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). With the prime minister as the ex-officio chairman, the commission has a nominated deputy chairman, who holds the rank of a cabinet minister. The first year plan was Harrod – Domar model of development economics. FYP had a target of 2.1% PA growth in national income. Top priority was given to the development of agricultural sector. The idea was agricultural development would lead to higher rate of economic growth.
FIRST PLAN (1951-1956)
Based on Harrod-Domar model. There were arrival of large number of refugees, severe food shortage and mounting inflation confronted the country at the onset of the first five year plan. High priority was given to agriculture, price stability, power and transport. It was a successful plan primarily because of good harvest in the last two years of the plan. Objectives of normal life of refugee, food self-sufficiency and control of prices were more or less achieved. The target growth rate was 2.1 and actual growth rate achieved was 3.7.
SECOND PLAN (1956-61)
Second plan was prepared by Prof. P.C. Mahalanobis. It has s also called Mahalanobis plan. Second plan was conceived in an atmosphere of economic stability. The plan was focused on rapid industrialization by setting up of heavy and basic industries. Importance was given to the public sector. The industrial policy was based on establishment of a socialistic pattern of society as the goal of economic policy. The target growth rate was 4.5 and the actual growth rate achieved was 4.3.
THIRD PLAN (1961-1966)
When this plan was started it was felt that Indian economy has entered a “takeoff stage”. Therefore it’s aim was to make India a self-reliant and self- generating economy. Based on the experience of first two plans, agriculture was given top priority to support the the exports and industry. The plan was thorough failure in reaching the targets due to Chinese aggression (1962), Indo-Park (1965), severe drought (1965-66), food shortage, inflation and adverse balance of payments, Devaluation of the rupee happened in 1966. The target growth rate was 5.6 and the actual growth rate achieved was 2.8.
ANNUAL PLANS (1966-69)
Failure of Third plan and that of the Devaluation of rupee along with inflationary recession led to postponement of fourth FYP. Three annual plans were introduced instead. During the Annual plan a whole new agricultural strategy called the High Yielding Variety Program also known as Green Revolution was implemented.
FOURTH PLAN (1969-74)
The main objective of the fourth plan was “growth with stability” and “progressive achievement of self- reliance. First two years of the plan saw record production. The plan was to improve the standard of living of the weaker sections of the society through employment programmes. The target growth rate was 5.7 and the actual growth rate achieved was 3.3.
FIFTH PLAN (1974-79)
The fifth plan was prepared and launched by D.P. Dhar in the backdrop of economic crisis arising out of run-away fuelled by hike in oil prices and failure of the Government takeover of the wholesome trade in wheat. The two main objectives of this plan is ‘removal of poverty’ (Garibihatao) and ‘attainment of self-reliance’. But due to high inflation, cost calculations for the plan proved to be completely wrong. The target growth rate was 4.4 and the actual growth rate achieved was 4.8.
ANNUAL PLANS (1978-80) AND HINDU RATE OF GROWTH
There were two annual plans 1978-79 and 1978-80. The objectives of first plan were removal of unemployment and provision of basic necessities of drinking water, primary education and health care. Second plan was focused on the rural sector with importance accorded to agriculture.
The phrase Hindu rate of growth, economist Raj Krishna who used it to describe India’s unsatisfactory growth trend in 1950-80 was stuck at 3.5 to 4 per cent per year. The word ‘Hindu’ was used to refer the inactive growth rate of Indian economy.
SIXTH PLAN (1980-85)
The plan was focused in national income and modernization of technology. Sixth plan was considered as success as most of the target were realised even though during the last year (1984-1985) many parts faced severe famine conditions and agricultural output was less than the record output of previous year. The target growth rate was 5.2 and the actual growth rate achieved was 5.7.
SEVENTH PLAN (1985-90)
The plan aimed at accelerating food grain production, increasing employment opportunities and raising productivity with focus on food, work and productivity. The plan was successful. The target growth rate was 5 per cent and the achieved growth rate was 6.
ANNUAL PLAN (1990-92)
The eight plan was postponed by two years because of political uncertainty at the centre. The focus of the plans was to increase employment opportunities and social transformation.
EIGHTH PLAN (1992-97)
There was issues during the launch of plan were Worsening Balance of Payment position, rising debt burden, widening budget deficits, recession in industry and inflation. The plan undertook drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6 percent under Prime Minister of Shri P V Narasimha Rao. The annual growth rate was 6.5 per cent and the achieved growth rate was 34 percent.
NINTH PLAN (1997-2002)
The plan prepared under United Front Government focused on “Growth with Social Justice and Equality”. The plan aimed to demand predominantly on the private sector, India as well as foreign (FDI). It assigned priority to agriculture and rural development with a view to generate productive employment and eradicate poverty. The target growth rate was 6.5 and the actual growth rate achieved was 5.4.
TENTH PLAN (2002-2007)
Other than the economical growth, tenth plan had set “monitorable targets” in reduction in gender gaps in literacy and wage rate, reduction in infant and maternal mortality rates, improvement in literacy, access to potable drinking water cleaning of major polluted rivers. The target growth rate was 8.0 and the actual growth rate achieved was 7.6.
ELEVENTH PLAN (2007-2012)
Eleventh Plan was aimed “Towards Faster and More Inclusive Growth”. The vision of Eleventh Plan included several inter related components like rapid growth reducing poverty and creating employment opportunities. Access to essential services in health and education, specially for poor, extension of employment opportunities using National Rural Employment Guarantee Programme, environmental sustainability and reduction of gender inequality. Its growth rate was 8.1 per cent but it achieved only 7.9 per cent.
TWELFTH FIVE YEAR PLAN (2012-2017)
The Twelfth Plan commenced at a time when the global economy was going through a second financial crisis. This crisis affected all countries including India. Growth rate slowed down to 6.2 per cent. Therefore the plan emphasizes that the first priority must to bring economy back to rapid growth in all fields. The aim was bring back economic growth faster, more inclusive and with sustainable growth. The target growth rate was 8.0
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 would have been 2017–2022. However, there is no Thirteenth Five-Year Plan.