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 Members Of Presentation

 Simranjit Kaur

 Vipul Jain

 Ishpreet Kaur Anand

 Ankur Deo
 Contents
 Economic Planning
 Introduction
 Need For Economic Planning
 Objective Of Economic Planning
 Planning Commission
 Introduction
 History
 Members of planning commission
 Five years plans
 Salient five features of plan
 Achievement of Indian economic plan
 Major failures of Indian economic plan
 Factors affecting successful implementation of plans
 Format Of Presentation
 Simranjit Kaur
Introduction
 Vipul Jain
Need For Economic Planning
Introduction
Objectives Of Economic Planning History
Members of planning commission

 Ishpreet Kaur Anand

Five years plan
 Ankur Deo
Salient five features of plan
Achievement of Indian economic plan
Major failures of Indian economic plan
Factors affecting successful
implementation of plans
 N NI NG
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 Introduction
 Economic planning is often regarded as technique of managing an
economy. When the structure of an economy becomes complex and
subject to rapid change and transformation (due to population
growth, discovery of resources, industrialization, etc.) some sort of
advance thinking becomes necessary to resolve that complexity
and to prepare the economy for those changes. Such preparation is
called planning.
 Most often that not an economic plan is regarded as a programme
of action. It may also be taken to mean an instrument for
regulating a free private enterprise economy. The regulatory
measures may vary from country to country.
 They may leave either too much or too little a degree of freedom to
private enterprise. This may hamper the working out of the plan.
Many plans leave their programmes incomplete because they
hesitate to exercise their regulatory functions. They are little more
than a list of public development projects.
 NEED FOR ECONOMIC PLANNING
 Weak private Sector:- In an underdeveloped country, private enterprise is
weak and may fail to take the necessary risks of pioneering those industries
which are necessary for rapid economic development of the country.
Therefore, the State must come to the forefront action. The underdeveloped
countries have remained almost stationary.
 Inequalities of Income:- Inequalities of income and wealth exist in
underdeveloped economies. Private enterprise system does not secure an
equal distribution of the benefits of economic development among different
classes of the community. The developing social conscience of the people
cannot tolerate the existence of such grave inequalities.
 Change in Attitude:- All underdeveloped countries have become
development-minded. Now they want to pack the development of centuries
into a few years. They like to raise the standard of living of their people.
Therefore, these countries require quick economic development.
 Structural Changes:- In an un-developed or under- developed country, the
main economic sector is predominantly agriculture. The secondary and tertiary
sector are substantially less developed. This results into structural dis-
equilibrium. Thus, for increasing the overall productivity, it is very essential
that optimum labour force be diverted and employed on secondary and
tertiary sectors of the economy. This is possible only by proper planning in
different sectors of the economy.
 Future Requirements:- In an attempt to maximize the current profit, the
producers exploit the natural resources without considering the future
requirement. Therefore, it is evident that if exhaustible natural resources are
not properly utilized, less will be available for future generations. To conserve
the natural resources carefully it is important to make and execute proper
plans.
 Foreign Aid:- In modern economic activities the progress of one nation is
related directly or indirectly to the progress of other nations. Thus, the detailed
plan, mentioning specific output projects and investment projects, is very
useful in creating favorable atmosphere for bilateral and multi-lateral
agreements of foreign aid. Thus, carefully designed plan outlay is essential for
increasing foreign trade and thereby improving development prospects.
 OBJECTIVE OF ECONOMIC PLANNING
 Economic Development:- The main objective of Indian planning is to achieve the goal of
economic development economic development is necessary for under developed countries
because they can solve the problems of general poverty, unemployment and backwardness
through it. Economic development is concerned with the increase in per capita income and
causes behind this increase. in order to calculate the economic development of a country,
we should take into consideration not only increase in its total production capacity and
consumption but also increase in its population Economic development refers to the raising
of the people from inhuman elements like poverty unemployment and ill heath etc.
