The economy of India is based in part on planning through its five-year plans, which are developed, executed and monitored by the Planning Commission. The tenth plan completed its term in March 2007 and the eleventh plan is currently underway First five year plan (1951- 1956)
The first Indian Prime Minister, Jawaharlal Nehru presented the first five-year plan to the Parliament of India on December 8, 1951.This plan was based on the Harrod-Domar model. The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation. The agricultural sector was hit hardest by the partition of India and needed urgent attention. The total planned budget of 2069 crore was allocated to seven broad areas: irrigation and energy (27.2 percent), agriculture and community development (17.4 percent), transport and communications (24 percent), industry (8.4 percent), social services (16.64 percent), land rehabilitation (4.1 percent), and for other sectors and services (2.5 percent). The most important feature of this phase was active role of state in all economic sectors. Such a role was justified at that time because immediately after independence, India was facing basic problems—deficiency of capital and low capacity to save. The target growth rate was 2.1% annual gross domestic product (GDP) growth; the achieved growth rate was 3.6% Second five year plan (1956-1961)
The second five-year plan focused on industry, especially heavy industry. Domestic production of industrial products was encouraged in the Second plan, particularly in the development of the public sector. The total amount allocated under the second five year plan in India was Rs. 4,600 crore. This amount was allocated among various sectors: * Power and irrigation
* Social services
* Communications and transport
Target Growth:4.5% Growth achieved:4.0%
Third five year plan (1961- 1966)
The third plan stressed on agriculture and improvement in the production of wheat, but the brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards the [Defence industry]. In 1965–1966, India fought a [Indo-Pak] War with Pakistan. Due to this there was a severe drought in 1965. The war led to inflation and the priority was shifted to price stabilisation. The construction of dams continued. Many cement and fertilizer plants were also built. Punjab began producing an abundance of wheat.
The target growth rate of GDP(gross domestic product)was 5.6 percent. The achieved growth rate was 2.2 percent.
Fourth five year plan (1969-1974)
The Indira Gandhi government nationalised 14 major Indian banks and the Green Revolution in India advanced agriculture. Funds earmarked for the industrial development had to be diverted for the war effort.
Target Growth: 5.7% Actual Growth: 3.30%
Fifth five year plan (1974- 1979)
Stress was by laid on employment, poverty alleviation, and justice. The plan also focused on self-reliance in agricultural production and defence. The Indian national highway system was introduced and many roads were widened to accommodate the increasing traffic. Tourism also expanded.
Target Growth: 4.4% Actual Growth: 5.0
Sixth five year plan (1980-1985)
The sixth plan also marked the beginning of economic liberalization. Price controls were eliminated and ration shops were closed. This led to an increase in food prices and an increase in the cost of living. This was the end of Nehruvian Plan and Rajiv Gandhi was prime minister during this period. Family planning was also expanded in order to prevent overpopulation.
Target Growth: 5.2% Actual Growth: 5.4%
Seventh five year plan (1985-1990)
The Seventh Plan marked the comeback of the Congress Party to power. The plan laid stress on improving the productivity level of industries by upgrading of technology. The main objectives of the 7th five year plans were to establish growth in areas of...