Five year Plans & NITI Aayog

Five year plans in India

1^st  five year plan-1951-56

• The first five year plan was launched in April 1951.

• The First Plan (1951-56) was based on Harrod-Domar growth model which was developed independently by Roy F. Harrod and Evsey Domar.

• The Harrod-Domar economic growth model stresses the importance of savings and investment as key determinants of growth. 

• The Harrod–Domar model is a Keynesian model of economic growth.

Targeted Growth -2.10%

Actual Growth- 3.60%

Objectives and focus-

• To reconstruct the damaged economy after World War and partition.

• The Plan Focussed on agriculture, price stability, power and transport.

• To take the effectiuve measures related to food problems,Inflation and pressure of refugees on Indian economy

Achievements-

• Achieved growth was more than the target.

• Five Indian Institutes of Technology (IITs) were established

2^nd Plan(1956 - 61)(Mahalanobis plan)

• Similar to the first plan, this plan was developed on the basis of the Harrod-Domar model.

• This plan was authored by P C Mahalanobis and hence it is also known as the Mahalanobis plan

Target Growth- 4.5%

Actual Growth- 4.3%

Objectives and focus-

• The Plan Focussed on rapid industrialization- heavy & basic industries.

• The Industrial Policy 1956 was launched for enhancing industrial sector on socialist model.

Achievements-

• Plan could not be implemented fully because of acute shortage of foreign exchange.

• But it was able to enhance import of capital goods ,Increase of coal production,beginning of industrial development in the country.

3^rd Plan (1961-66)

• It was based on the work of Pant and Little in Perspective Planning Division (PPD) of Planning Commission.

• Manne and Rudra (1965) prepared a consistency model for India's Fourth Five Year Plan

Target Growth- 5.6%

Actual Growth- 2.8%

Objective and focus-

• Based on the experience of first two plans agriculture was given top priority to support the exports and industry.

• Its main focus was a 'self-reliant' and 'self-generating' economy

Achievements-

• The Plan was thorough failure in reaching the targets due to unforeseen events - Chinese aggression (1962), Indo-Pak war (1965), severe drought 1965-66

Three Annual Plans/Plan Holiday(1966-69)-

• Three Annual Plans were introduced due to failure of previous plan and agricultural and other economic crisis at that time.

• The government established three yearly plans known as Plan Holidays from 1966 to 1967, 1967-68, and 1968-69.

Focus and Objectives-

• Due to Prevailing crisis in Agricultural sector ,The agriculture was given prime focus during these plans.

4^th Plan(1969-74)-

Target Growth- 5.7%

Actual Growth- 3.3%

Focus and Objectives-

• It had twin objectives of “ growth with stability “ and “progressive achievement of self reliance ".

• Implementation of Family Planning Programmes were amongst major targets of the Plan.

Achievements-

• Provision of National Minimum Guarantee for weaker sections of the community- “Garibi Hatao”.

• Nationalisation of 14 Banks (1969) was done.

• Green Revolution was implemented.

• Overall- Due to Indo-Pak War 1971 (For Bangladesh Separation) resulted in influx of large refugees which along with other reasons led to failure of this plan.

5^th Plan(1974-79)-

• The final Draft of fifth plan was prepared and launched by D.P. Dhar.

Target Growth- 4.4%

Actual Growth- 4.8%

Focus and Objectives-

• It proposed to achieve two main objectives: 'removal of poverty' (Garibi Hatao) and 'attainment of self reliance'.

• Employment generation, Poverty reduction, self -reliance in agro products and defence etc. Were some of the objective

Achievements and Overall Assessment-

• Due to Emergency in 1975 and miscalculation of economic parameters this plan was also a failure.

• In 1975, the Electricity Supply Act was passed, allowing the Central Government to overcome the threshold of electricity generation and transmission.

• There was shift of focus towards 20 point programme from this plan.

• This plan is terminated by Janata party in 1978 (Morarji Desai) and they introduced rolling plans (1978-80).

Rolling Plan (1978 - 80)-

• This plan is also called as 1^st Sixth year five year plan.

• Janta Govt. put forward a plan for 1978- 1983 emphasising on employment, in contrast to Nehru Model which the Govt criticised for concentration of power, widening inequality & for mounting poverty .

• However, the government lasted for only 2 years.

• Congress Govt. returned to power in 1980 and launched a different plan aimed at directly attacking on the problem of poverty by creating conditions of an expanding economy.

6^th Plan(1980-85)-

• This plan is also called as 2^nd Sixth five year plan.

