Babita, Gaurav,Bhaskar,

Presented by:-
Bhuwanehswar,
Durgesh, Deepak
• Planning may be defined as deciding in
advance what is to be done in future. It
is the process of thinking before doing.
Definition :-
• According to Henry fayol, “planning is
deciding the best alternatives among
others to perform different
managerial operations in order to
achieve the pre-determined goals
• The government has to prepare and
implement a comprehensive economic plan
integrating the private sector with the
public sector. It is for these reasons that we
have been having economic planning since
1951 when the first five year plan was
launched.
Definition:-
• According to Dickinson, “economic
planning is the making of all major
economic decisions by conscious decisions of
comprehensive survey of the economic
system as a whole.”
• Targets
• Time schedule
• Resource limits
• Objectives
• Overall planning
• Undivided authority
• Increase in National Income
• Full Employment
• Reduction in Inequalities of Income
and Capital
• Social Justice
• Other Objectives:-
Removal of poverty, expansion of
industries,improve the economic
standard of the people.
• The two major agencies which are
responsible for economic planning in India
are the Planning Commission and the
National Development Council
Planning Commission:
Set up in March 1950 and has the following
functions:
• To formulate a plan for the most effective
and balanced utilization of the country’s
resources
• India is a federal state and the Centre gives
money to the States. The Planning
Commission serves as an intermediary for
the allocation of funds to the States.
Main Funtions
-To prescribe guidelines for the formulation of
the National Plan.
-To consider the National Plan as formulated
by the Planning Commission
-To periodically review the working of the
Plan.
-In addition every State has its own Planning
Board.
The Prime Minister is the Chairman of
the Planning Commission, which works
under the overall guidance of the
National Development Council.
 Mr. Montex singh
Aahuwaliya
Deputy Chairman

Shri. MV
Rajshekharan

Member Member

Dr. Kirit Parikh

Prof. Abhijit Sen

Dr. VL Chopra

Syeda Saiyidain
Hameed

Dr. Bhalchandra
Mungekar
 Shri. B.K.
Chaturvedi

Shri. B.N.
Yugandhar
- The First Five Year Plan was launched in 1951. The
process of implementation of the Five Year Plans was
disrupted in 1966 and the Fourth Five Year Plan was
put off by three years due to the severe drought in the
country and aggressions from China and Pakistan.

-The intervention period between the Third and Fourth

Five Year Plans had annual Plans. This period is
referred to as Plan Holiday.

-On assuming power in 1977, the Janata Government

introduced the Five Year Plan (1978-83) and
introduced the concept of Rolling Plan. Under the
rolling plan, when one year lapses another year is
added to the planning horizon so that there is always a
five year plan. On coming to power in 1980, the
Congress Government terminated the Plan and
formulated the Sixth Plan 1980-85
The First Five Year Plan (1951-56):
• The immediate objective of this plan was
rehabilitation of refugees, rapid agricultural growth
and control of inflation.
• These objectives were by and large achieved. The
production targets in the agricultural sector were
more or less fulfilled largely due to favorable climate.

The Second Five Year Plan (1956-61):

• The Second Plan aimed at rapid industrialization
with emphasis on the development of basic and
heavy industries such as iron and steel, heavy
engineering. The Industrial Policy was formulated in
1956.
• The target of this plan could not be achieved due to
shortage of foreign exchange and rising prices.
The Third Five Year Plan (1961-66):
• This Plan aimed at the establishment of a self reliant and
self generating economy.
• High priority was assigned to the agricultural sector and
development of heavy industries. However, the approach
had to be shifted to defence due to conflicts with China
(1962) and Pakistan(1965).

The Fourth Five Year Plan (1969-74):

• This Plan had the objectives of growth with stability and
progressive achievement of self reliance.
• It was successful during the first two years. But it was hit
by monsoon failure, power shortage and inflation in the
remaining years.

.
 The Fifth Five Year Plan (1974-79):
Removal of poverty and self reliance were the main
objectives.
• It was drafted in late 1973 when crude oil prices
were rising rapidly.
• The plan was subsequently approved in late 1976 but
was terminated at the end of 1977.
• The fifth plan was in effect only one year.
 The Sixth Five Year Plan(1980-84):
• There were two Sixth Plans.
• One by the Janata Government and the other by the
Congress Government in 1980.
• The objective was removal of poverty. Broadly
speaking this plan was a success
The Seventh Five Year Plan (1985-90):
This aimed at accelerating the growth in food grains
production, increasing employment and raising
productivity.
Gap between(1989-1991)-
1989-91 was a period of political instability in India
and hence no five year plan was implemented.
Between 1990 and 1992, there were only Annual
Plans.
The Eighth Five Year Plan (1992-97):
• The Eighth Five Year Plan was introduced at a time
when there was a severe economic crisis due to
balance of payment crisis.
• The Government introduced economic & fiscal
reforms to provide a new dynamism to the country.
• This Plan laid emphasis on infrastructure
development, poverty alleviation, employment
generation, population control and health and
drinking water for all.
• The Ninth Five Year Plan (1997-2002): This plan
aimed at quality of life, generation of productive
employment, regional balance and self reliance. The
focus of this plan was on “Growth with Social Justice
and Equality”.
The Tenth Five Year Plan (2002-07):
• This Plan was introduced in April 2002.
• The Plan was launched when there were both positive
and negative features.
• Positive being, GDP growth rate was at 6.5% p.a.
Population growth had declined to less than 2%.
Percentage of people below the poverty line was
decreasing.
• Literacy rate increased to 65% in 2001. Software and
IT Services emerged as new sectors of strength.
• Negatives were that growth had generated less than
expected employment.
• The infant mortality rate had stagnated and there was
acute shortage of drinking water.
 A major advantage in formulating the 11th. Plan is that
India’s economic fundamentals have improved enormously
and we now have the capacity to make a decisive impact on
the quality of life, especially on the poor and marginalized.

