BBA Indian Economy Notes Long Answer Type Question
BBA Indian Economy Notes Long Answer Type Question:-
Long Answer Questions
Q. 1. What do you mean by economic planning? Explain the need of economic planning in India.
Explain the meaning and objectives of economic planning with special reference to India.
Ans. Meaning of Economic Planning : Economic planning without state ownership of means of production is inc conceivable. In India, development plans were formulated and carried out within the framework of the mixed economy, Mixed economics are characterized by the co-existence of private and public sector.
The private sector typically comprises of four distinct productive activities :
- Subsistence farming and handicrafts.
- Small scale individual and family owned commercial business industry.
- Medium sized commercial enterprise in industry, trade, transport and agriculture; and
- Large manufacturing enterprises, mining companies and plantations, producing for domestic and/or foreign markets.
One can identify two principal components of economic planning :
1. The government mobilises domestic resources and also raises foreign finance to carry such projects which are expected to induce productive activities in the private sector. From this point of view development of infrastructure/partiCUlarly railways, hydroelectric projects and irrigation system receives overriding priority. The other activity that invited government’s direct involvement in the past is setting up of heavy industries, involving large finance and long gestation period. 2. The government also adopted on the one hand certain economic policies (e.g., taxation industrial licensing, tariffs wages, prices and interest rates) which stimulated private economic activity, and on the other introduced restrictive physical controls in order to ensure a harmony between the social objectives of the government of the behaviour of the private pr0ducers and businessmen.
Economic planning in India did not replace market. In fact, the market and Economic Planning have been complementary to one another. Economic Planning means the direction’ regulation and control of economic activities of the country by a central planning authority.
“Planning in the modern gorgon, involves government control of production in some form of order”—Prof. L, Robinson
“Economic planning is a system in which the market mechanism is deliberately manipulated with the object of producing a pattern other than which would have resulted from its spontaneous activity.”—Mrs. B.
Wooten“Planning is an organised, conscious and continual attempt to select the best available alternatives to achieve specific goals.” —Prof, Waterson
“Economic Planning is essentially a way of organizing and utilizing resources to maximum advantage in forms of social ends.” —First Five Year Plant Draft of India
Important Features/Characteristics of Economic Planning
Economic planning is mainly of two types :
(i) Economic planning resorted in underdeveloped countries with the objective of translating development promises into practice.
(ii) Planning in socialist countries.
1. A System of Economic Organisation : Economic planning is a comprehensive system of economic organisation in which all the economic activities of production, consumption distribution, exchange and finance are defined and planned in coordinated manner so that certain economic and social objectives may be achieved.
2. Central Planning : All the activities of economic planning are performed by a central planning authority. This authority is known as planning commission in India. All the important decisions are taken by this authority.
3. Determination of Target and Priorities : Economic and social targets are well defined in the process of economic planning. A certain priority order is also determined for these targets.
4. Government Regulation and Control : Economic planning is a government affair. All the plans are determined, regulated and controlled by government, generally central government’
5. A Certain Period : The process of economic planning involves the determination of economic plans for a certain period. In India, an economic plan is prepared for five years. After completing one five year plan, another plan is launched.
6. Economic and Social Development : Main theme of economic planning is economic development and social welfare. All the possible efforts are made to achieve balanced growth’
7. Unreliable Data : Any it has to be purposeful should be based on authentic data However, the status of data in India is really very poor.
Objectives of Economic Planning –
“Maximum production and full employment, the attainment of economic equality or social justice which constitute the accepted objectives of planning under Present day conditions are not really so many different ideas but a series of related aims which the country must work for. None of these objectives can be persuade to the exclusion of others, a plan of development must play balanced emphasis on all of these.” —First Five Year Plan of India Important objectives of economic planning can be divided into following three broad categories :
A. Economic Objectives
1. Full Employment : Economic planning aims to achieve full employment in the economy. It realises that unemployment and under-employment is a great obstacle in the way of economic and social development.
