objective of economic plan

8/4/2019 Objective of Economic Plan

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Objectives of planning in India


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Phase I : growth oriented development (1951-65)

1.First FYP (1951-56)

A repair plan (due to the severe damage by famine 43, and

partition ,47)A Harrod- Domar model of development economics.

FYP had a target of 2.1% growth in NI

Priority given to agriculture sector.

Finally resulted in 3.6% growth in NI.Successful plan.


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2. Second FYP (1956-61)

The Mahalanobis development strategy plan

An import substitution led growth

A metal and machine strategy Developing strong base for initiating the process of long

term growth

High priority to industrialization

Emphasis on development of capital goods industriesagainst consumer goods industries.

Rapid development of public sector

Aimed at 4.5% growth although achieved 4.2% grwoth in

NIDemerits

Wrong assessment of food situation & fast growth ofindustrialization

Price rise

Foreign exchange problem


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3. Third FYP (1961-66)

Kept basic element of industrial strategy along withstressing on agriculture sector.

Emphasis on public sector.

Promotion in infrastructural facilities like irrigationprojects, rail & road transportation, coal , power projectsand industries.

Aimed at 5.6% growth in NI and self sufficiency in foodgrains and expanding basic industries to meet futurerequirements.

Demerit

2 consecutive years of bad harvest (1965-67)

War with China in 1962 and with Pakistan in 1965.

Drought in 1965-66 followed by another in 1966-67.

Devaluation of rupee.


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Result

Increased dependency on imports and depressed thegrowth of economy.

Growth rate came down to 2.8%. Too much distress in the economy as a result planning was

abandoned for three years. (there were 3 annual plans from1966-69)


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Phase II : equity oriented development (1966-90)

1. Annual plans (1966-69)

Emphasis on technological reforms in agriculture. Development of HYV seeds, chemical fertilizers,

commercial sources of energy & controlled water supply.

Introduction of price support policy which made

agricultural prices downwardly rigid. New agriculture strategy (NAS) or the green revolution

stressed on the use of industrial inputs in agriculturewhich made agriculture- Industrial linkage two-way.


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2. Fourth FYP (1969-74)

Emphasized on growth with stability.

Reducing fluctuations in agricultural productions.

Reducing dependence on foreign assistance. Aimed at 5.7% growth in NI.

Demerits

Poor monsoon conditions and shortage of criticalinputs(power)

Actual achievement of only 3.2%.


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3. Fifth FYP (1974-79)

No radical or bold changes in this plan.

Stress on elimination of poverty.

Aimed at a growth of only 4.4% .

4.7% growth was achieved due to erratic growth inagriculture.

4. Sixth FYP (1980-85)

this plan centered around fuel & food.

Thepetrochemical & related industries and the consumer

durableswere the engines in contrast to metals andmachines of Mahalanobins period.

Emphasis on growth and its trickle down effect to reach thepoor.

Special programs directed towards the poor like short term


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Short -term wage employment in rural areas.

Aimed at 5.2% growth.

Merits

Targets were achieved.

Good agricultural performance.

Rapid growth in service sector.


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Seventh FYP (1985-90)

Focus on human resource development Eg. Education,

technical tanning & health.

Expect for 32 industries, all industries were delicensed by1988.

Focus on inward development model.

Attack on poverty, unemployment, regional imbalance.

Extending green revolution to other areas, emphasizingon productivity of rice in eastern region.

Aimed at a growth of 5 % .

Merits

Excellent harvest

Recorded growth of 5.3%


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Phase III: objective of having growth with social justice (1991

onwards)

1. Eighth FYP (1992-97)

Aimed at extending economic reforms & building asound foundation for growth.

Focus on export promotion through high comptitiveness.

Tariffs were lowered.

Quantitative restrictions were removed. Trade & foreign investment liberalization measures were

removed.

Efforts to improve efficiency in operations of public

sector enterprises were made. Efforts were made to encourage farmers into agri-

business.


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It was realized that efficiency & growth are importantinstruments to remove poverty.

Efforts were made to control population growth throughdynamic family welfare program.

Human development was stressed.

Aimed a growth rate of 5.6% and finally achieved 6.5%growth.

2. Ninth FYP (1997-2002)

Growth with social justice with equity.

Recognition of link between rapid growth and

improvement in quality of life . People oriented planning hence the emergence of general

people in planning like panchayat raj institutions, Co-operative institutions& self help groups.


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Aimed at a growth of 6.5% and achieved only 5.5%.

Demerits East Asian crisis in 1997-98.

Increase in oil prices in 2000-01.

World economic slowdown.

Natural disasters like Orissa cyclone & the Gujaratearthquake.

Two consecutive year of poor planning in agriculture.


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3. Tenth FYP (2002-07)

To develop strategies that would enable the private sector

to reach its full potential for raising production, jobs andincome levels in society

Agriculture development that ensured widest spread ofbenefits to the rural poor.

Continuing & expanding programs to supplement theimpact of development for benefit of those target groupswhich had not sufficiently benefitted from normal growthprocess.

Aimed at achieving 8% but actually achieved 7.6%.


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Plan objective

Plan Focus areaFirst FYP Agricultural development

Second FYP Import Substitution led growth

Third FYP Economic sufficiency

Fourth FYP technological reforms in agricultureFifth FYP Elimination of poverty

Sixth FYP Food & Fuel strategy

Seventh FYP HRD

Eighth FYP LPG modelNinth FYP Growth with social justice & equity

Tenth FYP Growth with social justice & equity

Eleventh FYP Faster, broader & inclusive growth.


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Achievements of planning

Satisfactory growth Modernization

Self- reliance

Providing equity and social justice

failures of planning

Poor stdof living

Inflation

Unemployment

Less growth in agriculture sector.


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Inequality in distribution of income & wealth.

Inefficient administration.

Shortfall in target realization.

Unbalanced growth.

Inferior development of infrastructure.


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objective of economic plan

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