Five Year Plans of India:

First Five Year Plan (1951-56):

1. This plan was based on the Harrod-Domar model.

2. This plan emphasized towards improvement in agriculture productions, irrigation, price
stability, power and transport.
3. This plan proved a success as agriculture production increased dramatically.
4. Major dam projects of Bhakra-Nangal, Hirakud and Mettur dam were started during this
plan period.
5. By the end of this plan period, in 1956, five Indian Institutes of Technology (IIT) were also
started.
6. Community Development Projects was started.

Second Five Year Plan (1956-61):

1. This plan followed the Mahalanobis model, an economic development model.

2. This plan paid major emphasis to domestic production of industrial products and rapid
industrialisation.
3. Steel plants at Bhilai, Durgapur, and Rourkela were established during this plan.
4. The target growth rate of this plan was 4.5% and the actual growth rate was 4.27%.

Third Five Year Plan (1961-66):

1. The third Five-year Plan stressed growth in agriculture and industry.

2. The plan aimed to increase national income by 30% and agriculture production by 30%.
3. India failed to achieve its target due to wars with China in 1962 and Pakistan in 1965 and
bad monsoon.
4. The target growth rate of this plan was 5.6%, but the actual growth rate was 2.4%.

Three Annual Plan (1966-69):

1. Due to miserable failure of third plan the government was forced to declare "plan
holidays" (from 1966–67, 1967–68,& 1968–69).
2. Three annual plans were drawn during this period.
3. Equal priority was given to agriculture, its allied activities, and industrial sector.

Fourth Five Year Plan (1969-74):

1. This plan emphasized towards agriculture growth and Green Revolution in India
advanced agriculture production.
2. 14 major Indian banks were nationalised.
3. The target growth rate was 5.6%, but the actual growth rate was 3.3%.
4. India conducted nuclear test in 1974.
Fifth Five Year Plan (1974-78):

1. This Five-year Plan laid stress on employment, checking inflation, poverty alleviation
(Garabi Hatao), and justice.
2. The plan also focused on self-reliance in agricultural production and defence.
3. The Indian national highway system was introduced.
4. 'Minimum Needs Programme' was launched.
5. When Janta Party Government came to power it terminated the plan in the fourth year
itself i.e. 1978.
6. The target growth rate was 4.4% and the actual growth rate was 5.0%

Rolling Plan (1978-80):

The Janata Party government rejected the fifth five year plan and introduced a new Sixth
five year plan (1978-1983). This plan was again rejected by the Indian National Congress
government when it came to power in 1980 and a new sixth plan was made. The earlier
one was subsequently referred to as a rolling plan. Rolling plan concept was coined by
Gunnar Myrdal.

Sixth Five Year Plan (1980-85):

1. This Five-year plan marked the beginning of economic liberalisation.

2. This plan focused equally on infrastructure and agriculture.
3. The sixth Five-year plan was a great success to Indian economy. The target growth rate
was5.2% and the actual growth rate was 5.4%.

Seventh Five Year Plan (1985-90):

1. This Five-year Plan aim to increase economic productivity, production of food grains, and
generating employment.
2. Jawahar Rozgar Yojana was launched in 1989.
3. The plan was very successful. The target growth rate was 5.0% and the actual growth
rate was6.01%.

Period (1989-91):

1. No five year plan was implemented during this period due to political instability.
2. Only annual plans were made for the period between 1990 and 1992.
3. In 1991, India faced a crisis in Foreign Exchange (Forex) reserves, left with reserves of
only about US$1 billion. At that time Dr. Man mohan Singh launched India's free market
reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of
privatisation and liberalisation in India.

Eight Five Year Plan (1992-97):

1. The eighth five year plan aimed towards modernization of industries.

2. The main objectives of this plan were controlling population growth, poverty reduction,
employment generation, strengthening the infrastructure etc.
3. The target growth rate was 5.6% and the actual growth rate was 6.8%.

Ninth Five Year Plan (1997-2002):

1. This five year plan gave priority to agriculture and rural development with a view to
generating adequate productive employment and eradication of poverty.
2. Accelerating the growth rate of the economy with stable prices.
3. Ensuring food and nutritional security for all
4. Containing the growth rate of population
5. The target growth rate was 6.5% and the actual growth rate was 5.4%.