2. Best Utilisation Of Physical, Human and Natural Resources : Economic planning aims at utilising the available physical, human and natural resources in the best possible manner, economic planning aims at utilizing these resources in the manner that on one hand economic development may be achieved and on the other hand, social welfare may be ensured.
3. Minimising Economic Disbalance : We have economic inequalities in our society. Economic planning aims at maintaining proper balance between rich and poor. Fair and equal distribution of income and wealth is ensured, concentration of economic power is controlled and economic inequalities are reduced to minimum.
4. Balance Development : An important object of economic planning is to promote balanced economic development of a country. All the possible efforts are made to maintain a balance between agricultural and industrial development, rural and urban development, economic and social development, large scale and small scale industries, developed areas and backward areas etc.
5. Improvement in Production and Productivity : Economic planning aims at promoting prod uction and productivity. All the possible efforts are made to increase production and to imprcve productivity of all the sectors of economy.
6. Economic Security and Stability : Economic planning aims at securing economic security and stability, fair remuneration to the workers, fair return to the investors, reasonable return to the entrepreneurs, etc., are insured. Economic fluctuations, business cycles, etc., are controlled through monetory and fiscal policies.
7. Attaining Self-Realiance : Economic planning aims at attaining self-realiance. Best possible efforts are made to promote exports and to channelise industrial development of the country in the manner that dependence on imports may be minimised. Basic and primary industries and infrastructural facilities are developed within the country.
8. Enhancement in Standard of Living : Economic planning aims at raising the standards of living of people also. All the possible goods and services of high quality are provided to people at reasonable prices.
B. Social Objectives
1. Social Security : Economic planning for providing and promoting social security to all the people. Necessary plans and programmers are launched for the welfare of poor and weaker sections of society. Old-age pension, unemployment allowance, accidental insurance, etc., schemes are
2. Social Welfare : A key object of economic planning is to promote social welfare. Best possible launched. facilities of education, accommodation, medical, transportation, communication, light and water, recreation, etc., are provided to the people.
3. Social Equality : Economic planning aims at providing and ensuringsocial equality. Equal opportunities of development are provided to every cities of country. Fair and reasonable distribution of national income and national product is ensured. Inequalities in distribution of income and wealth are minimised. Best possible efforts are made to ensure equal development of-all the part of country.
C. Political and Other Objectives
1. Satisfying Political Ego : Economic planning has been adopted by different political parties as a tool to satisfy their political ego. Change in economic plans and policies on a change in government is an example of achieving this object.
2. Promoting Defence : Defence from foreign attacks and aggressions is also an important object of economic planning. Indo-Pak war of 1948, 1965 and 1971 and Indo-China War of 1962 have proved that no plan of economic or social development can be complete without ensuring country’s defence.
3. Promoting Internal Peace : Maintenance of law and order and internal peace is also an essential pre-condition for economic and social development, therefore, it is an important object of economic planning. All the best possible efforts are made to achieve this object.
Need of Economic Planning in India
Soon after the attainment of independence in 1947, Indian adopted the path of planned economic development to reshape its economy and to solve the twin problems of poverty and unemployment. For this purpose, five year plans were launched, Main objects of economic planning in India are :
1. Economic Growth : Economic growth has always remained in focus as the main need of Indian five year plans. When the performance of a particular plan is evaluated, the main thing that is investigated is the success on the growth front. It has often been assumed that the gains of economic growth would percolate downwards and thus inequalities would decline and poverty problem would automatically be solved. The growth of employment was also taken for granted.
2. Self-Realiance : Indian economy was essentially agrarian, the output of food grains was not adequate and the country imported big quantities of food grains from the U.S.A. and some other countries. If some underdeveloped country seriously desires to keep its growth activity free from political pressures of other countries it has no choice but to become completely self-realiant in food and capital equipment. Further, it has also to minimize its dependence in aspect of aid from other countries and the institutions like the IMF and the World Bank. These are the reasons why is self-realiance need of economic planning in India.
3. Removal of Unemployment : Unemployment problem requires an immediate solution for the elimination Of poverty. It is observed that with the rising number unemployed, poverty expands. Planning Commission had argued that as national income grows in response to increased investment and development outlay, the demand for labour rises and employment expands.
