Department of Management Studies

Presented By:
Geetanjali
Chaturvedi Garima
Singhal Harish
Gupta
 Presentation Structure
 What is Planning?
 What does planning do?
 Nutshell view of the plans
 Objectives of Plans
 Objectives of individual plans
 Strategies Involved
 Financing of plans
 What is Planning?
Planning is a set of choices or decisions regarding
allocation of alternative resources available according
to a well defined set of goals and objectives by some
central authority over a specified period of time
 What does planning do?

 Brings economic growth and development

 Increase in capital formation
 Social justice
 Price stability
 Five-year plans of India
For the smooth functioning of any economy, planning
plays an important role. The Planning Commission
has been entrusted with the responsibility of the
creation, development and execution of India's five
year plans. India's five year plans are also supervised
by the Planning commission
 Nutshell view of the plans
PLAN PERIOD HIGHLIGHTS
1st 1951-1956 5 IITs came into existence by the end of the plan
2nd 1956-1961 Focus on heavy industry
3rd 1961-1966 Sino-Indian war shifted priority to price stability
4th 1969-1974 Self reliance
5th 1974-1979 Stress on employment and poverty
6th 1980-1985 Janata government plan
7th 1985-1990 Congress party came back to power
8th 1992-1997 Modernization of industries
9th 1997-2002 Price stability
10th 2002-2007 Development more social
11th 2007-2012 Inclusive growth
 Objectives of Plans
 Growth of economy
 Objectives of Plans…
 Modernization-
 industries contribution larger in proportion
 production of large variety of goods
 advancement of technology
 financial institutions
 Self reliance-
 elimination of dependence on foreign aid
 elimination of dependence on imports
 Objectives of Plans…
 Social Justice-
 improving living standards of weaker
 reduction in inequalities of asset distribution
 reduction in regional/state inequalities
 Objectives of individual plans
 First plan –
 Improve living standards of people
 Fuller utilization of idle manpower
 Change in occupational pattern
 Reorient the educational system
 Second plan –
 Increase in national income by about 25 per
cent over the five years
 Enlarge employment opportunities
 Enlargement of heavy industries
 Objectives of individual plans…
 Third plan –
 Increase in NI
 Increase agriculture productions
 Expansion of basic industries
 Expansion of employment
 Even distribution of economic power
 Fourth plan –
 Reform government expenditures
 Facilitate growth in exports
 Objectives of individual plans…
 Fifth plan –
 Employment
 Poverty alleviation
 Sixth plan –
 Rapid industrial development
 Expansion of tourism
 Beginning of economic liberalization
 Expansion of family planning
 Objectives of individual plans…
 Seventh plan –
 Growth in food grain production
 Increase employment opportunities
 Raise productivity
 Eighth plan –
 Modernization of industries
 Poverty reduction
 Strengthening the infrastructure
 Human resource development
 Objectives of individual plans
 Ninth plan –
 Priority to agriculture development
 Providing basic services
 Empowerment of women and socially
disadvantaged groups
 Tenth plan –
 Reduction of poverty ratio
 School education
 Increase in literacy rates
 Villages with basic amenities
 Objectives of individual plans
 Eleventh plan –
 Accelerate gdp growth rate
 Reduce drop out rates in elementary
schooling
 Better environment
 Good infrastructure with proper connectivity
of roads
 Strategies Involved
 Mahalanobis Model –
 determine the optimal allocation of
investment between productive sectors in
order to maximize long-run economic growth
 Wage good Model –
 Resources not available for consumer goods
 Cottage industries development
 Industrial policy Model –
 reduced the industrial licensing requirements
 removed restrictions on investment and
expansion
 Strategies Involved…
 Price Policy–
 Constitutes fiscal and monetary components
 Panchayati Raj–
 Preparation of plan for economic
development and social justice
 To levy, collect and appropriate taxes,
duties, tolls and fees
 Productive Employment–
 Increase of amenities to lower farmers
 Rural development more effective
 Strategies Involved…
 Foreign trade Policy–
 derive the maximum advantage from world
markets
 opening up of the economy to international
competition
 Equity and social justice strategy–
 Agriculture development is the core element
 Improved efficiency capacity utilization–
 Emphasis on completion of partial or
ongoing projects
 Financing of Plans

Finances are contributed from different sources namely-

 Balance from current revenue

 Surplus of public enterprises
 Capital receipts
 Deficit financing
 External resources
 Financing of Plans…
Plan Current Public Capital Deficit External Total
revenue enterprise receipts financing resources
1st 32.5 5.8 35.0 17.0 9.6 1,960

2nd 22.7 3.6 30.0 20.4 22.5 4,672

3rd 28.8 5.1 24.6 13.2 28.3 8,577

4th 25.0 8.8 40.5 12.8 12.9 16,160

5th 41.6 6.3 30.5 8.6 12.8 40,712

6th 19.8 16.8 41.4 14.1 7.7 1,10,821

7th 2.0 16.4 56.7 15.3 9.2 1,78.570

8th -10.4 34.5 63.1 8.7 5.5 3,80,524

9th -0.1 39.6 53.5 0 6.9 8,59,200

10th 1.3 37.6 59.4 - 1.7 15,92,300

 Financing of Plans…

 Balance from current revenues–

 Key significant source
 Involves no liabilities
 Performance highly unsatisfactory

 Surpluses of public enterprises–

 Low contributions
 From this angle, planning has been a failure
 Financing of Plans…
 Capital receipts–
 Comprises of market borrowing, small
savings, provident funds, loans etc
 Fruitful if use kept in limits and resources
invested in productive enterprise
 Not the case though
 External resources–
 Contributed a lot in augmenting domestic
 Recently country in heavy debt due to this
 Financing of Plans…
 Deficit financing–
 Share of deficit financing in total has been
considerable
 It can do some good if in small doses
 Discontinued from April 1997
Thank You!!