• The objective of the Plan is “Towards faster and more

inclusive growth”.
• The 11th Plan aims to increase the average economic growth
to nine per cent from 7.6 per cent in the Tenth Plan.
• The 11th Plan also proposes to increase farm sector growth
rate to four per cent from 2.13 per cent in the previous Plan.
• The Plan, which has been formulated with the aim of
making economic growth more inclusive, proposes to reduce
poverty by ten percentage points
• This Plan aims to generate seven crore new employment
opportunities and reduce unemployment among educated
persons to less than five per cent.
• Extend access to essential public services such as health,
education, clean drinking water and sanitation.
 .
• The Plan will also focus on the education sector
by increasing the outlay to 19 per cent of the
Central budgetary support from less than eight
per cent in the previous Plan.
• Literacy rate to be increased to 85% and the
gender gap in literacy to be reduced to 10
percentage points.
• Create an enabling environment for the socio,
political and economic empowerment of women.
• Protection of the environment. Forest cover to be
increased by 5 percentage points and essential
requirement to clean up our rivers.
• Pay special attention to the needs and
requirements of the SC / STs and other excluded
groups and bring them on par with the rest of
the society.
• Growth of National and Per Capita Income:
There has been an increase in both but not to the
extent the planners expected. NY increased by
nearly 6.4 times.
• Growth in Employment: There has been
considerable increase in employment opportunities
during the Plans. But these proved inadequate. Slow
growth in agriculture and industry, the
concentration of investment in the capital goods
industries have been responsible for the failure to
meet the needs of the rising labor force.
• Distributive Justice: The role of Zamindars has
been considerably reduced. However there have
been no material change in the distribution of
income or wealth in rural India. In the industrial
sector too the economic power of the large business
houses has been increasing. Much still remains to
be done.
• Self-reliance: Considerable progress has
been made towards the achievement of this
goals but a sizeable portion(10%) of our
development expenditure comes from
foreign sources. Moreover the central
objective of self-reliance now is not self
sufficiency but international
competitiveness.
• Industrial Progress: A major
accomplishment has been the
diversification of industries and expansion
of industrial capacity. The country is self
sufficient in consumer goods. The growth
of capital production has been quite
impressive.
 Growth performance in the five year plan
(percent per
annum)
Target Actual

1)First plan(1951-56) 2.1 3.61

2)Second plan(1956-61) 4.5 4.27

3)Third plan(1961-66) 5.6 2.84

4)Fourth plan(1969-74) 5.7 3.30

5)Fifth plan(1974-79) 4.4 4.80

6)Sixth plan(1980-85) 5.2 5.66

7)Seventh plan(1985-90) 5.0 6.01

8)Eight plan(1992-97) 5.6 6.78

9)Ninth plan(1997-02) 6.5 5.4
10)Tenth plan(2002-07) 8.0 -
Target GDP growth rate in 11th 7.0% 8.0% 9.0%
plan

Average investment rate 29.1 32.0 35.1

Average CAD at % of GDP 2.0 2.4 2.8

Domestic savings rate: of which 27.1 29.6 32.3

a) household 20.1 20.5 21.0

b)corporate 5.0 5.5 6.1

C)PSEs 3.1 3.1 2.8

d)Government -1.1 0.5 2.4

• Rivalries of state
• Neglect of private sector
• Political set up of the country
• Too much emphasis on public sector
• Lack of preparation
• Dependence on foreign collaboration
• No consideration for rising prices
• Unrealistic plan
• Low priority to industry
• Lack of Co-ordination
• On the bases of facts and figures Economic
Planning is very important for every country.
Because of excellent economic planning now we
are one of the parts of developing countries. On
the bases of need in certain sectors government
introduced five years plan for better
development. Now India’s GDP growth is very
high as compare with other countries and that
is because of better planning. After introduced
1991 policy the growth of India became very
faster because of liberalization and licensing in
different sectors. Because of liberalization the
rate Foreign Direct Investment increased after
1991.
•