Five Year Plan in India was first launched in 1951. Since then, India has witnessed 12 different Five Year Plans with different objectives and results. The Five Year Plans in India were introduced and implemented to deal with economic challenges faced by India in the respective time frame. Joseph Stalin was the first person to implement the Five-Year Plan in the Soviet Union, in the year 1928. The Five Year Plans were formulated, implemented and regulated by a body known as the Planning Commission.
In 2015, the current Narendra Modi Led government put the Five Year Plan in India to rest. The Five Year Plan in India has been replaced by a 15-year vision plan supported by 3-year action plans. According to the government, India needs a long-term vision for its growth and development in various sectors and fields. The Niti Aayog has replaced the Planning Commission in the Modi Cabinet and launched three-year action plans from April 1, 2017, onwards.
List of Five Year Plans:
First Five year Plan (1951-56):
- Prime Minister: Jawaharlal Nehru.
- It was based on the Harrod-Domar model with a few modifications.
- Harrod Damodar Model: The Harrod–Domar model is a Keynesian model of economic growth. It is used in development economics to explain an economy’s growth rate in terms of the level of saving and of capital. It suggests that there is no natural reason for an economy to have balanced growth. The model was developed independently by Roy F. Harrod in 1939, and Evsey Domar in 1946
- 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 (1956-61):
- Prime Minister: Jawaharlal Nehru.
- It was based on the P.C. Mahalanobis Model made in the year 1953.
- Mahalanobis Plan was India’s second five-year plan (1956-61) proposed by Professor Prasanta Chandra Mahalanobis. This plan gave priority to investment goods, as they were crucial for the further economic growth of India. The plan explores the allocation of investment between the different sectors of the economy
- Its main focus was on the industrial development of the country.
- This plan was achieved a growth rate of 4.27% (less than its target of 4.5%).
- Hydroelectric power projects and three steel mills at Bhilai of Chattisgarh (Help of Russia), Durgapur of West Bengal (Help of Britain), and Rourkela of Orissa (Help of Germany) were established.
Third Five year Plan (1961-66):
- Prime Minister: 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. The stress was laid on agriculture and the improvement in the production of wheat.
- The focus was on agriculture and improvement in the production of wheat.
- States were entrusted with additional development responsibilities. Ex- States were made responsible for secondary and higher education.
- Panchayat elections were introduced to bring democracy to the grassroots level
- During the execution of this plan, India was engaged in two wars: (1) the Sino-India war of 1962 and (2) 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).
- This plan was achieved a growth rate of 2.4% (less than its target of 5.6%).
- This indicated a miserable failure of the Third Plan, and the government had to declare “Plan Holidays” (1966-67, 1967-68, and 1968-69). The Sino-Indian War and the Indo-Pak War, which caused the Third Five Year Plan to fail, were the primary causes of the plan holidays.
Fourth Five year Plan (1969-74):
- Prime Minister: Indira Gandhi
- It was based on the Ashok Rudhra Menon Model
- Based on Gadgil Formula, a great deal of emphasis was laid on growth with stability and progress towards 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.
- The Drought Prone Area Programme was also launched in 1973-74.
- The target growth rate was 5.6%, but the actual growth rate was 3.3%.
- Implementation of Family Planning Programmes was amongst major targets of the Plan
Fifth Five year Plan (1974-78):
- Prime Minister: Indira Gandhi
- This plan focussed on Garibi Hatao, employment, justice, agricultural production and defence. The main target of this plan was to make the economy independent. The stress was laid on agriculture and the improvement in the production of wheat.
- It laid stress on increasing employment and poverty alleviation.
- The Indian National Highway System was introduced.
- The Minimum Needs Programme introduced in the first year of this plan, aimed to provide basic minimum needs. MNP was prepared by D.P. Dhar.
- The Electricity Supply Act was amended in 1975, a Twenty-point program was launched in 1975 enabling the central government to enter into power generation and transmission.
- The target growth rate was 4.4% and the actual growth rate turned out to be 4.8%
- This plan was terminated in 1978 by the newly elected Morarji Desai government.
Rolling Plan (1978-80):
A rolling plan is one in which the effectiveness of the plan is evaluated annually and a new plan is created the following year based on this evaluation. As a result, throughout this plan, both the allocation and the targets are updated. Rolling plan concept was suggested by Gunnar Myrdal (Sweden).