4. Elimination of Poverty : One of the basic aims of planning in India is to bring about economic development through the simultaneous development of agriculture, industry, power, transport, communication and all other sectors of economy. Through this, national and per capita income of the country may be increased, poverty may ‘be removed and the standard of living of people may be raised.
5. Modernisation : The term modernisation connotes a variety of structural and institutional changes in the framework of economic activity. Modernisation refers primarily to technological advances. In industry several major technological advances have taken place in the world of which the important flow from three sources :
(a) The application of computers and electronics to production process.
(b) Improvements in fuel efficiency of prime movers and other industrial equipment.
(c) The use of new materials.
6. Full Utilisation of Available Resources : India is said to be a rich country inhabited by the poor because India has vast natural and physical resources but these resources are unutilised or Under-utilised. The need Of full utilisation Of these resources is of great importance for economic development of the country. It was felt that economic planning may help in making full and proper utilisation of resources.
7. Providing Social Justice : Planning in our country aims at achieving the much needed object of social justice. Planning is expected to reduce inequalities of income, to provide equal Opportunities of education and employment to all and to check the concentration of economic power.
8. Overcoming Initial Problems : When India became independent, it had to face a number of economic and social problems such as mass poverty, mass unemployment, an illiterate and Untrained labour force, static agriculture, less developed industrial sector and inadequate supply of infrastructural facilities etc. It was felt that the only way to solve these problems simultaneously is economic planning.
9. Undertaking Big Tasks : Planning was considered necessary for India to enable the government to undertake many big tasks, i.e., to raise the rate of investment, to raise the productive capacity of country, to mobilize foreign resources, to increase foreign trade of country etc.
To sum up, it may be said that the basic object of economic planning in India is to eradicate Poverty and unemployment, to accelerate the rate of economic development and to achieve balanced, regional and sectoral development of economy.
Q. 2. Write a detailed note on Planning Commission of India and National Development Council (NDC).
Explain/Describe the organisation and functions of Planning Commission in India.
Explain the organisational structure of planning commission of Indian Discuss the functions of planning commission.
Ans. Planning Commission of India : After Independence, India’s economic condition was not so good, India was facing lots of problems like, poverty, shortage of food grains, lack of Industrial-development etc. Therefore, it was decided that planned economic development is the only way to solve these problems. An Economic Programme Committee was constituted by congress just after independence. The committee recommended that a planning commission should be set up, Planning Commission was formally set up on 15 March, 1950 Head Office of Planning Commission is in ‘Yojana Bhawan’ at parliament street, New Delhi.
Organisation of Planning Commission
Planning commission is a recommendatory body responsible for the formation, implementation and evolution of plans. Prime Minister of India is the ex-officio chairman of planning commission. A deputy chairman and some members are appointed in planning commission organisation of planning commission can be divided into five parts :
I. Ordinary Department : Planning commission have 8 ordinary departments they are :
1. Statistics and Survey Department.
2. Economic Department.
3. Labour, Employment and Manpower Department.
4. Future Planning Department.
5. Information Department.
6. Project Evaluation Department,
7. State Planning Department.
8. Planning Co-ordination Department.
II. Subject Departments : Planning commission have 18 subject departments they are :
1. Agricultural Department.
2. Rural and Small Scale Industries Department.
3. Irrigation and Command Area Development Department.
4. Industries and Mineral Department.
5. Transportation Department.
6. Health and Family Welfare Department.
7. Social Welfare and Nutrition Department.
8. Education Department.
9. Energy Policy Department.
10. Urban Housing and Water Supply Department.
11. Science and Technology Department.
12. Community Department.
13. Communication, Information and Broadcasting Department.
14. Indo-Japan Committees.
15. Power and Energy Department.
16. Rural Development Department.
17. Backward Community Department. 18. Secretariat.
III. Other Committees : Planning commission appointed some other committees, they are:
1. Working Groups.
2. Advisory Committees and Panels.
3. Evaluation Committees.
4. Research Committees.
IV. Programme Evaluation Organisation : This organisation is liable to evaluate the progress of plans and projects.
V. Administration : It is responsible to maintain personnel record.
Functions of Planning Commission in India
Functions of planning commission in India are :
1. Determination of Needs and Priorities : Infact it is a commission for economic planning. Planning commission is liable to determine the needs of country and also to determine national
2. To Estimate and Allocate National Resources : Planning commission is liable to estimate the available natural, physical and human resources of country. It helps in creating a base of economic planning. Another important function of planning commission is to allocate these resources according to the need and priority of country.