Target Growth- 5.2%

Actual Growth- 5.7%

Focus and Objectives-

• Its focus was Poverty reduction, higher growth rate, removal of unemployment , improved productivity , modernization of technology and significant reduction in economic diparities  through schemes for transferring skills(TRYSEM).

Achievements and Overall Assessment-

• Nationalization of 6 Banks were there.

• As actual growth achieved was more than the Target therefore this plan was considered as success.

7^th Plan(1985 - 90)-

Target Growth- 5.0%

Actual Growth- 6.0%

Focus and Objectives-

• Accelerate food grains production, increase employment opportunities and raised productivity.

• Therefore we can say that its broad focus was Food,Work and Productivity.

Achievements and Overall Assessment-

• Overall this plan was successful because actual growth was 20% more than the targeted growth. Actual growth was 6% against the targeted growth of 5%

Plan Holiday (1990-92)

• Due to political instability at that time the five year plans were postponed by 2 years.

• Due to the rapidly changing economic circumstances at the center, the Eighth Plan was unable to launch in 1990, and the years 1990–91 and 1991–92 were considered as Annual Plans.

8^th plan(1992-97)-

• During this time there was some economic issues like Balance of paymengt crisis ,rising debt and increasing inflation etc.

Target Growth- 5.6 %

Actual Growth -6.8%

Focus and Objectives-

• Overall economic reforms and growth,improved quality of leaving ,Increasing Import and Exports etc. Were some of the focus of this plan.

• Liberalization , Privatization and Globalization I.e. LPG reforms were initiated under the Prime Ministership of Shri P V Narasimha Rao

Achievements and Overall Assessment-

• This plan saw highest annual growth rate so far I.e. 6.8 %.

• High growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit was there.

9^th Plan(1997-2002)-

Target Growth- 6.5%

Actual Growth- 5.4%

Focus and Objectives-

• This plan was mostly an extension of the eighth plan.

• It focused on safe drinking water, PHC facilities, UPE, shelter and connectivity etc.

• This plan focused on depending predominantly on the private sectors of India as well as foreign (FDI).

• It focused on social sector viz education, health, etc.

Achievements and Overall Assessment-

• Although it didn’t achieved high growth rate as that of previous plans but its still achieved most of the targets.

10^th Plan (2002-2007)-

Target Growth - 8 %

Actual Growth - 7.6 %

Focus and Objectives-

• Tenth Plan had set ‘monitorable targets’ for few key indicators (11) of development.

• Reduction in poverty to 5% by 2007 and 15% by 2012.

• Reduction in population, Reduction in infant mortality rate - 45 by 2007 and 28 by 2012

Some of the objectives were- 

• High quality employment.

• Reduction in poverty etc.

Achievements and Overall Assessment-

• It was successful in lowering the poverty rate by 5%.

• Involvement and role of Pachayati raj institutes were increased.

11^th Plan(2002 - 2007)-

Target Growth - 9 %(Agriculture-4%)

Actual Growth - 8 %

Focus and Objectives-

• Eleventh Plan was aimed “Towards Faster & More Inclusive Growth “.

• Rapid growth that reduces poverty and creates employment opportunities.

• Extension of employment opportunities using National Rural Employment Guarantee Programme (NREGP).

• Reduction of gender inequality.

• To boost agricultural, industrial, and service growth rates to 4%, 10%, and 9%.

Education-

• Reduction in drop out 52.2 % in 2003-04 to 20% by 2011-12.

• Increasing literacy to 85%.

Health-

• Infant mortality 28 by 2011-12.

• To achieve Maternal mortality 1 per 1000.

• Clean drinking water to all by 2009.

Infrastructure-

• Electricity connection to all by 2009 Road connection to all by 2009.

• It focused on all major sections and sectors of the economy.

Twelfth Plan (2012-17)-

Targeted growth rate- 8%

Raising agriculture output to 4 %

Manufacturing sector growth to 10 %

Actual growth for the five years were-

• 5.1% (2012-13), 6.9% (2013-14), 7.2% (2014-15), 7.6% (2015-16), 7.1% (2016-17) respectively.

Objectives and Features-

• Its theme and focus was “faster, sustainable and more inclusive growth”.

• Increase mean years of schooling to seven years by 2017.

• Adding 30,000 MW of renewable energy capacity.

• Reducing the emission intensity of GDP to 20-25% by 2020.

• It focuses on all major sectors like Poverty and employment ,Education,Health,Infrastructure, Including Rural Infrastructure etc.

Achievement and Failure of Economic Planning

A.Achievements of Economic Planing

• Creation of Infrastructure.

• Increase in National Income and Per Capita Income.

• Development of Agriculture and Industrial sector.