Tenth Five Year Plan (2002-07):

This five year plan aim to achieve 8 per cent average GDP growth for the period 2002-07.
2. Creation of 50 million employment opportunities in the next 5 years.
3. Reduction in gender gaps in literacy and wage rates by at least 50% by 2007.
4. Reduction of poverty rate by 5 percentage points by 2007.
5. 20-point program was introduced.
6. The target growth rate was 8.1% and the actual growth rate was 7.3%.

Eleventh Five Year Plan (2007-12):

1. Accelerate growth rate of GDP from 8% to 10% and then maintain at 10% in the 12th
Plan in order to double per capita income by 2016 - 17.
2. Rajiv Aarogyasri Health Scheme was launched.
3. Create 70 million new work opportunities.
4. Reduce educated unemployment to below 5%.
5. Increase forest and tree cover by 5 percentage points.
6. Raise the sex ratio for age group 0 - 6 to 935 by 2011 - 12 and to 950 by 2016 - 17.

Twelfth Five Year Plan (2012-17):

1. This five year plan aim to achieve 8.2% growth.

2. Achieve 4 percent growth in agriculture. 
3. Reduce poverty by 10 percentage points, by 2017.
4. Health, education and skill development, environment and natural resources and
infrastructure development are the main focus area of this plan.

Economic Planning in India: Achievements

and Failures
Major Accomplishments of Planning:
(a) Higher Rate of Growth:
Economic planning in India aims at bringing about rapid economic
development in all sectors. In other words, it aims at a higher growth rate.

India’s macroeconomic performance has been only moderately good in

terms of GDP growth rates. The compound annual rate of growth stands at
4.4% at 1993-94 prices for the whole planning period (1950-51 to 1999-00).
Compared to the pre-plan period when she was caught in a low level
equilibrium trap, growth acceleration during the last 50 years has been
impressive indeed. However that it is not yet clear as to how much of this
acceleration has been due to the change in the world economic boom since
World War II and how much due to India’s own planning efforts.

(b) Growth of Economic Infrastructure:

India’s performance in building up the necessary economic infrastructure is
really praiseworthy. It is to be noted that the process of industrialisation of
any country largely depends on the development of economic infrastructure
in the form of transport and communications, energy, irrigation facilities,
and so on.

At the inception of economic planning road length was 4 lakh kms, but by
1996- 97 it rose to approximately 24.66 lakh kms, railway route length
increased from 53,596 kms in 1951 to about 62,800 kms in 1999-00. Today,
the Indian railway system is the largest in Asia and the fourth largest in the
world. Similarly, other modes of transport (such as shipping and civil
aviation) have also expanded phenomenally.

The electric power generated jumped from a meager 61.26 million kw in

1970-71 to 526.7 billion kw in 1999- 00. However, as per the needs of the
economy, it is still inadequate. The gross irrigated area as a percentage of
gross cropped area increased from 17.4% in 1950-51 to 38.7% in 1996-97.

(c) Development of Basic and Capital Goods Industries:

Another major area of success of Indian planning is the growth of basic and
capital goods industries. With the adoption of the Mahalanobis strategy of
development during the Second Plan period, some basic and capital goods
industries like iron and steel witnessed spectacular growth
It is said that the present level of development in infrastructure as well as
basic and capital goods industries is considered enough to put the Indian
economy on the path of self-sustaining growth. Yet more is to be done for
achieving rapid industrialisation. But whatever growth has been achieved
in infrastructure and basic industrialise been due to planning.

(d) Faster Growth of Agriculture:

The most significant aspect of India’s five year plans is that the overall rate
of growth of food production has now exceeded the rate of growth of
population. No doubt, in the early years of planning, agricultural
performance was miserable. As a result there had emerged food crisis. But
due to the impact of biochemical revolution from the late 1960s, food crisis
has become almost a thing of the past. She has attained self-sufficiency in
food-grains.