 Increase Employment:- Another objective of the plans is better utilization of man power
resource and increasing employment opportunities. Measures have been taken to provide
employment to millions of people during plans. It is estimated that by the end of Tenth Plan
(2007) 39 crore people will be employed.
 Self-Sufficient:- It has been the objective of the plans that the country becomes self-
sufficient regarding food grains and industrial raw material like iron and steel etc, Also,
growth is to be self sustained for which rates of saving and investment are to be raised
With the completion of Third Plan, Indian economy has reached the take off stage of
development.
 Economic Stability:- Stability is as important as growth. It implies absence of frequent
and excessive occurrence of inflation and deflation. If the price level rises very high or falls
very low, many types of structural imbalances are created in the economy. Economic
stability has been one of the objectives of every Five year plan in India. Some rise in prices
is inevitable as a result of economic development, but it should not be out of proportions.
However, since the beginning of second plan, the prices
 ON O F
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 Introduction
 Planning commission was an institutional panel set up by the
government of India in 1950, which was responsible for formulating
five year plans and other development functions. Planning commission
was replaced by 'NITI AAYOG' in 2015. It was decided to adopt
planned economic growth post independence and the planning was
done by the planning commission.
 The main objective of planning commission was to improve the
standard of living of the ordinary citizens by optimizing the use of
available human resource, production and creating employment
opportunities. Today, NITI AAYOG is responsible for periodic economic
assessment of resources. Prime Minister was the chairman of the
planning commission and all the members were directly reporting to
the chairman.
 Planning commission was drafted as a functional arm of the Central
Government. Planning commission was established just for planning,
but it later went on to become extremely powerful and started
influencing the policies made by the government. It started functioning
as a super cabinet and often attracted criticism for the same.
 HISTORY
Five-Year Plans (FYPs) are centralized and integrated
national economic programs. Joseph Stalin implemented
the first FYP in the Soviet Union in the late 1920s. Most
communist states and several capitalist countries
subsequently have adopted them. China and India both
continue to use FYPS, although China renamed its
Eleventh FYP, from 2006 to 2010, a guideline (guihua),
rather than a plan (jihua), to signify the central
government's more hands-off approach to development.
India launched its First FYP in 1951, immediately after
independence under socialist influence of first Prime
Minister Jawaharlal Nehru.
 MEMBERS OF PLANNING COMMISSION
 Chairman – Prime Minister; presided over the meetings of
the Commission
 Deputy Chairman – de facto executive head (full-time
functional head);
 Was responsible for the formulation and submission of
the draft Five-Year Plan to the Central cabinet.
 Was appointed by the Central cabinet for a fixed tenure
and enjoyed the rank of a cabinet minister.
 Could attend cabinet meetings without the right to vote.
 Part-time members – Some central ministers
 Ex-officio members – Finance Minister and Planning
Minister
 Five Years Plans
 First Five Year Plan:-It was launched for the duration of 1951 to
1956, under the leadership of Jawaharlal Nehru. It was based on the Harrod-
Domar model with a few modifications. Its main focus was on the agricultural
development of the country. This plan was successful and achieved a growth rate
of 3.6% (more than its target of 2.1%). At the end of this plan, five IITs were set up
in the country.
 Second Five Year Plan:- It was made for the duration of 1956 to
1961, under the leadership of Jawaharlal Nehru. It was based on the P.C.
Mahalanobis Model made in the year 1953. Its main focus was on the
industrial development of the country. This plan lags behind its target growth rate
of 4.5% and achieved a growth rate of 4.27%. However, this plan was criticized
by many experts and as a result, India faced a payment crisis in the year 1957.
 Third Five Year Plan:- It was made for the duration of 1961 to 1966, under the
leadership of Jawaharlal Nehru. This plan is also called ‘Gadgil Yojna’, after
the Deputy Chairman of Planning Commission D.R. Gadgil. The main target of this
plan was to make the economy independent. During the execution of this plan,
India was engaged in two wars: the Sino-India war of 1962 and the Indo-
Pakistani war of 1965. These wars exposed the weakness in our economy and
shifted the focus to the defence industry, the Indian Army, and the stabilization of
the price (India witnessed inflation). The plan was a flop due to wars and
drought. The target growth was 5.6% while the achieved growth was 2.4%.
