State Economy and Development1956-61 1961-66 Fourth Five Year Plan 1969-74 Self bufticieaay inifoed), self sufficiency in economy Self-reliance and sustained growth Fifth Five Year Plan 1974-79 Removal of poverty Sixth Five Year Plan 1980-85 | Improvement in infrastructure in agriculture and industry. Seventh Five Year Plan 1985-90 | Modernisation and increase in cmployment opportunities. ‘Eighth Five Year Plan 1992-97 | Human resource development Ninth Five Year Plan 1997-02 2002-07 Eleventh Five Year Plan 2007-12 2012-17 (hein Five Year PlanPlanning in India * > Planned economic development in India began in 1951 with the inception of + First Five-year plan + & But the efforts for this were started even before independence, + ¥ In 1934, Sir M. Vishweshwaraiah formulated a ten-year plan for economic development of the country in his book “Planned Economy for India”. He is known as Father of Indian Economic Planning + ¥ National Planning Committee (1938)- Setup by Subhash Chandra Bose in Congress , under thé chairmanship of Jawaharlal Nehru + ¥ The Bombay Plan (1944) —By Purshottamdas Thakurdas, Tata, Birla, Ardeshir Dalal, Lala Shri Ram, Kasturbhai Lalbhai , Ardeshir Darabshaw Shroff, and John Mathai. It was based on idea of import Substitution Industrialization (ISI).ai # fereiiera afte feeprear st epesia 1951 A Reachr carser a +3 Saad aera + > afer gem fav were aroma B aga & ee ae fae reg, » fal S34 7, fares ait cea gear 5, Sle heat A lad er len See A Se ard felaistel I let HET Sila Bl Tee rn mgr omy aerate + va wid capt (1944) - Cae eer Pi ate gt = at a, ihe SH gant] ae sara Tania wiereanaer Sleaitatterror (ist)¥ Gandhian Plan (1944) - Sriman Narayan Agarwal v People’s Plan (1945) —M.N Roy ¥ Sarvodaya Plan (1950)- Jaiprakash Narayan ® Five Year plans (FYPs) are centralized and Integrated national economic programs. India adopted this from Soviet Union. > After Independence, India Launched its first FYP in 1951, under socialist influence of first PM Jawaharlal Nehru. > The process began with setting up of planning commission in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunity to all for employment in the service of the community. > The Planning Commission was charged with the responsibility of Making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most efficient and balanced utilisation of the resources, and determining priorities.+ vo mitiarat ator (1944) - AtAeT ARTICT STAT «ov Sigeg vale (1945) - vaca va + ¥ Balew wrote (1950)- Searer ATeTaUT “EERE RTY Saas eo whe eto Bae # + pee a, He a Poet a sar 1, ure aa re ale eee BaArstardy vara eee RoW oR ETL ‘ESBS LL eaeFirst Five-Year Plan (1951-1956) Theme — Agricultural Develanment ¢ Plan was based on the Harrod-Domer Model # Indian was facing basic problems like deficiency of capital and low capacity to save. influx of Refugees, Severe food shortage & maunting inflation Tame Growin Rate ~ 2% (907) ‘@ Achieved Growth Rate — 3.6% (GDP) + dm - of fort «+ Wore EVS-SAT Fifer Te Seniesa iid BSE SS BE ES HT oer ee aT > sear geht or - 2.1% (seem & pita Ware ay - 3.6% (srg) SyARPe reps ste or Frater, ter srfarge ate Feeateenere arqerer sree st FUE Ren ea 8 HOR eee err UR A as]Second Five-Year Plan (1956-61) + @ Theme- Import Substitution led growth, heavy & Basic Industries ‘+ @ Mahalanobis Madel developed by Indian Statistician Prasanta Chandra Mahalanabis in 1953, ¢ Establishment of Socialist pattern of society and the goal of ecanomic Policy. 4 Plan assumed a close economy in which the main trading activity would be centred on importing Capital goods. Steel Plant in Bhilai, Qurgapur and Rourkela, and Tata Institute of Fundamental research was setup. * © Target growth rate- 4.5% © Actual growth rate —4.27% @ ha grera sfc & stqea A Tesre, argh athe qferardh sector % 1953 4 amedre aifeerhfad serie cig were gare feta aerereiferer atset! warTat 4 wasted? viewer ft Sage wd srfeles otf ar wea) TET PRE RS aT SFR ge rae ere 2 Bay SEP 0 sear A eats cate aie crer geaeag site wertee Re A & am qefe ar 4.5% ® areafaa ferprer a - 4.27%Third Five-Year Plan (1961-66) + target erowth