At least once in your history or political science textbooks, you have come across the five-year plan topic. It is very important to know what a five-year plan is if you want to understand India’s economic history.
The Five-year plan was an economic initiative drafted by India’s first Prime Minister, Jawaharlal Nehru. This economic plan was implemented to make better use of India’s resources, better the economic condition, and prosper in trading and agricultural income. The first five-year plan was implemented in April 1951 and lasted till March 1956. Its main objective was to maximize India’s per capita and individual income rate.
A five-year plan is a unique step taken by our nation’s leaders right after independence. After we gained freedom from atrocious British rule, the first Indian constitution was formed and came into action on 26th January 1950. All the constitution members, along with our then Prime Minister Jawaharlal Nehru, came up with the famous Five-year Plan in the following year of 1951. The plan was drafted to better India’s economic condition, which was not in good condition, given the newfound freedom and change of government.
India was going through all kinds of social, political, and economic changes. The country faced turmoil and chaos after independence. The economy was running low, the trades and industries were lagging, and even all the labor was becoming inefficient.
In a time like this, the nation makers and the founders of a new constitution came up with a strategy that would not only save India from ruin but also bring her to prosper.
The first five-year plan came into force in April 1951 and was active till March 1956. It was an economic plan for the benefit of the country. The plan was formulated by the constitution and overseen by the Planning Commission – a body under the Indian government.
First Five-year plan
The first five-year plan was presented and implemented by Jawaharlal Nehru, India’s first Prime Minister. It was launched in 1951, and its objective was to uplift the economic condition of India by mainly focusing on improving the standard of the primary sector. By India’s primary sector, we mainly mean agriculture, as it has been the most powerful source of the country’s income.
The first five years (1951 – 1956) plan was drafted by the economist K.N Raj and was based on the Harrod-Domar model – a Keynesian model of an economic plan. The plan was to save more of India’s capital for bigger future investments and low capital investment in the meantime with a more efficient growth rate and income.
The plan aimed to achieve 2.1 % GDP growth that year but ended up growing up to 3.6 %. This success in the initiation of the plan made India believe in it. The first five-year plan wanted to make sure that India becomes self-sufficient, economically strong and thrives in its primary sectors of growth.
Objectives of the First Five Year plan
The foremost objective of the first five years (1951 – 1956) was to develop and better the agricultural sector of India. Its primary focus was on how to attain agricultural development, handle the refugees’ situation, and grow self-sufficiency. The following are some of the first five year facts that it tried to achieve
- The plan aimed to save as much capital as possible for bigger projects in future.
- To increase per capita income.
- To improve the primary sectors’ overall efficiency.
- To produce more.
- To lessen the dependency on foreign exchanges.
- To provide employment.
- To render shelters and food supplies for the refugees.
- To control output investments and focus on generating inward capital.
- To rehabilitate the landless farmers.
- To control inflation .
The success of the First Five Year Plan
The first five-year plan was quite a success, according to growth analysis. When the plan was only aiming to achieve a growth of 2.1% GDP, the growth reached up to 3.6%, leading to a huge economic development that India had not seen for years.
There was an improvement not only in the primary sectors of agriculture and irrigation, but also there was price stability, lesser inflation, growth in capital income, better employment chances, and self-sufficiency. The first five year facts also looked into health, infant mortality, transport, technology, and medical science, which witnessed a change in these years.
At the end of the first plan, in 1956, India witnessed a total of 5 inaugurations of new technical institutions named the Indian Institutes of Technology. The University Grants Commission (UGC) funded these incredible academic institutions to see India and its students prosper and achieve higher education.
Though the first five-year plan was successful in many aspects, the plan lacked in some of the parts too. The overall poverty and deprivation rate did not improve by a higher difference. The technological and scientific achievement remained held back due to minimal resources and ignorance in scientific advancement.
A section of the class was still hungry and unfed. The Indian economy, though a little improved, was very far from its fellow nations. Employment and education had still more to improve and enhance.