 Plan Holidays:-Due to the failure of the previous plan, the government
announced three annual plans called Plan Holidays from 1966 to 1969. The
main reason behind the plan holidays was the Indo-Pakistani war and the Sino-
India war, leading to the failure of the third Five Year Plan. During this plan,
annual plans were made and equal priority was given to agriculture its allied
sectors and the industry sector. In a bid to increase the exports in the country, the
government declared devaluation of the rupee.
 Fourth Five Year Plan:- Its duration was from 1969 to 1974, under the
leadership of Indira Gandhi. There were two main objectives of this plan i.e.
growth with stability and progressive achievement of self-reliance. During this
time, 14 major Indian banks were nationalized and the Green Revolution was
started. Indo-Pakistani War of 1971 and the Bangladesh Liberation War took
place. Implementation of Family Planning Programs was amongst major targets of
the Plan. This plan failed and could achieve a growth rate of 3.3% only against the
target of 5.7%.
 Fifth Five Year Plan:- Its duration was 1974 to 1978. This plan focused on
Garibi Hatao, employment, justice, agricultural production and defence. The
Electricity Supply Act was amended in 1975, a Twenty-point program was
launched in 1975, the Minimum Needs Program (MNP) and the Indian National
Highway System was introduced. Overall this plan was successful which
achieved a growth of 4.8% against the target of 4.4%. This plan was terminated in
1978 by the newly elected Moraji Desai government.
 Rolling Plan:- After the termination of the fifth Five Year Plan, the Rolling
Plan came into effect from 1978 to 1990. In 1980, Congress rejected the
Rolling Plan and a new sixth Five Year Plan was introduced. Three plans were
introduced under the Rolling plan: For the budget of the present year, This plan
was for a fixed number of years-- 3,4 or 5 and Perspective plan for long terms--
10, 15 or 20 years. The plan has several advantages as the targets could be
mended and projects, allocations, etc. were variable to the country's economy.
This means that if the targets can be amended each year, it would be difficult to
achieve the targets and will result in destabilization in the Indian economy.
 Sixth Five Year Plan:-Its duration was from 1980 to 1985, under the
leadership of Indira Gandhi. The basic objective of this plan was economic
liberalization by eradicating poverty and achieving technological self-reliance. It
was based on investment Yojna, infrastructural changing, and trend to the
growth model. Its growth target was 5.2% but it achieved a 5.7% growth.
 Seventh Five Year Plan:- Its duration was from 1985 to 1990, under the
leadership of Rajiv Gandhi. The objectives of this plan include the
establishment of a self-sufficient economy, opportunities for productive
employment, and up-gradation of technology. The Plan aimed at accelerating
food grain production, increasing employment opportunities & raising
productivity with a focus on ‘food, work & productivity. For the first time, the
private sector got priority over the public sector. Its growth target was 5.0%
but it achieved 6.01%.
 Annual Plans:- Eighth Five Year Plan could not take place due to the volatile
political situation at the center. Two annual programs were formed for the year
1990-91& 1991-92.
 Eighth Five Year Plan:- Its duration was from 1992 to 1997, under the
leadership of P.V. Narasimha Rao. In this plan, the top priority was given to the
development of human resources i.e. employment, education, and public health.
During this plan, Narasimha Rao Govt. launched the New Economic Policy of
India. Some of the main economic outcomes during the eighth plan period were
rapid economic growth (highest annual growth rate so far – 6.8 %), high growth of
agriculture and allied sector, and manufacturing sector, growth in exports and
imports, improvement in trade and current account deficit. A high growth rate was
achieved even though the share of the public sector in total investment had declined
considerably to about 34 %. This plan was successful and got an annual growth rate
of 6.8% against the target of 5.6%.