• Development of Transport and communication.

• Increase in Employment and Investment.

• Development of Science and Technology.

• Enhanced and strengthened the Import and Export of the country.

B.Failure of Planing in India

• Increasing rate of unemployment in India.

• Failure to Remove Poverty and Inequality completely.

• Failure to Curtail Corruption and Black Money.

• Poor level of implementation of some of the schemes.

• Growing deficit in Balance of Payments.

• Rise in price level of Basic commodities.

NITI Aayog-

• The National Institution for Transforming India (NITI Aayog) was founded by a Union Cabinet decision on January 1, 2015.

• It is a non-statutory, extra-constitutional advisory council.

• It is supported by an attached office, Development Monitoring and Evaluation Organisation (DMEO), a flagship initiative, Atal Innovation Mission (AIM) and an autonomous body, National Institute of Labour Economics Research and Development (NILERD)

Composition of NITI aayog-

Chairperson-

•  Prime Minister

Vice-Chairperson-

• To be appointed by Prime-Minister

Governing Council-

• Chief Ministers of all states and Lt. Governors of Union Territories.

Regional Council-

• To address specific regional issues, Comprising Chief Ministers and Lt. Governors Chaired by Prime Minister or his nominee.

Adhoc Membership-

• 2 member in ex-officio capacity from leading Research institutions on rotational basis.

Ex-Officio membership-

• Maximum four from Union council of ministers to be nominated by Prime minister.

Chief Executive Officer-

•  Appointed by Prime-minister for a fixed tenure, in rank of Secretary to Government of India.

Special Invitees-

• Experts, Specialists with domain knowledge nominated by Prime-minister.

Objectives of NITI aayog-

• To evolve a shared vision of national development priorities, sectors and strategies with the active involvement of States.

• To foster cooperative federalism through structured support initiatives and mechanisms with the States.

• To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.

• To focus on areas that are interests of national security.

• To pay special attention to vulnerable sections of the society.

• To design strategic and long-term policy and programme frameworks and initiatives, and monitor their progress and their efficacy.

• To provide advice and encourage partnerships between key stakeholders and national and international like-minded think tanks etc.

• To create a knowledge, innovation and entrepreneurial support system.

• To offer a platform for the resolution of inter-sectoral and inter departmental issues.

• To actively monitor and evaluate the implementation of programmes and initiatives.

• To focus on technology upgradation and capacity building for implementation of programmes and initiatives.

Features of NITI aayog-

NITI Aayog’s entire gamut of activities can be divided into four main heads:

• Policy and Programme Framework.

• Cooperative Federalism.

• Monitoring and Evaluation.

• Think Tank, and Knowledge and Innovation Hub

NITI aayog's Hub

NITI Aayog’s creation has two hubs –

A.Team India-

•  It leads the participation of Indian states with the central government.

B.The Knowledge and Innovation Hub-

• It builds the institution’s think tank capabilities.

Seven Pillars of Effective Governance of NITI aayog

Pro-people: to fulfill the aspirations of society as well as individuals

Pro-activity: in anticipation of and response to citizen needs

Participation: involvement of the citizenry

Empowering: Empowering, especially women in all aspects

Inclusion of all: inclusion of all people irrespective of caste, creed, and gender

Equality: Providing equal opportunity to all especially for youth

Transparency: Making the government visible and responsive

Diffrence between NITI aayog and Planing commission

Important One Liner Questions and answers on Five year plans .

Which growth model was used in the First Five Year Plan?

The Harrod-Domar growth model was used in the First Five Year Plan.

What are the key determinants of growth according to the Harrod-Domar model?

The Harrod-Domar model stresses the importance of savings and investment as key determinants of growth.

What type of economic growth model is the Harrod–Domar model?

The Harrod–Domar model is a Keynesian model of economic growth.

What was the targeted growth rate in the First Five Year Plan?

The targeted growth rate in the First Five Year Plan was 2.10%.

What is the Mahalanobis plan?

The Mahalanobis plan is the Second Five Year Plan authored by P C Mahalanobis.

What was the focus of the Second Five Year Plan?

The Second Five Year Plan focused on rapid industrialization, heavy & basic industries. The Industrial Policy 1956 was launched for enhancing the industrial sector on a socialist model.

What was the main focus of the Third Five Year Plan?

The main focus of the Third Five Year Plan was a 'self-reliant' and 'self-generating' economy. Agriculture was given top priority to support exports and industry.

Why did the Third Five Year Plan fail to reach its targets?

The Third Five Year Plan failed to reach its targets due to unforeseen events such as the Chinese aggression in 1962, the Indo-Pak war in 1965, and severe drought in 1965-66.

