After India gained independence it was necessary to improve the economic condition of the country and lead India towards development as the British government left India hurriedly and in utter chaos. Thus everything was to needed to be managed wisely and judiciously. When India got its constitution, India became a republic and all the laws of the country were now managed and well documented but this did not lead to the economic development of the nation. Thus there was a need for something else to do this work.
Five-Year Plans (FYP)
The concept of Five-year plans was adopted to improve the economic condition of the country and do the economic planning in the country. The Bombay Plan proposed by the various industrialists of the country in 1944 led to the decision of adopting the FYP for economic planning. The concept of FYP was taken from The Soviet Union and introduced first by Joseph Stalin. FYP was adopted in India in the year 1951 and continued till 2017 by the First PM of India, Jawaharlal Nehru.
Concept of FYP and its objectives:
The concept of FYP followed the following:
- The government of India prepared a two-part document that included the non-plan budget and the plan budget. State governments also prepared a similar document.
- The non-plan budget was used for the yearly expenditure of the center and the state whereas the planned budget was used on the items or priorities that were set for that particular FYP.
- The work of implementing, deciding the priorities, and regulating the FYP was done by a body called the Planning Commission which was set up in 1950.
Objectives of FYP are as follows:
- Increase the growth rate of the nation and in turn, improve the standard of living of the people
- Lead the nation toward prosperity
- Make India self-dependent and self-reliant
- Industrialization of the country
- Reduce the gap between the rich and the poor
- Efficient utilization of the resources
From 1951 to 2017 India launched many FYPs. Let us see various FYPs in detail below.
List of Five-Year Plans of India
First Five-Year Plan
- First Five Year Plan was introduced in the year 1951 and continued till 1956.
- This plan was based on the Harrod Domar model and suggested increasing the savings of the nation,
- The main emphasis was on the agricultural development in the country as India was an agriculture-based economy. It aimed to make India self-sufficient in food grains.
- This plan set aside huge funds for the largest dam in India, Bhakra Nangal Dam.
- 5 new IITs were also set up as a part of this plan.
- This FYP aimed to achieve a growth of 2.1% but the actual growth rate was 3.6%
Second Five-Year Plan
- The second Five Year Plan was introduced in the year 1956 and continued till 1961.
- This FYP was based on the PC Mahalanobis Model. The main aim of this FYP was the industrialization of the country and the increase of industries in the public sector of the country.
- This FYP aimed to achieve a growth of 4.5% but the actual growth rate was 4.27% as there was a lack of foreign exchange in the country.
- Tariffs were imposed on foreign imports as a part of this plan.
- Five steel mills at Bhilai, Durgapur, and Rourkela were established as a part of this plan.
Third Five-Year Plan
- Third Five Year Plan was introduced in the year 1961 and continued till 1966.
- It laid emphasis on agriculture and industrialization.
- Panchayat elections, secondary education boards, and state electricity boards were established under this plan.
- This five-year plan was unsuccessful due to the Indo-China war of 1962 and the Indo-Pak war of 1965 and the bad monsoon.
- This FYP aimed to achieve a growth of 5.6% but the actual growth rate was 2.4%
Plan Holidays
- This was a unique plan that was introduced due to the failure of the Third FYP due to India Pakistan war.
- Thus, the Government of India introduced three annual plans under Plan Holidays with a focus on agriculture and industrialization from 1966-67, 1967-68, and 1968-69.
- Various measures such as HYV seeds, irrigation techniques, and the use of fertilizers were introduced to improve agriculture in the country.
Fourth Five-Year Plan
- Third Five Year Plan was introduced in the year 1969 and continued till 1974 by Indira Gandhi.
- It was based on the Gadgil model.
- The green revolution was launched in India by MS Swaminathan and Drought Prone Area Programme was launched.
- 14 banks were nationalized under this plan.
- The plan aimed to achieve a growth rate of 5.6%, but the actual growth rate was 3.3%.
Fifth Five-Year Plan
- This plan was introduced from 1974-1979.
- Garibi Hatao was the main motive of this plan.
- This plan also focused on increasing employment and controlling inflation.
- Indian National Highway System was introduced under this plan.
- Minimum Needs Programme formulated by DP Dhar was also launched.
- The actual growth rate was 5% whereas the expected growth rate was 4%.
- This plan was terminated in the 4th year by the Janata Party government under Morarji Desai.
Rolling Plan
- When the Morarji Desai government rejected the Fifth FYP, it introduced a new Sixth FYP which was to be implemented from 1978-83 but it also ended in 1980 when Indira Gandhi was re-elected as the PM.
- Gunnar Myrdal coined the term Rolling Plan.
Sixth Five-Year Plan
- This plan was introduced by Indira Gandhi from 1980-85.
- This plan focused on economic liberation.
- Family Planning was introduced and NABARD was set up by the recommendation of the Shivaraman Committee.
- This plan was very successful and achieve a growth rate of 5.4%.
Seventh Five-Year Plan
- This plan was introduced during the time of Rajiv Gandhi in 1985-90.
- It focused on using technology to improve production in industries.
- Jawahar Rozgar Yojna was started in 1989 under this plan.
- The expected growth rate was 5% but it was actually 6.01%
Annual Plans
- The period from 1990 to 1992 saw some political disturbances and hence no FYP was introduced. Instead, two annual plans were introduced from 1990-91 and 1991-92 respectively.
- The economic condition of India was not good during this period and it had only US $1 billion of forex reserves. Dr Manmohan Singh revived the country from this condition by introducing free-market reforms.
- This phase saw the beginning of industrialization, privatization and globalization in the country.
Eighth Five-Year Plan
- This plan was introduced from 1992-97.
- It focused on the modernization of industries in the nation.
- India successfully became a member of WTO during this plan.
- The plan aimed to control the population, reduce poverty, create employment, development of infrastructure, increase tourism, human resource development etc.
- The plan achieved a growth rate of 6.8% as compared to the expected growth rate of 5.6%.
Ninth Five-Year Plan
- This plan was introduced from 1997-2002.
- It aimed towards growth with justice and equity.
- Ensuring food security was also an area of focus of this plan.
- Emphasis was laid on increasing the exports from the country.
- The target growth rate was expected to be 7.1% but the actual growth rate was 6.8%.
Tenth Five-Year Plan
- This plan was introduced from 2002-2007.
- The plan focused to achieve a GDP of 8% and create 50 million jobs in the 5 years.
- The expected growth rate was 8.1% but the actual growth was 7.6%.
- The 20-point programme was also introduced in this plan.
- Reducing gender inequality was also an aim of this plan.
Eleventh Five-Year Plan
- This plan continued from 2007-2012.
- It was prepared by C.Rangarajan.
- Right to Education Act, 2010 was introduced which made education necessary for children aged 6 to 14 years.
- Rajiv Arogyashri Health Scheme was also launched.
- This plan focused to provide safe drinking water to all, increase the forest cover of the country, increasing sex ratio, and increase the GDP of the country from 8% to 10%.
- The expected growth rate was 9% but the actual growth rate was 8%.
Twelfth Five-Year Plan
- This was the last Five Year Plan and was introduced from 2012-2017.
- Its theme was “Faster, More Inclusive and Sustainable Growth”.
- It aimed to reduce poverty and increase agriculture by 4%.
- Healthcare, education, environment were the main focus areas of this plan.