 Ninth Five Year Plan:- Its duration was from 1997 to 2002, under the
leadership of Atal Bihari Vajpayee. The main focus of this plan was “Growth
with Social Justice and Equality”. It was launched in the 50th year of
independence of India. This plan failed to achieve the growth target of 6.5% and
achieved a growth rate of 5.6%.
 Tenth Five Year Plan:- Its duration was from 2002 to 2007, under the leadership
of Atal Bihari Vajpayee and Manmohan Singh. This plan aimed to double the Per
Capita Income of India in the next 10 years. It also aimed to reduce the poverty ratio to
15% by 2012. Its growth target was 8.0% but it achieved only 7.6%.
 Eleventh Five Year Plan:-Its duration was from 2007 to 2012, under
the leadership of Manmohan Singh. It was prepared by the C.
Rangarajan. Its main theme was “rapid and more inclusive growth”. It
achieved a growth rate of 8% against a target of 9% growth.
 Twelfth Five Year Plan:- Its duration is from 2012 to 2017, under the
leadership of Manmohan Singh. Its main theme is “Faster, More
Inclusive and Sustainable Growth”. Its growth rate target was 8% .
For a long time, there had been a feeling that for a country as diverse and big
as India, centralized planning could not work beyond a point due to its one-
size-fits-all approach. Therefore, the NDA government has dissolved the
Planning Commission which was replaced by the NITI Aayog. Thus, there was
no thirteen Five Year Plan, however, the five-year defense plan was made. It is
important to note that the documents of the NITI Aayog have no financial role.
They are only policy guide maps for the government.
The three-year action plan only provides a broad roadmap to the government
and does not outline any schemes or allocations as it has no financial powers.
Since it doesn't require approval by the Union Cabinet, its recommendations are
not binding on the government.
Salient Features Of India’s Five Years
Plans
 Existence of Central Plan and State Plan:- Another important feature of Indian planning is
that there is the co-existence of both the Central Plan and State Plans. In every Five Year Plan of
the country, separate outlay is earmarked both for the Central Plan and also for the State Plans.
Central Plan is under the exclusive control of the Planning Commission and the Central
Government, whereas the State Plan is under the exclusive control of State Planning Board and
State Government which also requires usual approval from the Planning Commission.
 Public Sector and Private Sector Plan:- Another notable feature of India's Five Year Plan is
that in each plan, a separate outlay is earmarked both for public sector and the private sector. In
each five year plan of the country, public sector investment and private sector investment amount
is separately fixed, which comprises the total investment in each plan. India, being a mixed
economy, it is quite natural that a separate investment outlay for public as well as the private
sector is being maintained in each plan.
 Periodic Plan:- One of the important features of Indian planning is that it has adopted a
periodic plan of 5-year period having five depurate Annual Plan components. This type of periodic
plan approach is quite suitable for realizing its definite targets.
 Perspective Planning on Basic Issues or Problems:- Another important feature of Indian
planning is that it has adopted the system of perspective planning on some basic issues or
problems of the country, for a period of 15 to 20 years on the basis of necessary projections.
 Shortfalls in Target Realization:- Another notable feature of India's Five Year Plan is its
shortfalls in target realization. Although targets are fixed for every plans in respect of rate of
growth of national income, employment, population, production of some important items etc. But in
most of the cases these targets are not fulfilled to the fullest extent, excluding certain specific
cases.
 ACHIEVMENTS OF INDIAN ECONOMIC PLANS
1. Increase in national income:-
During British period the national income of India was increasing at the rate of 0.5 per cent
per annum. But during planning period the national income of India increased about 4.5 per
cent.
2. Growth in per capita income:-
Before independence the growth rate was almost zero. During first plan it was 1.8% which
was 3.6% in the ninth plan.
3. Increase in rate of capital formation:-
In 1950-51 the rate of capital formation was 10 per cent of GDP which increased to 35.9
per cent of GDP in 2006-07.
4. Development of Industries:-
During the planning period the growth rate of the industrial production has been about
seven per cent.
5. Development of social infrastructure:-
Death rate decreased from 27 per thousand in 1950-51 to 8 per thousand in 2004. Avg life
expectancy increased from 32 years in 1951 to 65 years in 2004. Many diseases eradicated.
