In
India the planned economic development began in 1951 with the inception of
First Five Year Plan. The theoretical efforts for economic development in
Indian economy had already begun before independence. In the year 1934, Sir M.
Visheshvaraya wrote a book named 'Planned Economy of India', which was the
first attempt in this direction. In 1938, the Indian National Congress, under
the leadership of Pt. Jawaharlal Nehru, made a National Planning Committee. Its
recommendations could not be implemented due to the beginning of the Second
World War and and changes in the Indian Political Situation. In 1944, eight
industrialists of Bombay presented well organised plan called "The Bombay
Plan", which could not be brought into action due to various reasons. In
August 1944, the Indian Government inaugurated separate department called 'The
Planning and Development Department' and appointed Sir Ardishar Dalal, the
controller of Bombay Plan, as its acting member.
Inspired
by the economic views of Mahatma Gandhi, Shri Sriman Narayan constructed a plan
in 1944 which is known as 'Gandhian Plan'. Mr. M. N. Rao, the Chairman of
post-war Reconstruction Committee of Indian Trade Union, introduced a 'People's
Plan' in April 1945. This plan introduced before independence again could not
be implemented due to various reasons. In 1946, the Interim Government was
formed in India. This Government established a High Level Advisory Planning
Board in order to study the problems of planning and development in the
country. The Board studied all the problems very deeply and gave recommendation
to establish a stable planning commission at the central level which could
continuously work for the planning and development of the country. In January
1950, Shri Jaiprakash Narayan published a plan called 'Sarvodaya Plan'. The
Government did not accept the entire plan and adopted only a part of it. The
Planning Commission was constituted on 15th March, 1950, by the Government of
India.
Functions
The
1950 resolution setting up the Planning Commission outlined its functions as
to:
1. Make
an assessment of the material, capital and human resources of the country,
including technical personnel, and investigate the possibilities of augmenting
such of these resources as are found to be deficient in relation to the nation’s
requirement;
2. Formulate
a Plan for the most effective and balanced utilisation of country's resources;
3. On
a determination of priorities, define the stages in which the Plan should be
carried out and propose the allocation of resources for the due completion of
each stage;
4. Indicate
the factors which are tending to retard economic development, and determine the
conditions which, in view of the current social and political situation, should
be established for the successful execution of the Plan;
5. Determine
the nature of the machinery which will be necessary for securing the successful
implementation of each stage of the Plan in all its aspects;
6. Appraise
from time to time the progress achieved in the execution of each stage of the
Plan and recommend the adjustments of policy and measures that such appraisal
may show to be necessary; and
7. Make
such interim or ancillary recommendations as appear to it to be appropriate
either for facilitating the discharge of the duties assigned to it, or on a
consideration of prevailing economic conditions, current policies, measures and
development programmes or on an examination of such specific problems as may be
referred to it for advice by Central or State Governments.
Evolving Functions
From
a highly centralised planning system, the Indian economy is gradually moving
towards indicative planning where Planning Commission concerns itself with the
building of a long term strategic vision of the future and decide on priorities
of nation. It works out sectoral targets and provides promotional stimulus to
the economy to grow in the desired direction.
Planning
Commission plays an integrative role in the development of a holistic approach
to the policy formulation in critical areas of human and economic development.
In the social sector, schemes which require coordination and synthesis like
rural health, drinking water, rural energy needs, literacy and environment
protection have yet to be subjected to coordinated policy formulation. It has
led to multiplicity of agencies. An integrated approach can lead to better
results at much lower costs.
The
emphasis of the Commission is on maximising the output by using our limited
resources optimally. Instead of looking for mere increase in the plan outlays,
the effort is to look for increases in the efficiency of utilisation of the
allocations being made.
With
the emergence of severe constraints on available budgetary resources, the
resource allocation system between the States and Ministries of the Central
Government is under strain. This requires the Planning Commission to play a
mediatory and facilitating role, keeping in view the best interest of all
concerned. It has to ensure smooth management of the change and help in
creating a culture of high productivity and efficiency in the Government.
The
key to efficient utilisation of resources lies in the creation of appropriate
self-managed organisations at all levels. In this area, Planning Commission
attempts to play a systems change role and provide consultancy within the
Government for developing better systems. In order to spread the gains of
experience more widely, Planning Commission also plays an information
dissemination role.
Organisation
The
composition of the Commission has undergone a lot of change since its
inception. With the Prime Minister as the ex-officio Chairman, the committee
has a nominated Deputy Chairman, who is given the rank of a full Cabinet
Minister. Mr. Montek Singh Ahluwalia is presently the Deputy Chairman of the
Commission.
