India embarked upon planned economic development soon after the achievement of independence. Planning in India derives its objectives and social premises from the Directive Principles of State Policy set forth in the Constitution. The Planning Commission prepares a blueprint of development, taking an overall view of the needs and resources of the country.
The First Five-Year Plan had a two-fold objective to correct the disequilibrium in the economy caused by the Second World War and partition of the country and to initiate simultaneously a process of all round balanced development which would ensure a rising national income and a steady improvement in the living standards over a period of time. The plan accorded highest priority to agriculture, including irrigation and power projectes.
The Second Five-Year Plan sought to promote a pattern of development which would ultimately lead to the establishment of a socialistic pattern of society in India. In particular, it stressed that the benefits of economic development should accrue more to the relatively less privileged sections of society and there should be a progressive reduction in the concentration of incomes, wealth and economic power. The plan aimed at 25 per cent increase in national income, rapid industrialisation with particular emphais on the development of basic and heavy industries, large expansion of employment opportunities and reduction of inequalities in income.
The Third Five-Year Plan aimed at securing a marked advance towards self-sustaining growth. The objectives of the plan were to secure an increase in the national income; to achieve self-sufficiency in foodgrains and increase in agricultural production; to expand basic industries like steel, chemicals, fuel and power, and to establish machine-building capacity to utilise fully the manpower resources of the country and ensure substantial expansion in employment opportunities and to establish progressively greater equality of opportunity and bring about reduction in disparities of income and wealth.
The finalisation of the fourth plan was delayed due to the situation created by the Indo-Pakistan conflict, two successive years to severe drought, devaluation of the currency, rise in prices and erosion of resources available for plan purposes. However, three annual plans between 1966 an 1968 were formulated.
The Fourth Five-Year Plan aimed at accelerating the tempo of development in condition of stability and at reducing fluctuations in agricultural production as well as the impact of uncertainties of foreign aid. It aimed at raising the standard of then people through programmes which, at the same time, were designed to promote equality and social justice. The plan laid particular emphasis on improving the conditions of the less privileged and weaker sections of the society.
The Fifth Five-Year Plan was formulated at a time when the economy was facing severe inflationary pressures. The major objectives of the plan were to achieve self-reliance and to adopt measures for raising the consumption standards of the people living below the poverty line. The plan also gave high priority to bringing inflation under control and to achieve stability in the economic situation. The fifth plan was ended on year ahead with the close of the annual plan 1977-78 and work was initiated for a new plan for the next five years with new priorities and programmes.
The sixth five-year plan (1980-85)
Having terminated the fifth plan a year ahead of its scheduled operation, the then Government at the Centre launched the sixth plan in 1978-79. However; this plan was once again disbanded with the new Government taking charge at the Centre and a revised sixth plan was formulated. This revised plan was effective from the year 1980 onwards and covered a period up to the end of 1985.
The removal of poverty was the foremost objective of th Sixth Five-Year Plan. The strategy adopted was to move simultaneously towards strenghening infrastructure for both agriculture and industry.
The plan, in spite of all odds against it, was a tremendous success. The economy attained a growth rate of 5.3 per cent as against the 5.2 per cent laid down in the plan. Production targets were largely achieved in the realised rate of 5.5 per cent growth rate in the industrial sector was much below the plan target of 7 per cent. Success was also striking in the realm of poverty alleviation. In brief, the sixth plan made a fairly convincing success in strengthening the impulses of growth.
The seventh five-year plan (1985-90)
The Seventh Five-Year Plan, which came to a close on March 31, 1990, is estimated to have achieved a GDP growth of 5.6 per cent per annum as against the target growth rate of 5 per cent rate has fluctuated from year to year, being just 5 per cent in 1985-86 and below 4 per cent in of 10.4 per cent recorded in 1988-89 and 5.2 per cent growth in 1989-90 have enabled the plan to exceed its growth rate envisaged for the five year period.
The financing pattern of the planned expenditure has been different from the plan projections. The main areas of concern relate to shortfalls in surpluses of public enterprises, steep rise in centre’s on deficit financing. Among the items of non-plan expenditure, defence, interest payments on public debt and subsidies on food and fertilisers accounted for nearly one-third to three-fourth of the revenue receipts of the Central Government over those years of the Seventh Plan.
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