There is spread of education and health facilities.
 Major Failure Of Indian Economic Plan
 Inadequate Growth Rate:- In quantitative terms, the growth rate of the Indian economy may be
good but not satisfactory by any standards. Except the First and Sixth Five Year Plans, the actual
growth rate remained below the targeted growth rates of GNP and per capital income. Only in recent
plans (both Ninth and Tenth plan), actual growth rate has exceeded the plan targets. In terms of per
capital income, India is one of the poorest nations of the world even after more than 58 years of
democratic planning.
 Whither India's Socialistic Society:- Indian planning aims at building up a 'socialistic pattern of
society', in an otherwise capitalistic framework, through various socialistic measures. We have not yet
made any significant progress towards the goal of attaining a socialistic pattern of society even after
nearly 58 years of planning. The concept of socialistic pattern of building a society has been altogether
discarded when we introduced new economic policy measures in mid-1991. Instead, Indian economy
very much moves on the capitalistic path.
 Economic Inequality and Social Injustice:-The twin aspects of social justice involves on the
one hand, the reduction in economic inequalities, and, on the other, the reduction of poverty. A rise in
national income with concentration of economic power in the hands of a few people is not desirable. In
an otherwise capitalist framework, inequality in the distribution of income and wealth is inevitable. In
India's socio-political set-up, vast inequalities exist. Indian plans aim at reducing such inequalities, so
that the benefits of economic development percolate down to the lower group of the society.
 Unemployment:- Removal of unemployment is considered to be another important objective of
India's Five Year Plans. But, unfortunately, it never received the priority it deserved. In the Sixth Plan
(1978-83) of the Janata Government, employment was accorded a pride of place for the first time.. As
a result, the employment generation programme in India has received a rude shock and the problem of
unemployment is mounting up plan after plan. The number of job-seekers increased from 363 lakh as
on December 1991 to 406 lakhs as on June 2006. In view of these failures, Sukhamoy Chakraborty
remarks that Indian plans may be good on paper, but are rarely good in implementation. So, the need
of the hour is to formulate a correct economic policy as well as its implementation.
 Factors Affecting Successful Implementation
Of Plan
 Lack of Leadership:- Being a leader is about more than a title following your name. It requires
developing a strategy and then expressing the vision in a clear way, so the entire team understands the
goal. When a vision is clearly laid out, business leaders must inspire team members to join the program
for the new vision and implement new strategies. Even when leaders do all this well, they still need to
be constant motivators, project managers and evaluators of the strategy's implementation.
 Excessive Distractions Prevent Effective Planning:- Too many distractions present a significant
barrier to effective planning. It could be that a leader is trying to implement too many things at once, and
the team is confused about the priorities. Another way that a distraction prevents effective planning
implementation occurs when a leader attempts to roll out a new program during a peak business season.
Your team can't focus on new strategies and processes if they are working overtime taking care of
clients. As the leader, understand that timing the implementation of new strategy carefully is as
important as the strategy itself.
 Limited Manpower to Complete Tasks:- Some strategies require a bigger labor force. Without it,
seeing a new strategy implemented effectively has potential problems. For example, a new lead-
generation plan could do a great job of flooding your sales team with leads. However, if the sales team
doesn't have the capacity to follow up with all the leads, the strategy wastes money and burns
prospects. Additionally, the new influx of orders needs a fulfillment team capable of handling the new
orders
 Inadequate Resources and Funding:- You may have a great plan but don't have the resources to
execute it properly. A lack of resources can impact marketing, talent acquisition and new distribution
programs. Bootstrapping new changes can strain the team as it implements something that isn't ready to
go. When you don't have the funding, segment the strategy and roll it out in phases that meet budget
limitations.
 Impractical Business Planning:- Some ideas are just not practical. Don't be stubborn about the
execution of a new strategy. A strategy is a concept that is fleshed out during implementation. Business
leaders must be flexible to see what is working and what isn't working in the strategy and make