Profile
Settings
Refer your friends
Sign out
If you look at the history of the first five year plan in India, The Union of Soviet Socialist Republics’ first five-year plan was designed to kickstart quick and large-scale industrialization across the country (USSR). When Harry Byers first stepped foot in the Soviet Union, the plan began on October 1st, 1928, and was already in its second year.
It was established in 1951 with a particular focus on developing the agricultural sector. With a few tweaks, India’s First Five Year Plan in India was based on the Harrod–Domar model. Jawaharlal Nehru was president of this five-year plan, while Gulzarilal Nanda was the vice-president.
First Five Year Plan in India
On July 9, 1951, India’s first Prime Minister, Jawaharlal Nehru, delivered the First Five-Year Plan to the Indian Parliament. Five-Year Plans were a formal planning model established by the Indian government to ensure efficient and balanced resource utilization.
The Planning Commission of India, created on March 15, 1950, formulated these. The Commission reported directly to the Prime Minister because it was not a constitutional entity, and its first Chairman was Nehru himself.
The Commission was tasked with improving the country’s standard of living by properly allocating resources, increasing output, and ensuring that everyone has access to work opportunities.
The Second Five Year Plan
The Second Plan prioritized public sector development and “rapid industrialization.” The design was based on the Mahalanobis model, devised in 1953 by Indian statistician Prasanta Chandra Mahalanobis. The strategy aimed to determine the optimal investment allocation amongst productive sectors to improve economic growth.
It made use of cutting-edge operations research and optimization techniques and unique applications of statistical models created by the Indian Statistical Institute. The strategy anticipated a closed economy, with capital goods imports serving as the primary source of trade. Since the Second Five-Year Plan, there have been a concerted effort to replace basic and capital goods industries.
With the support of the Soviet Union, Britain (the U.K.), and West Germany, hydroelectric power plants and five steel plants were built in Bhilai, Durgapur, and Rourkela, respectively. The amount of coal produced has grown. In the northeast, other railway lines were added.
As a research institute, the Tata Institute of Fundamental Research and the Atomic Energy Commission of India was founded. A talent search and scholarship program was started in 1957 to locate exceptional young students who could be trained for the nuclear power industry.
In India, the Second Five-Year Plan provided a total of Rs. 48 billion in funding. Power and irrigation, social services, communications and transportation, and miscellaneous were among the sectors to get funding. An era of rising prices was the second strategy. The country was also in the midst of a currency crisis. The significant increase in population hampered the increase in per capita income.
The target growth rate was 4.5%, and the actual growth rate was 4.27%.
Last Five Year Plan
2012-2017 was the last five year plan as 2017-2022 did not refer to as a formal five year plan for economic growth.
The Government of India’s Twelfth Five-Year Plan was set to reach a growth rate of 9%, but the National Development Council (NDC) accepted an 8% growth rate for the Twelfth Plan on December 27, 2012.
The plan intends to improve the nation’s infrastructure projects while preventing bottlenecks of any kind. The paper provided by the planning commission aims to attract private investments of up to $1 trillion in infrastructure growth in the 12th five-year plan and a reduction in the government’s subsidy burden to 1.5 percent of GDP from 2%. (gross domestic product). The UID (Unique Identification Number) will serve as a platform for cashing out the plan’s subsidies.
The objectives of the Twelfth Five-Year Plan were:
- To create 50 million new jobs in the non-agricultural economy.
- To eliminate the gender and socioeconomic disparities in school enrollment.
- To make higher education more accessible.
- Malnutrition in children aged 0–3 years is to be reduced.
- All settlements will have access to power.
- Fifty percent of the rural population must have access to safe drinking water.
- Every year, expand green cover by 1 million hectares.
- Ninety percent of households will have access to banking services.
Conclusion
Why did we need a five year plan in India? Rather than relying on market forces, the objective was to design public expenditures for equitable growth. The Five-Year Plans were crucial in improving India’s social sector and establishing heavy industries. A unified planning system could ensure that funds are allocated to the most pressing needs.
Because of the top-to-bottom approach to centralized planning, it was felt that states needed more say in how they spent their money. The Planning Commission was accused of imposing its will on states that knew better what they needed and how much they required.
