985 | Most targets achieved. Growth: 5.5 pc.Family planning was also expanded in order to prevent overpopulation. | ‘direct attack on the problem of poverty by creating conditions of an expanding economy’ |
| Seventh Five year Plan | 1985-1990 | With a growth rate of 6 pc, this plan was proved successful in spite of severe drought conditions for the first three years consecutively. This plan introduced programs like Jawahar Rozgar Yojana. | Emphasis on policies and programs that would accelerate the growth in foodgrains production, increase employment opportunities and raise productivity |
| Annual Plans | 1989-1991 | It was the beginning of privatization and liberalization in India. | No plan due to political uncertainties |
| Eighth Five year Plan | 1992-1997 | Partly success. An average annual growth rate of 6.78% against the target 5.6% was achieved. | Rapid economic growth, high growth of agriculture and allied sector, and the manufacturing sector, growth in exports and imports, improvement in trade and current account deficit. to undertake an annual average growth of 5.6% |
| Ninth Five year Plan | 1997-2002 | It achieved a GDP growth rate of 5.4%, lower than the target. Yet, industrial growth was 4.5% which was higher than targeted 3%. The service industry had a growth rate of 7.8%. An average annual growth rate of 6.7% was reached. | Quality of life, generation of productive employment, regional balance and self-reliance.Growth with social justice and equality. growth target 6.5% |
| Tenth Five year Plan | 2002 –2007 | It was successful in reducing the poverty ratio by 5%, increasing forest cover to 25%, increasing literacy rates to 75 % and the economic growth of the country over 8%. | To achieve 8% GDP growth rate,Reduce poverty by 5 points and increase the literacy rate in the country. |
| Eleventh Five year Plan | 2007-2012 | India has recorded an average annual economic growth rate of 8%, farm sector grew at an average rate of 3.7% as against 4% targeted. The industry grew with an annual average growth of 7.2% against 10% targeted. | Rapid and inclusive growth.Empowerment through education and skill development. Reduction of gender inequality.Environmental sustainability.To increase the growth rate in agriculture, industry, and services to 4%,10% and 9% resp. Provide clean drinking water for all by 2009. |
| Twelfth Five year Plan | 2012-2017 | Its growth rate target was 8%. | “faster, sustainable and more inclusive growth”. Raising agriculture output to 4 percent. Manufacturing sector growth to 10 %The target of adding over 88,000 MW of power generation capacity. |
Objectives of Economic Planning in India
The following were the original objectives of economic planning in India:
- Economic development is the primary goal of Indian planning. Increased Employment Levels: India's economic development is evaluated by increases in Gross Domestic Product (GDP) and Per Capita Income. In India, one of the most significant goals of economic planning is to better use the country's existing people resources through raising employment levels.
Self-sufficiency: India aspires to be self-sufficient in main commodities while simultaneously increasing exports. During the third five-year plan, from 1961 to 1966, the Indian economy had reached a critical stage of growth. - Economic Stability: In addition to India's economic development, India's economic planning strives for stable market conditions. This entails maintaining a modest rate of inflation but simultaneously avoiding price deflation. The creation of structural faults in the economy occurs when the wholesale price index gets very high or extremely low, and economic planning seeks to avoid this.
Social Welfare and Efficient Social Service Provision: All five-year plans, as well as plans proposed by the NITI Aayog, aim to improve labour welfare and social welfare for all parts of society. Education, healthcare, and emergency services have all seen significant growth in India. - Regional Development: India's economic strategy tries to decrease regional development discrepancies. Some states, such as Punjab, Haryana, Gujarat, Maharashtra, and Tamil Nadu, are economically developed, whilst others, such as Uttar Pradesh, Bihar, Orissa, Assam, and Nagaland, are not. Others, such as Karnataka and Andhra Pradesh, have had unequal growth, with world-class economic hubs in cities and a less developed countryside. In India, planning attempts to investigate these inequities and provide methods to address them.
- Comprehensive and Long-Term Development: One of the key goals of economic planning is to develop all economic sectors, such as agriculture, industry, and services.
Economic Inequality Reduction: Since independence, reducing inequality through progressive taxation, job creation, and job reservation has been a fundamental goal of Indian economic planning. - Social Justice: This planning goal is intertwined with all the others, and it has long been a focal point of planning in India. Its goal is to lower the number of individuals living in poverty by providing them with jobs and social services.
Increased Standard of Life: One of the key goals of India's economic planning is to raise the standard of living by raising per capita income and ensuring fair distribution of income.
History of Economic Planning In India
Economic planning in India stretches back to the pre-Independence period, when leaders of the freedom movement, important businessmen, and academics met to debate India's destiny after the impending independence. M. Visvesvaraya, a well-known civil engineer and administrator, is widely recognised as India's first economic planner. Based on the economic situation of the period, his book "Anticipated Economy for India" released in 1934 proposed a ten-year plan with a budget of Rs. 1000 crore and a planned rise of 600 percent in industrial production each year.
A Planning Commission should be established, and a diversified economic model should be followed, according to the Industrial Policy Statement, which was released shortly after independence in 1948. The following are the significant milestones in India's economic planning:
- Setting up of the Planning Commission: 15 March 1950
- First Five Year Plan: 9 July 1951
- Dissolution of the Planning Commission: 17 August 2014
- Setting up of NITI (National Institution for Transforming India) Aayog: 1 January 2015
The establishment of the NITI Aayog marked a significant departure from India's command economy system, which had been in place until 1991. Due to current economic realities, the Planning Commission's top-down paradigm of development has become obsolete, and NITI Aayog conducts economic planning in a participatory fashion, with input from various state governments and think tanks.
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