This was a period of instability. The Janata Party government rejected the fifth five-year Plan After the termination of the fifth Five Year Plan, the Rolling Plan came into effect from 1978 to 1980.
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
- 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.
In 1980, Congress rejected the Rolling Plan and a new sixth Five Year Plan was introduced.
Sixth Five year Plan (1980-85):
- Prime Minister: Indira Gandhi
- The basic objective of this plan was economic liberalization by eradicating poverty and achieving technological self-reliance.
- It was based on investment Yojana, infrastructural changing, and trend to the growth model.
- Its growth target was 5.2% but it achieved a 5.7% growth.
- To prevent overpopulation, family planning was introduced.
- On the recommendation of the Shivaraman Committee, the National Bank for Agriculture and Rural Development was established in 1982.
Seventh Five year Plan (1985-90):
- Prime Minister: Rajeev Gandhi
- The objectives of this plan include the establishment of a self-sufficient economy, opportunities for productive employment, and up-gradation of technology. It laid stress on improving Industrial productivity levels through the use of technology.
- The Plan aimed at accelerating increasing economic productivity, increasing the production of food grains and generating employment by providing Social Justice.
- 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 (1990-92):
The Eight Five Year Plan was not introduced in 1990 and the following years 1990-91 and 1991-92 were treated as Annual Plans. This was largely because of the economic instability. India faced a crisis of foreign exchange reserves during this time. Liberalization, Privatization, Globalization (LPG) was introduced in India to grapple with the problem of the economy under prime minister P.V Narasimha Rao.
Eighth Five year Plan (1992-97):
- Prime Minister: 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. The Eighth Plan promoted the modernization of Industries.
- 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 %
- India became a member of the World Trade Organization on 1 January 1995.
- The goals were to control population growth, reduce poverty, generate employment, strengthen the development of infrastructure, manage tourism, focus on human resource development etc.
- It also laid emphasis on involving the Panchayats and Nagar Palikas through decentralisation.
- Pradhan Mantri Rozgar Yjana was launched in 1993.
- This plan was successful and got an annual growth rate of 6.8% against the target of 5.6%.
Ninth Five year Plan (1997-2002):
- Prime Minister: Atal Bihari Vajpayee
- The main focus of this plan was “Growth with Social Justice and Equality”. Priority was given to Rural Development and agriculture.
- It was launched in the 50th year of independence of India.
- It offered support for social spheres to achieve complete elimination of poverty and witnessed the joint efforts of public and private sectors in guaranteeing economic development.
- The objectives, further included, empowering socially disadvantaged classes, developing self-reliance and primary education for all children in the country.
- Strategies included enhancing the high rate of export to gain self-reliance, efficient use of scarce resources for rapid growth etc.
- This plan failed to achieve the growth target of 6.5% and achieved a growth rate of 5.6%.
Tenth Five year Plan (2002-2007):
- Prime Minister: 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. To achieve 8% GDP growth rate, Reduce poverty by 5 points and increase the literacy rate in the country.
- The features of this plan were to promote inclusive growth and equitable development.
- It aimed at reducing the poverty by half and creating employment for 80million people. Further, it aimed to reduce regional inequalities.
- It also emphasised reducing the gender gaps in the field of education and wage rates by 2007.
- Its growth target was 8.0% but it achieved only 7.6%.
Eleventh Five year Plan (2007-2012):
- Prime Minister: Manmohan Singh
- It was prepared by the C. Rangarajan.
- Its main theme was “rapid and more inclusive growth”.
- The Eleventh Plan was significant in its aim to increase enrolment in higher education and focused on distant education as well as IT institutes. Ex: The Right to Education Act was introduced in 2009, and came into effect in 2010, making education free and compulsory for children aged between 6-14 years.
- It is aimed at environmental sustainability and reduction in gender inequality.
- The focus was also laid on providing clean drinking water for all by 2009.
- The target rate was 9% and the actual growth rate was 8%.
Twelfth Five year Plan (2012-2017):
- Prime Minister: Manmohan Singh
- Its main theme is “Faster, More Inclusive and Sustainable Growth”.
- The plan aimed at strengthening infrastructure projects, and providing electricity supply in all villages.
- It also aimed at removing the gender and social gap in admissions at school and improved access to higher education.
- Further, it aspired to enhance the green cover by 1 million hectares each year and to create new opportunities in the non-farming sector.
- Its growth rate target was 8%.
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