Cabinet
Ministers with certain important portfolios act as part-time members of the
Commission, while the full-time members are experts of various fields like
Economics, Industry, Science and General Administration.
The
Commission works through its various divisions, of which there are three kind:
·
General Planning Divisions
·
Programme Administration Divisions
·
The majority of experts in the
Commission are economists, making the Commission the biggest employer of the
Indian Economic Services.
1st Five Year Plan (1951-56)
It
aimed towards the improvement in the fields of agriculture, irrigation and
power and the plan projected to decrease the countries reliance on food grain
imports, resolve the food crisis and ease the raw material problem especially
in jute and cotton.
Nearly 45% of the resources were designated for
agriculture, while industry got a modest 4.9%. The focus was to maximize the
output from agriculture, which would then provide the momentum for industrial
growth.
1st five year plan proved dramatic success as
agriculture production hiked, national income went up by 18%, per capita income
by 11% and per capita consumption by 9%.
2nd Five Year Plan (1956-61)
It
projected towards the agriculture programs and to meet the raw material needs
of industry, besides covering the food needs of the increasing population. The
Industrial Policy of 1956 was socialistic in nature. The plan aimed at 25%
increase in national income.
Second Five Year Plan showed a moderate success. Agricultural
production was greatly affected by the unfavorable monsoon in 1957-58 and
1959-60 and also the Suez crisis blocked International Trading increasing
commodity prices.
3rd Five Year Plan (1961-66)
Plan’s
main motive was to make the country self reliant in agriculture and industry
and for this allotment for power sector was increased to 14.6% of the total
disbursement.
The plan aimed to increase national income by 30%
and agriculture production by 30% and to promote economic developments in backward
areas; unfeasible manufacturing units were augmented with subsidies and
agriculture production by 30%.
The 3rd five year plan was affected by wars with
China in 1962 and Pakistan 1965 and bad monsoon.
4th Five Year Plan (1969-74)
This
five year plan mainly emphasized on encouraging education and creating
employment opportunities for the marginalized section of the society as
improvement in their standard of living would only make the country
economically self- reliant.
Another aim of the plan was to create awareness
about the Family planning program among Indians. The achievements of the fourth
plan were not as per the expectations as agriculture and industrial growth was
just at 2.8% and 3.9% respectively.
5th Five Year Plan (1974-79)
The
fifth plan mainly aimed on checking inflation and various non-economic
variables like nutritional requirements, health, family planning etc. The plan
anticipated 5.5% growth rate in national income.
The plan could not complete its 5 year tenure and
was discontinued by the new Janata government in the fourth year only.
6th Five Year Plan (1980-85)
The
6th five year plan was formulated by the Congress government in 1980 which
equally focused on infrastructure and agriculture. The plan was successful in
achieving a growth of 6% pa.
7th Five Year Plan (1985-1989)
The
plan focused at improving various sectors like welfare, education, health,
family planning and also encouraged employment opportunities. The plan
introduced programs like Jawahar Rozgar Yojana.
This plan was proved successful in spite of severe
drought conditions for first three years consecutively.
Period (1989 - 1991)
This
period was of political instability hence, no five year plan was implemented
during the period; only annual plans were made for the period between 1990 and
1992. The country faced severe balance of payment crisis.
8th Five Year Plan (1992-1997)
The
eighth plan aimed towards modernization of industries, poverty reduction,
encouraging employment, strengthening the infrastructure. Other important
concerned areas were devaluation of rupees, dismantling of license prerequisite
and decrease trade barriers.
The plan helped to achieve an annual growth rate of
5.6% in GDP and also controlled inflation.
9th Five Year Plan (1997-2002)
The
ninth five year plan focused on increasing agricultural and rural income and to
improve the conditions of the marginal farmer and landless laborers.
The
plan helped to achieve average annual growth rate of 6.7%.
10th Five Year Plan (2002-2007)
The
10th five year plan targeted towards making India’s economy as the fastest
growing economy on the global level, with an aim to raise the growth rate to
10% and to reduce the poverty rate and increase the literacy rate in the
country.
The plan showed success in reducing poverty ratio by
5%, increasing forest cover to 25%, increasing literacy rates to 75 % and
taking the economic growth of the country over 8%.
11th Five Year Plan (2007-2012)
The
eleventh five year plan targets to increase GDP growth to 10%, to reduce
educated unemployment to below 5% while it aims to reduce infant mortality rate
to 28 and maternal mortality ratio to 1 per 1000 live births, reduce Total
Fertility Rate to 2.1 in the health
sector.
The
plan also targets to ensure electricity connection and clean drinking water to
all villages and increase forest and tree cover by 5%.
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