3. To Study Obstacles : Every economy has certain obstacles and limitation. No economic plan can be successful without considering these limitations. Planning commission is to determine these limitation and also to suggest the possible ways to overcome them.
4. Drafting of Plan : Primary function of planning commission is to draft economic plans. As a matter of fact this is the basic function for which planning commission was set up. All other functions of commission cluster around it.
5. Evaluation of Plan : Planning commission is liable to evaluate the progress of plans and projects. The commission is to determine the successes and failures of these plans and projects.
National Development Council (NDC)
Organisation of National Development Council : To guide, direct and assist planning commission in the formulation, implementation and evaluation of economic plans, this council was set up. Chief Ministers of the states, all the members of planning commission are the members of NDC, Prime Ministers of India is the ex-offico chairman of NDC.
Functions of NDC
1. To Guide, Direct and Assist Planning Commission : The main object and function of national development council is to guide, direct and assist planning commission in the formation implementation and evaluation of economic plans and projects. All the plans and projects prepared by planning commission are presented before this council, the council may accept it, modify it, or reject it, it issues necessary directions to planning commission for the purpose.
2. To Consider and Finalise the Plan : Most important function of National Development Council is to consider and finalise economic plans and projects prepared by planning commission.
3. To Review the Plan : The last and most important function of National Development Council is to review economic plan and projects. National objectives and priorities are also determined by NDC. National Development Council issues necessary guidelines to planning commission for the effective implementation of plans and projects.
Q. 3. Describe the process of drafting a five years Plan in India.
What is planning process? Explain it.
Ans. Drafting or Planning Process of Five Year Plan in India
Five years plans are drafted by process of economic planning. It have various steps. An economic model is prepared for a very-very long period, say 20 years or even more. This model guides and determines the path on which the country would be led. All the five year plans are drafted in the light of this model. Important steps involved in the process of economic planning are as follows :
1. Start of Planning Process : Planning process is started about two years before the period of plan or even a little earlier. Planning commission studies, resources available in the country, important problems of the country, important needs and priorities of the country etc. These data are provided by currency and Finance Department of RBI, Central Statistical Organisation (CSO), Institute of Public Administration of India (IPAI) etc. Wide data are collected on national product, national income, national consumption, national resources, domestic savings and capital formation etc. Micro and macro plans are drafted on the basis of these data.
2. Consideration and Acceptance by National Development Council (NDC) : Data and plans collected and drafted by planning commission are presented before NDC. The council may reject them or modify them or accept them.
3. Plans by Central and State Governments : The data and plans collected by planning commission and approved by national development council are sent to the central and state governments. These governments prepare related plans for their respective states. Different working groups are framed for this purpose and the services of different experts are invited.
4. Format Memorandum : Planning commission considers all the plans and suggestions received from central and state governments. A format memorandum is prepared on the basis of these plans. Services Of different working groups and experts are also invited and used in this process. This format is sent to central government for consideration.
5. Draft (approach paper) of Plan : Considering the suggestions of central government, a draft of plan is prepared by planning commission and is presented before National development council. The council is its meeting, consider and discuss this draft. Necessary amendments are suggested and necessary directions are issued. Such draft is called approach paper of the plan.
6. Publication of Draft (approach paper) of Plan : In accordance with the suggestions and directions of national development council, planning commission finalises the draft of plan and such draft is published for general public. Public opinions and suggestions are invited on the issue.
