Know About Every Economic Five - Year Plan Of India
Updated: Feb 6
The concept of economic planning in India is derived from Russia. From 1947 to 2017, the Indian economy was premised on the concept of planning. This was carried through the Five-Year Plans, developed, executed, and monitored by the Planning Commission (1951-2014) and the NITI Aayog (2015-2017). India has launched 12 five year plans so far. The first five-year plan was launched in 1951. Now the present government has stopped the formation of five-year plans. So the 12th five-year plan would be called the last five-year plan of India. The Niti Aayog, which has replaced the Planning Commission, is launching a three-year action plan.
Though the planned economic development in India began in 1951 with the inception of the First Five Year Plan, theoretical efforts had begun much earlier, even prior to independence. Setting up of National Planning Committee by Indian National Congress in 1938, The Bombay Plan & Gandhian Plan in 1944, Peoples Plan in 1945 (by post-war reconstruction Committee of Indian Trade Union), Sarvodaya Plan in 1950 by Jaiprakash Narayan were stepped in this direction.
So, Here is a quick overview of India’s Five Year Plans:
First Five Year Plan of India (1951-56) - It was based on Harrod-Domar Model. The main focus was on the agricultural development of the country. It was a successful plan primarily because of good harvests in the last two years of the plan and achieved a growth rate of 3.6% which was more than its target of 2.1 %.
Second Five Year Plan of India (1956-61) - Professor Mahalanobis developed the plan. Its main focus was on the industrial development of the country & the 2nd Five Year Plan was only moderately successful.
Third Five Year Plan of India (1961-66) - This plan is also called ‘Gadgil Yojna’ based on the experience of the first two plans agriculture was given top priority to support the exports and industry. The Plan was a thorough failure in reaching the targets due to unforeseen events - Chinese aggression (1962), Indo-Pak war (1965), severe drought 1965-66.
From 1966-69, three Annual Plans were devised. While the Fourth Plan was designed in 1966, it was abandoned under the pressure of drought, currency devaluation, and inflationary recession on the economy. This is period is also called – Plan Holiday.
Fourth Five Year Plan of India (1969-74) - There were two main objectives of this plan i.e. growth with stability and progressive achievement of self-reliance. An influx of Bangladeshi refugees before and after 1971 Indo-Pak war was an important issue along with price situation deteriorating to crisis proportions and the plan is considered a big failure.
Fifth Five Year Plan of India (1974-79) - This plan had two main objectives – the removal of property and attainment of self-reliance. The draft of this plan was prepared and launched by the D.P. Dhar. This plan was terminated in 1978.
Rolling Plan: This plan was started with an annual plan for 1978-79 and as a continuation of the terminated fifth-year plan.
Sixth Five Year Plan of India (1980- 85) - This plan focused on the socio-economic infrastructure in the rural areas. Further, it endeavored to eliminate rural poverty and reduce regional disparities through the Integrated Rural Development Program.
Seventh Five Year Plan of India (1985 – 90) - Objectives of this plan include the establishment of a self-sufficient economy, opportunities for productive employment. The plan was very successful as the economy recorded a 6% growth rate against the targeted 5% with the decade of the ’80s struggling out of the’ Hindu Rate of Growth’.
Eighth Five Year Plan of India (1992 – 97) - The eighth plan was postponed by two years because of political uncertainty at the Centre. 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 New Economic Policy of India. This plan was successful and got an annual growth rate of 6.8% against the target of 5.6%.
Ninth Five Year Plan of India (1997 – 2002) - The Plan prepared under the United Front Government focussed on “Growth With Social Justice & Equality “. It was launched in the 50th year of independence of India. This plan failed to achieve the growth target of 7% and grow only at the rate of 5.6%.
Tenth Five Year Plan of India (2002 – 07) - Recognising that economic growth can't be the only objective of the national plan, Tenth Plan had set ‘monitorable targets’ for few key indicators (11) of development besides 8 % growth target. This plan aims to double the per capita income of India in the next 10 years. It aims to reduce the poverty ratio by 15% by 2012. Its growth target was 8.0% but it achieved only 7.2%.
Eleventh Five Year Plan of India (2007-12) - It was prepared by the C. Rangarajan with the main theme of “faster and more inclusive growth”. Its growth rate target was 8.1% but it achieved only 7.9%.
Twelfth Five Year Plan of India (2012 – 17) - The main theme was “Faster, More Inclusive and Sustainable Growth” with a growth rate target of 8%. It is the current five year plan of India.
With the Planning Commission dissolved, no more formal plans are made for the economy, but Five-Year Defence Plans continue to be made. The latest is the 2017-2022. There will be no Thirteenth Five-Year Plan. Three-year action plan documents only provide a broad roadmap to the government. The document does not detail any schemes or allocations as it has no financial powers. Since it need not be approved by the Union Cabinet, its recommendations are not binding on the government.
The documents of the Niti Ayog have no financial role. They are only policy guide maps for the government.
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