rate—5.6%8 + actual grawth rate 24% + Palitical Decentrallatiaa and Economic decentralization wasinitiated. + 9-H plan was through allure in veaching target duet unforesaen events: + ¥ Chinese Auaression (2962) + ¥ indo.rak war (1988) + ¥ Severe Drought (1965-66) + due to conttet the approach uring ater phase of plan vas site om sevelopment to defence & development +e Mie aie zea +e mew ach a - 5.0% + & meaty fear at - 2.4% + = arafier Fetighencr afte anf Faaheneer AY eran 1 +9 Sian Senta wena aT REM oe ae A Seer rT at: sv diafy sar (1952) + 4 indo IE (1965) + sishe ent (1968-66) 24 Sa 5 are Stee are eer ahs Tee at eee en ote fear A pate a ea aThree Annual Plan (1966-69) * & Due to miserable failure of the Third Plan the government was forced to declare plan holiday, * & Three annual plans were drawn during this intervening period. * Fourth Five-Year Plan (1969-74) + & Theme- Technological Reforms in Agriculture, growth with stability, * & Presented by Indira Gandhi. + Nationalization of 14 Banks and Green Revolution was introduced. + © Target growth rate — 5.6% * & Actual growth rate — 3.3% * © Indo-Pak War of 1971 and formation of Bangladesh.++ deat aster fauna 3 BROT BEX HY Alster pane Seer Se Fstae Ble TST, + so dra A Haley & dha alter atoet aang aE Stet ehreffar atts (1969-74) +@ oe pe A ceelhr ge, fear & are faare + & Seu ae care vega Peer wer 1% 14 dat an oedaager sty efta wife é eae Hr aE +% ceT gait ar - 5.6% + aieatae Rare ax - 3.3% + 1971 aT sita-are Zeer sitet steerer HT aoe!Fifth Five-Year Plan (1974-79) @ Theme- Employment and Elimination of Poverty > Target growth rate — 4.4% Actual growth rate 4.8% ® Due to high inflation, cost calculation for the plan proved to be completelywrong and the original public sector outlay had to be revised upwards. © after the promulgation of Emergency In 1975 » the emphasis shifted to the implementation of Prime Minister 20 Point Programme. 4 Five-Year Plan was relegated to the background and when Janta Party came to Power in 1978, the plan was terminated. Rolling Plan (1978-1980) @ The Janata Party introduced the Sixth Five Year Plan and rejected the previous plan. & However, the government lasted for only two years. Congress government returned to the power in 1980 and launched a different plan aimed at directly attacking on the problem of poverty by creating conditions of an expanding economySHARPER EG) Bape Re se $Y ae GB se ort ar gf ate pe ade: ar ear at © 1975 a srarepever ot citer as ag, wher ait 20 epltar erdhmes ab erraermer ow cate AT aT] fits ater a reg Hee fear ren te ote 197s A ome eh aT a ot Att HOEY a A statin atarer (1978-1980) © rere ard at end cerentfar atone ster ay ate feed tora at nftor ane feat © erent, ereare Sites at ara A TR @ sits gun 1980 4 ger # até afte es seer aioe Fear thorn sere adh A aereet we Ath gore ed sade a vee freufea ariewrem A actSixth Five-Year Plan (1980-85) + © Theme: Foot & Fuel EMfiiency +o igor gown rate 5.2% + © Actuolgrowth rave = 5.4% + this was the end of Nekrovian Seca. + 4 Marked the besinning of economic liberalism, Price contral were eliminated and ration hans were clased. + Seventh Five-Year Plan (2985-90) + © Theme. Food, work & Productivity + $ Tomer growth rate —5.05 + Actuolgrawth rote 601% +g she. ure atte Sarr ete + 9 mea gait aq - 5.2% +o creel Rema Ge = 5.4% + @ ag Ageondt ermomma a Set tt soe Smee serene rapes wt Peer Rea ape aetee cme ae fear orange er et oS + xrréh devant hare (1985-90) soe she shoe ar aft SEAT + © wea gaff cx - 5.0% + © arenfte: fara a - 6.01%Annual Plans (1990-92) * % Eighth plan could not take off in 1990 due to the fast changing political situation at the centre. + @ Eighth plan was finally launched in 1992. + Eighth Five-Year Plan (1992-97) + & Theme- Privatisation, liberalisation & Globalisation * © Target growth rate — 5.6% * % Actual growth rate — 6.78% + & Lunch of India’s free market reforms. * ¢ The New Economic Policy is the core behind this plan.2 Se | Mromitisin eater a srqor 1990 3 anadt + & aitedl atsien aicet: 1992 HF epe A aS eM + Hedl Gaadier atstar (1992-97) + ar