7. Final Draft of Plan : On the basis of opinions and suggestions collected from general public, necessary changes are made in the draft of plan and a final draft is prepared. It is presented before the council of getting approval of both the council of ministers and NDC, the final draft is published. It is presented before the parliament and accepted as five year plan for coming period after it is accepted by parliament.
Q. 4. Explain the important objects and achievements of all the five year plans in India.
Write an essay on planned economic development in India.
Ans. The planning process initiated in 1951 has been continued in this country. However because of the prevelence of liberal elements in economic and political thinking and the prevasive influence of Gandhism, no strict regulation of economic activities and economic life was possible, The first step towards planning was taken in 15 March 1950 when the government of ‘India appointed a planning commission. The planning process itself was initiated in April 1951 when the first give year plan was launched.
India s Five Year Plans
1. First Five Year Plan (1 April, 1951-31 March, 1956)
This plan was launched on 1st April 1951. It continued till 31st March, 1956.
Objectives/Aims of Plan : The objectives of first five year plan were :
(i) For rehabilitating Indian economy devasted by the efforts of second world war and partition of country.
(ii) For solving food crisis.
(iii) For checking inflationary tendencies.
(iv) To build up administratives and other organisations needed for carrying out the programmes of development.
Size and Outlay of Plan : Total investment of this (Plan was ? 3,360 crore out 1,560 crore invested in public sector and 1,800 crore in private sector.
Achievements of Plan : This plans were successful. Achievements of this plans were more than satisfactory. Its achievements were :
(i) It achieved an increase of 18% in national income during planning period (3.6% per annum) against the target of 10.5% (2.10% per annum).
(ii) Per capita income increased by 8.20% during planning period (1.64% per annum).
(iii) Some important problems like food shortage were also solved to a large extent.
2. Second Five Year Plan (1 April, 1956-31 March, 1961)
After the success of first five year plan, second five year plan was launched on 1st April 1956′ It concluded on 31 March, 1961.
Objectives/Aims of Plan : The objectives of second five year plan were :
(i) To achieve a sizeable increase in national income.
(ii) Rapid industrialisation with emphasised upon the development ofbasic and heavy industries
(iii) Reduction of inequalities in income and wealth. Size and Outlay of Plan : Total investment of this plan was 6,750 crore out of which 3,650 crore were invested in public sector and 3,100 crore in private sector.
Achievements of Plan : Achievements of this plan were :
(i) National income increased by during planning period (4% per annum) against the target of 225% (4.5% per annum).
(ii) Per capita income increased by 9.5% during planning period (1.9% per annum).
(iii) A development plan was started during this plan which gave highest priority to heavy industries and rapid development of public sector.
(iv) Three giant iron and steel plant were established at Durgapur, Bhilai and Rourkela.
(v) This plan gave due emphasis to the development of small scale and cottage industries in India.
(vi) Social service like health and education were also expanded to a great deal.
3. Third Five Year Plan (1 April, 1961-31 March, 1966)
This plan was launched on 1st April 1961 and it continued till 31st March, 1966.
Objectives/ Aims of Plan : The objectives of this plan were :
(i) To secure a rise of over 50% per annum in national income.
(ii) To achieve self-sufficiency in food grains and to increase agricultural production.
(iii) To expand basic industries and to establish machine making industries.
(iv) To increase employment opportunities substantially.
(v) To bring about a reduction in the inequalities of income and wealth.
Size and Outlay of Plan : Total outplay of third plan was 10,400 crore, 6,300 crore in public sector and 4,100 crores in private sector,
Achievements of Plan : This plan was not as successful as first two. This plan could not achieve its objectives properly because this plan run into difficulties due to adverse weather, Chinese aggression and Indo-Pak War etc.
Overall performance of the plan was rather disappointing. National income could increase only by 11.5% during this period (2.3% per annum) against the target of 28% (5.6% per annum) per capita income could increase by 0.5% only during this period (0.1% per annum).
4. Plan Holiday (1 April, 1966-1 April, 1969)
Indian economy had to face many difficulties ‘during third plan. Chinese aggression in 1962 and Indo-Pak war in 1965 placed heavy defence burden upon the economy. Severe drought of 1965—66 worened the situation further.
