Five Year Plans

First Five-Year Plan (1951-56)

• The First Five Year Plan laid the thrust of economic development in India.
• It was presented by the first Indian Prime Minister, Jawaharlal Nehru to the Parliament of India.
• K.N Raj, a young economist, argued that India should “hasten slowly” for the first two decades.
• It mainly addressed the agrarian sector, including investment in dams and irrigation. Ex- Huge allocations were made for Bhakhra Nangal Dam.
• It was based on the Harrod Domar Model and emphasised increasing savings.
• By the end of 1956, five Indian Institutes of Technology were established.
• The target growth rate was 2.1% and the achieved growth rate was 3.6%.

Second Five Year Plan (1956-61)

• The Second Five year Plan stressed rapid industrialisation and the public sector.
• It was drafted and planned under the leadership of P.C Mahalanobis.
• It emphasised quick structural transformation.
• The government imposed tariffs on imports to protect domestic industries under this plan.
• The target growth rate was 4.5% and the actual growth rate was slightly less than expected, 4.27%.

Third Five Year Plan (1961-66)

• The focus was on agriculture and improvement in the production of wheat.
• States were entrusted with additional development responsibilities. Ex- States were made responsible for secondary and higher education.
• Panchayat elections were introduced to bring democracy to the grassroots level.
• The target growth rate was 5.6% and the actual growth rate only achieved 2.4%
• This indicated a miserable failure of the Third Plan, and the government had to declare “Plan Holidays” (1966-67, 1967-68, and 1968-69). The Sino-Indian War and the Indo-Pak War, which caused the Third Five Year Plan to fail, were the primary causes of the plan holidays.

• It was introduced under the Prime Ministership of Indira Gandhi and attempted to correct the previous failures.
• Based on Gadgil Formula, a great deal of emphasis was laid on growth with stability and progress towards self-reliance.
• The government nationalised 14 major Indian Banks and the Green Revolution boosted agriculture.
• The Drought Prone Area Programme was also launched.
• The target growth rate was 5.6%, but the actual growth rate was 3.3%.

• It laid stress on increasing employment and poverty alleviation (garibi hatao).
• In 1975, the Electricity Supply Act was amended, enabling the central government to enter into power generation and transmission.
• The Indian National Highway System was introduced.
• The Minimum Needs Programme introduced in the first year of this plan, aimed to provide basic minimum needs. MNP was prepared by D.P. Dhar.
• The target growth rate was 4.4% and the actual growth rate turned out to be 4.8%
• In 1978, the newly elected Morarji Desai government rejected this plan.

Rolling Plan (1978-80)

This was a period of instability. The Janata Party government rejected the fifth five-year Plan and introduced a new Sixth Five-Year Plan. This, in turn, was rejected by the Indian National Congress in 1980 upon Indira Gandhi’s re-election.

A rolling plan is one in which the effectiveness of the plan is evaluated annually and a new plan is created the following year based on this evaluation. As a result, throughout this plan, both the allocation and the targets are updated.

• It underlined the beginning of economic liberation by eliminating price controls.
• It was seen as the end of Nehruvian Socialism.
• To prevent overpopulation, family planning was introduced.
• On the recommendation of the Shivaraman Committee, the National Bank for Agriculture and Rural Development was established.
• The target growth rate was 5.2% and the actual growth rate was 5.7%, implying that it was a success.

• This plan was led by the Prime Ministership of Rajiv Gandhi.
• It laid stress on improving Industrial productivity levels through the use of technology.
• Other objectives included increasing economic productivity, increasing the production of food grains and generating employment by providing Social Justice.
• The outcome of the Sixth Five-Year Plan provided a robust base for the success of the seventh five-year plan.
• It emphasised anti-poverty programmes, the use of modern technology, and the need to make India an independent economy.
• It focused on attaining prerequisites for self-sustained growth by 2000.
• The target growth rate was 5.0%. However, the actual growth rate grew to reach 6.01%

Annual Plans (1990-92)

The Eight Five Year Plan was not introduced in 1990 and the following years 1990-91 and 1991-92 were treated as Annual Plans. This was largely because of the economic instability. India faced a crisis of foreign exchange reserves during this time. Liberalisation, Privatisation, Globalisation (LPG) was introduced in India to grapple with the problem of the economy under prime minister P.V Narasimha Rao.

• The Eighth Plan promoted the modernisation of Industries.
• India became a member of the World Trade Organisation on 1 January 1995.
• The goals were to control population growth, reduce poverty, generate employment, strengthen the development of infrastructure, manage tourism, focus on human resource development etc.
• It also laid emphasis on involving the Panchayats and Nagar Palikas through decentralisation.
• The target growth rate was 5.6% but the actual growth rate was an incredible 6.8%.

• It marked India’s fifty years since Independence and Atal Bihari Vajpayee led the prime ministership.
• It offered support for social spheres to achieve complete elimination of poverty and witnessed the joint efforts of public and private sectors in guaranteeing economic development.
• The focus was also to balance the relationship between rapid growth and the quality of life for the people.
• The objectives, further included, empowering socially disadvantaged classes, developing self-reliance and primary education for all children in the country.
• Strategies included enhancing the high rate of export to gain self-reliance, efficient use of scarce resources for rapid growth etc.
• The target growth rate was estimated at 7.1% but its actual growth rate fell shorter to 6.8%

• The features of this plan were to promote inclusive growth and equitable development.
• It intended for an 8% GDP growth per year.
• It aimed at reducing the poverty by half and creating employment for 80million people. Further, it aimed to reduce regional inequalities.
• It also emphasised reducing the gender gaps in the field of education and wage rates by 2007.
• The target growth rate was 8.1% while the actual growth was 7.6%.

• The Eleventh Plan was significant in its aim to increase enrolment in higher education and focused on distant education as well as IT institutes. Ex: The Right to Education Act was introduced in 2009, and came into effect in 2010, making education free and compulsory for children aged between 6-14 years.
• Its main theme was rapid and more inclusive growth.
• It is aimed at environmental sustainability and reduction in gender inequality.
• C.Rangarajan prepared the Eleventh Five Year Plan.
• The focus was also laid on providing clean drinking water for all by 2009.
• The target rate was 9% and the actual growth rate was 8%.

• The last Five Year Plan had “Faster, More Inclusive and Sustainable Growth” as its theme.
• The plan aimed at strengthening infrastructure projects, and providing electricity supply in all villages.
• It also aimed at removing the gender and social gap in admissions at school and improved access to higher education.
• Further, it aspired to enhance the green cover by 1 million hectares each year and to create new opportunities in the non-farming sector.
• The target growth rate was 9% but in 2012, National Development Council approved a growth rate of 8% for this twelfth plan.