Prefer, sarracor sit dediercr +@ cer daft at - 5.6% + apaian ane a - 6.78% +% 8d & Aad arene wT aloee aT Slstet! + © o& arte sfia sa a oe Aer 1Ninth Five-Year Plan (1997-2002) + & Theme- Growth with Social Justice & Equality + & Target growth rate — 6.5% + % Actual growth rate — 5.4% + Objective of Population control, reduction of poverty, generating employment, primary education to all, Primary health care. + Tenth Five-Year Plan (2002-07) + & Theme- Growth with Social Justice & Equality © Target growth rate - 8.0% + % Actual growth rate — 7.6% + Plan declared governance as factor of development & agriculture was + declared as prime moving force of the economy. + & Presented by NDA government- Atal Bihari Vajpayee.© ofa. aenfos carer Sy wate & arr faa © mer qefit ax - 6.5% © arraie freer at - 5.4% FEEL RSS) ANY ree tee art, ea are Re, eA aadt ceaiizy ata (2002-07) ata craic sare ait qatar & are Fees ® wea qefa ax - 8.0% © arpafer (ae ar - 7.6% @ aise eter areer are ak pe oer aren eT adcaceer ff wpe aidan vita a wr af ates Pra ae wate WHR CENT Sede Hee fae aterEleventh Five-Year Plan (2007-12) + © Theme: Faster, broad base Inclusive Development + target growth rate—8.0% + actualgrawth rate— 7.9% + UPA presonted it with fs electoral promizes of helaing am Aadami (Common Kian) ‘+ “Twalfth Flve-Year Plan (2032-2017) + theme: Fastes, Sustainable, mare inclusive growth © Target growth rate ~ 8.0% Sirmlar to Eleventh Plan in its strategy © Stopped by Mod! Gavernnaant in 2035 by ersping Planning Commission + ili Aayoe mas established fora Bottom ta Too Approach af Paarings oti. aa, ramen stay pore Fare + SET TEM aT 90% co mngciine Rrra gt - 7.9% ape ee Se ert et ae ee a ot ae er eT arpa craven ahem (2012-2017) 3 the. 8a, Tas, SRR aah foe 4 aT EM ar - 0% nett ceria at saree stron de ane @ ahdt wrere # 2018 5 attra acter a oes er eT se ase ay atch ae oe ob eitearter a te AS aan ot were ng ehAchievements of Planning in India * 1. India became food sufficient Country + 2. Technical Upgradation of agriculture Sector * 3. Steady change in the composition of national income with higher share of national income originating in the manufacturing sector. * 4. The growth rate of export is increased. * 5, Decline in Poverty, Phases of Planning in India Phase | (1951-65 ) Objective of Having Growth oriented Development & Import Substututing industrisation strategy Phase Il (1966-80) Objective of having grwoth & welfare & Equity Oriented Development Strategy Phase III (1991-till date) objective of having growth with social justice & Export led Growth Strategy + 6, The process of Industrialisation of the country specially establishment of Heavy Industries started only through Planning. + 7. Now, India is among the largest economies of the world+1. Se Gest wales Ser set war 22 BR a a gore See +3. arg SP) gaer at Aber ahaa, faferster ata A Scarce thet +4, fate oAt_gafe ax a geht gS 81 . wae ee ea a See a 194 ae . oe! faa eu 8 one seehait AY eer +7, 3a, stat aferar Fr aa ators AA ee 2Failure of Economic Planning * 1. Uneven growth of different sector 3. Balance of Payment crisis in 1991 — . Inflation * 4. More than 360 million Indian Population is still Below Poverty Line. — 5. Wide gender Disparity = * 6. Inequality in distribution of Wealth & Income. * 7. Low Capital formation a * 8. Unemployment a * 9. Failed to control Population Vo * 10.Inferior development of Infrastructure. * 11.Inefficient Health Infrastructure 12.|Inefficient Administrationfattest art ft arrart gafer 1991 aT azarenet tine aT Herat FgITs 360 fae & arferes anecita cereecar arafr aft whet Gar & areal 81 came asta srearetat Get ait ara & faecor A aaa aa oir Taster are ONDHbONS +9. cernear ferdaer A ener +10, saree er fara fre] < 11. 3am Fares car +12. HA WetNew Economic Policy a * Pre-1991 economic scenario in India: * @ Indian economic policy after independence was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure to. fabiansecialism. 