On June 5, 1966, government announced devaluation of rupee. Due to these adverse conditions and continuous uncertainty of foreign aid, fourth plan could not be started on its due time, i.e., 1st April, 1966. It could start only on 1st April 1969. This gap of 3 years was known as plan holiday. Three annual plans were introduced in these three years.
Size and Outlay of Plan : Main feature of annual plan was their moderate size. Total outlay over the entire period of three years was 6,626 crore.
Achievements of Plan : National income increased by 11.1% during the period (3.7 per annum) and per capita income increased by 6.3% during this period (2.1% per anuum).
5. Fourth Five Year Plan (1 April 1969-31 March 1974)
This plan was launched on. 1st April 1969 and decontinued till 31st March, 1974.
Objectives/Aims of Plan : Fourth five year plan had two main objects t.
(1) Growth with stability and progressive achievement of self-reliance. (2) Besides, this plan aimed at achieving social justice and equality and creating more employment opportunities.
Size and Outlay of Plan : Total outlay of this plan was 24,882 crore out of which 15,902 crore were for public sector and 8,980 crore for private sector.
Achievements of Plan : During the period of Fourth Five Year Plan, India faced the problems of Indo-Pak War in 1971, the inflow of ten million refugees together from bangladech and SU3Pension of foreign aid. The condition was further warsened by widespread drdught oftwo successive years, National income could increase by 16.5% during plan period (3.3% per annum) against the target of 28.5% (5.7% per annum). Per capita income increased by only 4.5% during this period (0.9% per annum).
6. Fifth Year Plan (1st April 1974-31st March 1978)
Fifth plan was commenced on 1st April, 1974. It was upto 31st March, 1979 but owing to change in government in 1977, this plan was ended on 31st March, 1978, Thus virtually, the period of this plan was curtailed to 4 years.
Objectives/Aims of Plan : Fifth plan was commenced with two broad objectives :
(a) Removal of Poverty.
(b) Achievement of self-reliance. The plan estimated that per consumption of the poorest 30% of population (17.3 crore in 1974) would rise from 25 per month in the current years to 29 atthe end of plan and to 38 in 1985—86.
Size and Outlay of Plan : Total outlay of plan was 69,300 crore. Public sector outlay was 42,300 crore and 27,000 crore was for private sector.
Achievements of Plan : Fifth plan too had as unpleasant performance. International oil crisis led to a fourfold rise in crude oil price. India was passing through a severe food shortage at that time National income increased by 24.5% during this period (4.9% per annum) against the target of 22%
(4.4% per annum). The progress was uneven as among the different years of plan. Per capita income increased by 13% during this period (2.6% per annum). An important feature of this plan was that ‘Minimum Needs Programme’ was launched with the object of providing adult education, rural health, rural water supply, rural roads, electrification, housing, assistance to rural landless workers and environment improvement of urban slums.
7. Two Annual Plans (1978-80)
In 1977, the Janta Party took over and terminated fifth five year plan in 1978, one year before its tenure. It introduced the concept of rolling plan for five years : 1978—83 but this plan could continue only for two years.
Congress government, immediately after taking over in 1980, terminated this plan and launched a new five year plan for 1980—85. Thus two years of the history of economic planning were lost without any plan due to political instability. National income increased by 3.3% in 1978 to 1979 but in 1979—80, national income declined by 6% and per capita income declined by 8.2%.
8. Sixth Five Year Plan (1 April, 1980-31 March, 1985)
This plan was launched on 1st April 1980 and continued till 31st March, 1985.
Objectives/Aims of Plan : Sixth plan had the following aims :
(i) To remove unemployment and underemployment.
(ii) To raise the standar4 of living of the poorest section of society.
(iii) To reduce inequalities of income and wealth,
(iv) To achieve measurable increase in the welfare of poor.
(v) To ensure country’s continuous progress towards self sufficiency and growth. Size and Outlay of Plan : Total outlay Of sixth plan was fixed at 1,72,210 crore, 97;500 crore for public sector and 74,710 crore for private sector.
