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This article provides information about the post-independence phase of development in India:
With the attainment of independence, India chose to follow the path of planning social and economic development, for which the Planning Commission was set up on 15 March, 1950 under the chairmanship of Pundit Jawaharlal Nehru, the first Prime Minister of India.
Since then, Prime Minister of India has been the ex-officio Chairman of the Planning Commission. Having gone through the background of the Indian economy, the main aims and objectives of the various Five-Year Plans of development.
First Plan (1951-56):
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The First Five-Year Plan, in fact, paved the way for the planned economic development of the country. It had two main objectives. First, to bring the Indian economy out of the state of stagnation caused by the Second World War and partition of the country. Secondly to initiate the process of all-round balanced development of Indian economy, so as to ensure a steady improvement in the living standards of the people over a period of time.
The First Plan accorded the highest priority to agriculture, with special emphasis on rural reconstruction programmes and land reforms, including initiation of various irrigation and power projects. About 44.6 per cent of the total outlay of Rs. 2,069/- crore was allotted for its development. The Plan projected, rather optimistically, that savings and investment as a proportion of national income would rise from an estimated 5 to 6 per cent in the early 1950s to 20 per cent by 1968-69 and stabilise at that level thereafter. Aggregate income was expected to double in approximately twenty years and per capita income in twenty-seven years.
Second Plan (1956-61):
In 1954, Parliament declared that the economic policy should have to achieve al socialistic pattern of society with greater equality in income and wealth in sight. The main aim of the Second Plan was, therefore, to promote a pattern of development, which could lead to the establishment) of a socialistic pattern of society in India.
The Second Plan was aimed at:
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An increase of 25 per cent in the national income;
i. Rapid industrialisation with particular emphasis on the development of basic and heavy industries;
ii. Large expansion of employment opportunities and
iii. Reduction of inequalities in income and wealth and a more even distribution of economic power.
In the Second Plan, there was a special emphasis c industrialisation and it also aimed at increasing the national income by 11 per cent per annum by 1960-61. The development strategy of economic growth through modern industrialisation was continued into the Third Plan.
Third Plan (1961-66):
The immediate objectives the Third Plan, which was aimed at self-sufficiency, were:
i. To secure an increase in the national income of over five per cent per annum and at the same time ensure a pattern of investment which could sustain this rate of growth during subsequent plan periods;
ii. To achieve self-sufficiency in food-grains and increase agricultural production to meet the requirements of industry and exports;
iii. To expand basic industries like steel, chemicals, fuel and power and to establish machine-building capacity, so that the requirements of further industrialisation could be met within a period of ten years or so mainly from the country’s own resources;
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iv. To utilise fully the manpower resources of the country and ensure a substantial expansion in employment opportunities; and
v. To establish progressively greater equality of opportunity and bring about reduction in disparities of income and wealth and a more even distribution of economic power.
Therefore, in this strategy of development, the public sector was expected to promote the growth of infrastructural facilities like basic and heavy industries and on the other hand, to reduce the concentration of economic power through the expansion of public ownership of means of production.
The first phase of development over the first three Five-Year Plan periods was characterised by fairly sustained growth in per capita income, with an 8 to 10 per cent compound growth rate of industrial output, 3 to 3.5 per cent compound growth rate in foodgrains output and around 1.75 per cent growth rate in per capita income, thus indicating a steady improvement compared to the pre-independence past.
Annual Plans (1966-69):
During the fifties and sixties, there was a stable government, thus paving the right way of planning and development. However, the Indo- Pakistan conflict of 1965, two successive years of severe drought, devaluation of the currency, general rise in prices and erosion of resources available for Plan purposes delayed finalisation of the Fourth Plan. Therefore, instead of the Fourth Plan, three Annual Plans were formulated between 1966 and 1969.
Fourth Plan (1969-74):
The Fourth Plan emphasised on improving the condition of the less privileged and weaker sections of society through the provision of employment and education. It aimed at raising the standard of living of the people through various programmes to promote equality and social justice.
Fifth Plan (1974-79):
During this period, the economy was facing severe inflationary pressures. Though the major objectives of the plan were to achieve self- reliance and to adopt measures for raising the consumption standards of the people living below the poverty line, emphasis was also put on bringing inflation under control and to achieve stability in the economic situation.
Sixth Plan (1980-85):
The Sixth Five-Year Plan was formulated after taking into account the achievements and shortcomings of the past three decades of planning. The main objective of the Plan was removal of poverty. Therefore, the strategy was adopted to strengthen the infrastructure for both agriculture and industry. There was also an emphasis on increasing opportunities for employment especially in the rural areas.
Seventh Plan (1985-90):
The main objective of the Seventh Plan was to provide employment opportunities and to raise productivity as well as the growth in food-grains production, with an emphasis on reducing poverty and improving the quality of life in the poor villages and towns.
Eighth (1992-97) and Ninth Plans (1997-2002):
Though the Seventh Five-Year Plan went uninterrupted, there were unstable political developments such as assassination of former Prime Minister Shri Rajiv Gandhi, etc. resulting in short-life governments, and economic crisis due to shortage of foreign exchange. The Eighth Five-Year Plan (1992- 97) was, therefore, launched after return of normalcy in 1992, with its emphasis on generation of adequate employment to near full employment by the turn of the century and to achieve self-sufficiency.
The Eighth Plan was initiated against the backdrop of introduction of economic liberalisation, and structural adjustment programmes. This plan proved to be a turning point when the role of planning in development was questioned and analysed from various viewpoints. Therefore, the Ninth Plan was formulated viewing the role of the state and the private sector as complementary and both were considered essential. The Plan had accorded priority to agriculture and rural development with a view to accelerate the growth rate of the economy.
Tenth Plan (2002-2007):
Presently, the Tenth Five- Year Plan is in operation, with its emphasis on expansion of social and economic opportunities for all individuals and groups with reduction in disparities and an indicative target growth rate of 8.0 per annum.
Many changes in policies and programmes were introduced keeping in mind the needs and demands of the situation. These reforms, to be precise, can be summed up by the notions of “liberalisation, privatisation and globalisation”.