7. Nehru, and other leaders of the independent India, sought an alternative to the * extreme variations of capitalism and socialism. * @ In this system, India would be a socialist society with a strong public sector but also with private property and democraqwo——— * @ As part of it, India adopted a centralised planning approach. + @ Policy tended towards protectionism, with a strong emphasis on import substitution, industrialisation under state monitoring, state intervention at the micro level in all businesses especially in labour and financial markets, a large public sector, business regulation.+ una 4 1991 & vee a anftter oieees: “AS Sid Sy ge POPE SY SWE on +0 age sit Sada ae H See act @ sec fae Haier fy + Coit at warsiare & acer Sorat] - SSF A ara ee Fagg ardaiee ay are ww waTsTaTa WaT + feteit date ste atacda & are sft Ramer 25 ane at wn chet Aes 2 Gon Par aaa arte eeerawbacks of Pre-1991 economic policy: s#Licence raj: The “Licence Raj” or “Permit Raj” was the elaborate system of licences, regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 199 Mport substitution: Import substitution industrialization (ISI) is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products and was intended to promote self reliance. But this meant the monopoly of indian industries and lack of incentive for them to improve the quality of products which hampered consumer interests.: "ASHH West" Ur "wee Wet" 1947 3X 1990 & a a exeata ears wet Hn weet & fav sea ‘ater aft oe &r feeqa worretr eff) (st) ee ca1991 economic crisis: * @ By 1985, India had started having balance of payments problems. This is due to more expenditure by the government whereas the income generated was less. In addition there was huge disparities between income and expenditure. sf By the end of 1990, it was in a serious economic crisis. The government was close to default, its central bank had refused new credit. + © 1)A991, India met with an economic crisis - relating to external debt. The ernment was not able to make repayments on its borrowings from broad. @ The foreign exchange reserves, which we maintain to import petroleum and other important items, dropped to levels that were not sufficient to last even a fortnight. @ The crisis was further compounded by rising prices of essential goods.i Eee ea "flea a Th Seas Re ee a ee ear “Ee aya ea Se See “e i fer, aie iS a sare sere Be ea aa AE Ha ot ew GE +e sneeam aeqat Ar gedit Ararat A tHe BN aft se FTIAdvent of IMF and World Bank: * @ India approached the International Bank for Reconstruction and Development(IBRD), commonly known as World Bank and the International Monetary Fund(IMF) for help. ¢ India received 7 billion dollars as loan from these agencies to solve the crisis. + @ It had to pledge 20 tonnes of gold to Union Bank of Switzerland and 47 tonnes to Bank of England as part of the deal with the International Monetary Fund(IMF) ° e In addition, as part of the bailout, IMF expected India to liberalise and open up the economy and remove trade restrictions between India and other countries. * Bae See ae a rer © SW asa er a gh ee ee * game & waren & fore ae at get weifhal & ager a wT A 7 aa Store Ee ee a ee SS ee Se RST SS A Se ale Fee _Stabilisation measures: * @ These are short term measures aimed at solving the immediate cause of the 1991 economic crisis. * @ These included correcting the weakness which resulted in the balance of payments crisis and steps to bring the inflation under rol. Structural measures: © @ These are long term measures aimed at improving the efficiency of the economy and increasing its international competitiveness by removing the rigidities in various segments of the indian economy. e reforms fall under three leads: iberalisation °2. vatisation . Globalisation+ $31 1991 SAGE Hee & areas are a eo HET & scceT a —. TR EW ae Saree : See sar State gh eae a EE ALiberalisation: * Liberalisation was done in various sectors in the following ways: 3%. Deregulation of industrial sectors : Ne Industrial licensing was abolished for all but product categories - alcohol,cigarettes, hazardous chemicals, drugs, explosives etc., * @ Many industries which are reserved for public sector in have now been “dereserved”. Only railways, defence equipment, atomic power generation have been reserved with the public sector. Cs ® Market has been allowed to determine the prices. * 2. Financial sector reforms : NL. e Red the role of RBI from regulator to facilitator of financial se f Ee! These reforms led to the establishment of private banks.