Achievements of Plan : (i) To alleviate rural poverty, the sixth plan launched ‘Integrated Rural development programme’ (I.R.D.P). This programme has been launched with the object of raising production and productivity in agricultural and allied sectors, skill formation and skill-up-grading, facilitating adequate credit to support the programme taken for rural poor, additional employment opportunities for rural poor and providing minimum needs etc,
(ii) National Rural Employment Programme : It was also launched in sixth plan to generate employment opportunities for rural poor and providing minimum needs etc,
(iii) Sixth plan continued ‘Minimum Needs Programme’ introduced in fifth plan.
(iv) National income increased by almost 26% (5.2% per annum) during this period, just near to the target. Per capita income increased by 16% (3.2% per annum) during ‘this period.
9. Seventh Five Year Plan (1 April, 1985-31 March, 1990)
This plan was launched on 1st April, 1985 and continued till 31st March, 1990.
Objectives/Aims of Plan : The objectives of this plan were :
(i) Decentralisation of planning from state level to district level,
(ii) Maximum possible generation of productive employment.
(iii) Achievement of self-sufficiency in the production of food grains and vegetable oils.
(iv) Alleviation of It is estimated that the per cent of people living below poverty line Will be reduced from 40% at present to 10% till the end of eighth five year plan in 1995.
(v) To make sustained efforts to raise the level of social consumption
(vi) To increases the rate of literacy, particulary among women.
(vii) To reduce the bottlenecks of infrastructure.
(viii) To encourage efficiency, modernisation and competition in industry.
(ix) Conservation of energy and promotion of non-conventional sources of energy.
(x) Development of science and technology.
(xi) Ecological and environmental conservation,
Size and Outlay of Plan : Total outlay of seventh plan has been fixed at 3,48,148 crore out of which 1,80,000 crore have been fixed for public sector and 1,68,148 crore for private sector.
Achievements of Plan : The achievements of this plan were :
(i) This plan could achieve success than targets. There was a target of 25% orowth (5% per annum) in national income actual growth of nationalincome had been 27.5% (5.5 per annum).
(i) Per capita income could grow by 17% (3.4 per annum).
(iii) Jawahar Rojgar Yojna (JR. Y.) was !aunched to eliminate the problem of unemployment.
(iv) Great incentives were allowed for the IA omotion and growth of small scales and cottage industr’ies.
(v) Several important decisions were taken to increase the competitives of Indian economy.
10. Two Annual Plans (1990—91 and 1991—92)
Eighth five years plan was to be launched on Isl April, 1990 bilt due to political changes and uncertainties, this plan had to be postponed for two years. Two annual plans had to be adopted for these two years (1990—91 and 1991—92). Investrnent in these two plans had beer 61,518 and 72,316 crore respectively.
11. EightFive Year Plan (1 April, 1992-31 March, 1997)
This plan was launched on 1st April, 1992 and continued till 31 March, 1997.
Objectives/Aims of Plan : The objectives of this plan were :
(i) Generating employment to achieve near full employment by the turn of the century.
(ii) Containing population growth.
(iii) Universalization of elementary education.
(iv) Provision of safe drinking water and primary health care’;
(v) Growth of agriculture.
(vi) Strengthening infrastructure.
Outlay of Plan : Total outlay of plan was fixed a 7,98,000 crore (45.2% for public sector and 54.8%) for private sector.
Achievements of Plan : The achievements of this plan were :
1. Domestic savings to be 23.7% of GDP.
2. Investment to be 25% of GDP.
3. Growth of GDP at 5.9% per annum.
4. Growth of export at 11.4% per annum.
5. Growth of imports at 13.6%.
6. ICOR at 4.25%,
7. Current account deficit at 1.3% of GDP.
8. 3.5% per annum growth in agriculture sector, 7.24% in industrial sector and 6.66% in service sector.
12. Ninth Five Year Plan (1 April, 1997-31 March, 2002)
This plan was launched on 1 April, 1997 and continued till 31 March 2002.
Objectives/Aims of Plan : The objectives of this plan were :
(i) Development of expansion of infrastructural facilities in the country.