What were the Three Annual Plans or Plan Holidays?

The Three Annual Plans were introduced due to the failure of the previous plan and agricultural and other economic crises at that time. The government established three yearly plans known as Plan Holidays from 1966 to 1967, 1967-68, and 1968-69.

What was the main focus of the Eighth Five-Year Plan (1992-1997)?

The main focus of the Eighth Five-Year Plan was to achieve a sustainable growth rate of 6.5% per annum while also making substantial investments in human development and promoting social justice.

What was the target growth rate of the Ninth Five-Year Plan (1997-2002)?

The target growth rate of the Ninth Five-Year Plan was 7%.

What was the focus of the Tenth Five-Year Plan (2002-2007)?

The Tenth Five-Year Plan had a three-pronged approach to development, which focused on generating faster economic growth, promoting social sector development, and bridging the regional divide. The plan aimed to achieve an annual average growth rate of 8%.

What were the key objectives of the Eleventh Five-Year Plan (2007-2012)?

The Eleventh Five-Year Plan aimed to achieve a high and inclusive growth rate of 9%, with a focus on reducing poverty, improving infrastructure, increasing agricultural productivity, and promoting social sector development.

What was the main focus of the Twelfth Five-Year Plan (2012-2017)?

The Twelfth Five-Year Plan aimed to achieve a faster, sustainable, and more inclusive growth rate of 8%, with a focus on promoting social sector development, improving infrastructure, and enhancing human development.

Which Five-Year Plan was focused on the development of small-scale industries and rural areas?

The Sixth Five-Year Plan (1980-85) was focused on the development of small-scale industries and rural areas, with a focus on poverty reduction and increasing employment opportunities in rural areas.

Which Five-Year Plan aimed to achieve the goal of "Garibi Hatao" (eradication of poverty)?

The Fifth Five-Year Plan (1974-1979) aimed to achieve the goal of "Garibi Hatao" (eradication of poverty) by emphasizing employment generation, poverty reduction, self-reliance in agriculture, and defense.

One Liner on NITI Aayog.

What is NITI Aayog?

NITI Aayog is a non-statutory, extra-constitutional advisory council founded on January 1, 2015, to provide policy and programme support to the government of India.

Who is the Chairperson of NITI Aayog?

The Chairperson of NITI Aayog is the Prime Minister of India.

Who is the Vice-Chairperson of NITI Aayog?

The Vice-Chairperson of NITI Aayog is appointed by the Prime Minister of India.

Who are the members of the Governing Council of NITI Aayog?

The members of the Governing Council of NITI Aayog are the Chief Ministers of all states and Lt. Governors of Union Territories.

What is the Regional Council of NITI Aayog?

The Regional Council of NITI Aayog is a council to address specific regional issues, comprising Chief Ministers and Lt. Governors, chaired by the Prime Minister or his nominee.

What is the Adhoc Membership of NITI Aayog?

The Adhoc Membership of NITI Aayog includes two members in an ex-officio capacity from leading research institutions on a rotational basis.

Who are the Ex-Officio Members of NITI Aayog?

The Ex-Officio Members of NITI Aayog are a maximum of four members from the Union council of ministers, nominated by the Prime Minister of India.

Who is the Chief Executive Officer of NITI Aayog?

The Chief Executive Officer of NITI Aayog is appointed by the Prime Minister of India for a fixed tenure, in the rank of Secretary to the Government of India.

What are the four main heads of NITI Aayog’s activities?

The four main heads of NITI Aayog’s activities are Policy and Programme Framework, Cooperative Federalism, Monitoring and Evaluation, and Think Tank, and Knowledge and Innovation Hub.

What is Team India in NITI Aayog?

Team India in NITI Aayog leads the participation of Indian states with the central government.

What is the Knowledge and Innovation Hub in NITI Aayog?

The Knowledge and Innovation Hub in NITI Aayog builds the institution’s think tank capabilities.

What are the seven pillars of effective governance of NITI Aayog?

The seven pillars of effective governance of NITI Aayog are Pro-people, Pro-activity, Participation, Empowering, Inclusion of all, Equality, and Transparency.

What is the difference between NITI Aayog and Planning Commission?

NITI Aayog is an advisory body, whereas the Planning Commission was an extra-constitutional body. NITI Aayog follows a ‘Bottom-Up’ approach of Planning, whereas the Planning Commission followed a ‘Top-Down’ approach.

Who appoints the Secretary/CEO of NITI Aayog?

The Secretary/CEO of NITI Aayog is appointed by the Prime Minister of India.