Five Years Plan From 1951-1974

After its independence, India went through different kinds of social, political, and economic turmoil and disturbances. The economy faced many challenges, agricultural development was lagging, trades and industries were struggling, and human resources were becoming inadequate and inefficient. During this time of crisis, the policymakers and the founders of the new constitution came up with a strategy of implementing a five-year plan to show India a direction to achieve developmental objectives that would help India to recover from the crisis and become Self-Sufficient. This plan started with two main objectives – the Removal of Poverty and the attainment of Self-Reliance. This long-term planning achieved higher growth rates, better income distribution, and increased domestic savings. It also focused on import substitution and export promotion to earn revenue and facilitate economic growth.

First Five-Year Plan (1951-1956):

The first Five-year plan was drafted by India’s first Prime Minister, Jawaharlal Nehru. This economic plan was introduced to effectively use India’s resources, improve the economic condition, and develop the industrial and agricultural sectors. The first five-year plan was from April 1951 to March 1956. The focus of the first five years plan was the development of agriculture and how to attain agricultural development to increase the per capita income. The overall objective was to solve different problems faced at that time due to the partition of the nation, refugee situations, and the Second World War. The first five-year plan aimed to achieve certain targets, which are as follows:

• Increase Per Capita Income. 
• Improve The Primary Sectors’ Overall Efficiency. 
• Produce More and Reduce The Dependency On Foreign Exchanges. 
• Provide More Employment. 
• Render Shelters And Food Supplies For The Refugees. 
• Control Outward Investments And Focus On Generating Inward Capital.

The first five-year plan was quite successful, as the GDP growth reached 3.6% against the target of 2.1%. This led to significant economic development. There was an improvement in the agriculture and trading sectors. The other achievements include price stability, lesser inflation, and an increase in capital income with the generation of better employment opportunities. During the first five-year plan, India also witnessed significant improvements in the academic sector by establishing new technical institutions ready to provide higher education.

Second Five-Year Plan (1956-1961):

The Second Five Year Plan was introduced with the idea of developing the public sector and rapid industrialization. The plan was based on the economic model devised by Sri Prasanta Chandra Mahalanobis. The plan allocated nearly 50 billion rupees in various fields to achieve the developmental targets. There was the emphasis given to scaling up production and the adoption of new techniques of production to improve productivity. Investments were made in new technology and efficient methods to grow India’s annual national income to 4.5%. The main highlights of this plan were as follows:

• India began setting up hydroelectric power projects and steel plants in collaboration with the USSR, the UK, and West Germany to improve the production capacity within India. 
• More railway lines were added for better communication, especially in Northeast India. 
• The research was carried out in the nuclear power field, and atomic energy centers were established. 
• Funding was done to enhance irrigation, transport, communication, and energy facilities. 
• Training and scholarship programs were started to encourage young talented people to participate in research and development activities.
• India achieved 4.27% GDP growth while panning against the target of 4.5%. 

The second five-year plan prepared a promising roadmap of growth and prosperity but later on encountered a lot of challenges in achieving the targets. The plan did not help fight the issue of poverty which was a serious issue then and remains a big issue in the present day. The money allocated to the different projects did not end up successfully and could not generate employment opportunities as desired. Above all, the currency of India had to be devalued, causing a burden on external payments and bringing India into a poor economic condition. Also, the private industries could not do well as the attention was given primarily to the public sector. So many issues became visible during the tenure of the second five-year plan.

Third Five-Year Plan (1961-1966):

The third five-year plan is also called ‘Gadgil Yojana’, after Dr. D.R. Gadgil , who was the Deputy Chairman of the Planning Commission and responsible for making the roadmap of this plan. It was based on Sukhamoy Chakraborty and John Sandy’s model. The main target of this plan was to make the economy more independent and sustainable. The stress was given to agricultural production, especially the improvement in wheat production. The execution of this plan was severely affected due to India’s involvement in two wars, namely the Indo-China war (1962) and the Indo-Pakistan war (1965). The wars exposed the economic instability of our country, and the entire focus was shifted to the defense sector and tackling the associated impact of wars like high inflation and price rise. The plan was could not be materialized due to wars and drought. The achieved growth was only 2.4% which was far below the target growth rate of 5.6%.

Fourth Five-Year Plan (1969-1974):

Due to the massive failure of the third five-year plan, the Indian government announced a Planned Holiday from 1966 to 1969. The fourth five-year plan was implemented in 1969 under the leadership of Prime Minister Mrs. Indira Gandhi. The primary objectives of this plan were economic growth with stability and progressive development of the country toward self-reliance. The main achievements that happened during this plan are as follows: 

• During the tenure of this plan, India successfully fought the war with Pakistan and helped Bangladesh gain independence in 1971. 
• The most significant achievement was the Green Revolution, which marked the beginning of India’s Self-Reliance on food grains. 
• The banking sector witnessed a major change as 14 major Indian banks were nationalized.
• Implementation of the family planning programs.
• The achieved growth was 3.3% which was far below the target growth rate of 5.6%

Conclusion:

Economic development was the main objective of the five-year plan in India, which is measured by Gross Domestic Product (GDP) and per capita income. Economic planning aims for better utilization of human resources, increased employment, stable market conditions, and self-reliance on commodities. The five-year plans aim to increase the welfare and development of social services such as education, healthcare, and emergency services as a part of economic development. 
There was an opinion that centralized planning could not work beyond a certain point for a diverse country like India, so the NDA government dissolved the Planning Commission and replaced it with the Niti Aayog. No five-year plan was implemented after the twelfth five-year plan ended in 2017.