(ii) Development of social overheads like education, health, light, water, housing etc.
(iii) Upliftment of poor sections of society.
(iv) Promotion of export-oriented units.
(v) Decentralisation of power.
(vi) More participation states in formulation and implementation of plans.
(vii) Priority to agriculture development with a view to generate adequate productive development and eradiction of poverty.
(viii) Ensuring food and nutritional security for all.
(ix) Provide basic minimum services of safe drinking water, shelter and connectivity to all.
(x) Containing the growth of population.
Outlay of Plan : Ninth plan proposed public sector outlay 8.59,200 crore to generate a growth rate of 6.5%.
Achievement of Plan : The achievements of this plan were :
(i) Rate of GDP growth dropped to 5.35%.
(ii) Rate of saving turned out to be 23.3% of GDP.
(iii) Exports increased by 5.6% and imports increased by 4.1%.
(iv) ICOR went upto 4.53.
13. Tenth Five ‘Year Plan (1 April, 2002 – 31 March, 2007)
This plan was launched on I April 2002 & continued till 31 March 2007,
Objectives/Aims of Plan : The objectives cf this were
(i) Reduction of poverty ratios by 596 pojnts.
(ii) Gainful employment to the addition to the force,
(iii) Universal access to primary education-
(iv) Reduction in the rate of population
(v) Increased in literary ratio to
(vi) Reduction of Infant Mortality Rate (IY/IR) to
(vii) Reduction of Maternal Mortalitv Rate to 2’77,
(viii) Increased in forest and there cover to 257%.
(ix) To achieve a growth rate of
(x) Expansion of economic and social all,
Tenth plan proposed sector outlav of 15992.300 crore.
Q. 5. Write a detailed note on tenth five year plan.
Ans. Tenth Five Year Plan (1 ApriU 2002-31 March, 2007)
Tenth five year plan was launched on 1 Aprul$ 2002 continued tjJJ 31 March, 2007, ‘I’his plan has been prepared in the background of high expectation.
Following positive aspects of Indian are providing bate for plan :
(i) India is one of the ten most developing the development of India is highest among developing countries –
(ii) Population growth has decelrated below 2–71 for the first time in four
(iii) Literary ratio has increased 52.2173 1991 to jn 2001,
(iv) Growth of software services and IT IS creating confidence about the competitivener of Indian Economy.
Following negative aspects of Indian economy are creating hindrances jn t//37 of plan
(i) Growth in the development of employment opportunities has been disappointing,
(ii) There is an acute problem of power and fuel. About of rural and 200/0 of urban household do not have a power connection.
(iii) Problem of land and forest degradation could not be controlled, It has created a threat to the sustainability of food production.
(iv) Infant mortality rate has stagnated at 7.2 for last several year s.
(v) Civic amenities have also not recorded target growth,
Reform Plan : It has been decided that our country must draw up a reform plan instead of Merely having a resource plan important decisions in this respect are as under
(i) Government must play .11 key role in social sector, infrastructural development and rural Development.
(ii) Economic policies and plans must create an atmosphere ‘Which rn;j7 promote indutstrial development.
(iii) Private sector must come or play key role in the development of tejecommunication,
power and fuel, ports etc.
(iv) Transpamncy responsibility co-operation must be the of economy. On the other hand, if the rate of growth terms out to be 6.5% per annum, the percentage of unemployed at the end of the plan is expected to go up to giving a total unemployed labour force of 45.55 million person years. This is a grim situation indeed.
6. Unrealistic export target. While the realised export growth rate in the ninth Plan was only 5.6% per annum, the tenth plan targets an export growth rate of as high as 12.4% per annum This again, is a highly unrealistic target. For achieving this rate of growth, agricultural exports are expected to increased by around 9.0% per annum. ‘This, in turn, is contingent upon achieving a 4.0% per annum rate of growth in agriculture. In many manufactured exports, India faces quality and price disadvantages Vis-a-vis its competitors like China. Moreover despite the WTO mandate the developed countries continue to impose restrictions on a number of good exported by the developing countries.
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