@ FDI in banks was raised to 50%. @ But certain managerial aspects have been retained with the RBI, to safeguard the interests of the account holders. * 3. Tax reforms: i: @ Corporate tax, which was very high earlier has been gradually reduced. + @ The tax procedyeé@s have been simplified and the rates also have been lowered. * 1973-74 ven tax slabs, with rates from 10 to 85 per cent. — * 1990-91 - In five Budgets between 1991-96, FM Manmohan Singh redyces wt slabs * to three (20, 30 and 40 per cent) > *e acrt A roi sr weree 50% AT fear ae! TSE ELAS Oe ee et +3. 2e Sane bee, ot get age after on, er-ee aa fear ara #1 +g) Sees wT aoT Serer ara SAL ath wT a aH Fea ara + 1973-74 - Tange wt Feta, 10 S 85 “ieee A at & are + 990-914 1991-96 & ats sta aoe Hi, feet erat aeraitger Pie + ® diet (20, “30 atte 40 wfergre)|‘oreign exchange reforms: The rupee was “devalued” against fareign currencies which led to an increase in inflaw of foreign exchange Market has been allowed to determine the foreign exchange rates. —__ —=£__——— 5. Trade and investment policy reforms, 4. eee mee Dismantling of quantitative restrictions on imports. Regyeffon of tariff rates(taxes on imports) emoval of licensing pracedures far imports except in case of hazardous and enviranmentally sensitive products Quanti tive restriction on imports was also fully decreased later. Export duties have been removed to promote exports. . Tergelt afer Were: facet Aes & aera To ae “aaa” fee aren, Frere feat qat cae A qafer wl areit > faeelh fates ax freiita axe At Hepsi yas 21 carer 3ite fetder after A gene : Sara ot rates ofedtit at earea stair titn at a mat (sea WAR) aes AN cea Sr eke A Aaa scoret Ht alsat Hen & Taw agate wisest Hr sere ae A sere Wt Aratens oferty aft Gh ae A wa ae ee wal frat at agra eat & Tere feta Yen get fea arar 21Privatisation: ® Privatisation means the transfer of assets from public sector to private sector. @ Privatisation helps in improving financial discipline and to facilitate modernisation. ———— + @ Privatisation helps in strang inflow of FDIs * @ Disinvestment : Privatisation of public sector enterprises by selling off part of the equity of PSEs to the public is called Disinvestment. * @ Criticism: * 1.Assets of PSUs has been undervalued. a 2.The money from disinvestments were diverted to meet the shortage i the government revenue rather than in creating new assets. *+ gfe er art & aofe arr arcafern ae & frei ate F * ae PR aR FSR are sie oretertenror ay +e foley wpgians & Acta yale A Hac axe & ” Sag asta aa AL Saag ea Se a, tt creas, ft defeat ar ae apart Pre aren #1 “SRR S Se EES, AT TT A* Globalisation: * e Globalisation: Globalisation is the process of international integration arising from the interchange of world views, products, ideas and mutual sharing, and other aspects of culture. <# Outsourcing: In Outsourcing, a company hires regular service from external sources, which was hitherto provided internally. It is an outcome of globalisation. Thanks to new economic policy, India became a major source for outsourcing jobs. Eg, BPO, banking services etc., World Trade Organisation(WTO): WTO was established to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purposes. India has been an active member of WTO, which aims to enlarge trade between coun+ dedterer: > g Seder. aetna fee & at, geval, rant ath area ait & cs "3 on Seas & Hea ued: BMereAt-Helet A Seed HAST gerry ae “SPS ae re § a oe eae va ITE ata Ft TT! 3, Bae Sar corer wang ar sghed fetes a a ogg ae te Sas EE ED a a ieJoin us on social Media EJ Join our Telegram - https://t.me/POLITYHOOD * pOLITYHOOD YOUTUBE LINK- https://youtube.com/channel/UCw7L9sylbXu3ROg60z7wehw & . Visit our website -https://polityhub.teachmint.in erent @ Email us- politynood@gmail.com e . CONTACT NUMBER-9708656639