That is why the Indian economy is now stronger and better equipped to
tackle any eventuality (mainly food crisis) than ever before. Despite the
worst- ever droughts of 1986 and- 1987, India was required to import a very
small quantity of food. This is, no doubt, a notable achievement.

(e) Savings and Investment:

The rise in the domestic savings rate from 8.9% of GDP in 1950- 51 to
22.3% in 1999-00 is definitely impressive. Similarly, India’s gross domestic
capital formation increased from 8.7% in 1950-51 to 23.3% of GDP in 1999-
00. However, this higher growth rate of capital formation failed to
accelerate the rate of economic growth. Hence, a paradox has been en-
countered high saving rate and slow growth of per capita income.

(f) Economic Self-Reliance:

Self-reliance refers to the lack of dependence on external assistance. In
other words, it means zero foreign aid. India all along used to importing
huge food-grains, fertilisers, raw materials and industrial machinery and
equipment. This resulted in draining of India’s precious .foreign exchange
reserves. Hence, the need for achieving economic self-reliance.

No doubt India has achieved quite some progress in certain important

directions. Firstly, because of the increase in output of food-grains, India
has achieved near self-sufficiency in food. India is now capable of handling
food crises in spite of failures due to the building up of buffer stock of food-
grains. Secondly, with the establishment of basic industries as well as
imports substitute industries, India’s dependence on imports for heavy
chemicals, transport and communications machinery, plant and other
capital equipment has diminished a great deal.

Major Failures of Planning:

(a) Inadequate Growth Rate:
In quantitative terms, the growth rate of the Indian economy may be good
but not satisfactory by any standards. Since the actual growth rate was less
than the planned or targeted rate of growth it was not possible to meet
other goals of planning such as poverty alleviation and improvement of
living standards.

Except in the First and the Sixth Five Year Plans, the actual growth rate
remained below the targeted growth rates of GNP and per capita income.
India remains one of the poorest nations of the world even after 50 years of
economic planning. It has been estimated that at least 7 to 7 ½ years are
required to attain the five-yearly targeted growth rates of various plans.

Let us now turn to the desired rate of growth which involves several non-
economic (mainly socio-psychological) variables such as people’s hopes and
aspirations, desires and rising expectations. An ordinary man evaluates
planning in terms of availability of essential goods and services at
affordable price

The per capita availability of cotton cloth has, in fact, increased marginally
from 12.9 metres per annum in 1980-81 to 14.2 metres p.a. in 1999-00. Per
capita availability of food-grains has increased from 394.9 grams per day in
1950-51 to 470.4 grams per day in 1999-00. The falling or slow growth of
per capita supplies of necessary wage goods (such as food-grains, textiles,
tea, etc.) is a matter of grave concern and is an indication of tragic failure-of
planning.

(b) Move Toward Socialistic Pattern of Society:

Indian planning aims at building up a ‘socialistic pattern of society’, in a
mixed economy, through various egalitarian measures. These are (i) land
reform measures with the purpose of redistribution of land among poorer
peasants, (ii) reduction of concentration of economic power in the hands of
a few big bourgeoisie and (iii) expansion of the public sector and
nationalisation of certain important industries.

Most land reform measures have failed a achieved partial success. Security
of tenure, conferment of ownership rights on actual tillers, ceiling on
landholdings, etc. are all on paper.

The concentration of economic power in a few hands has to be reduced. But

mainly due to India’s tax system and industrial licensing policy the big firm
have become bigger over the plan period. In recent years, the Government
has encouraged privatisation in a large measure by de-licensing industries.
This has led to further inequality.

The development of public sectors has been viewed by the Government as a

“countervailing power” to private monopoly. But the contribution of the
public sector and nationalised institutions towards the national exchequer
is highly insignificant. Barring a few public sector industries, all Central
and State Government public sector units are running at a loss.

(c) Economic Inequality and Social Injustice:

Two aspects of social justice involves, on one hand, the reduction of poverty
and on the other, the reduction of inequality. Indian plans aim at reducing
such inequalities, so that the benefits of economic development can be
enjoyed by poor people and the weaker sections of the society.

It was estimated that more than 50% of the total population was below the
poverty line in 1950-51. The poverty ratio come down to 37% in 2000-01. In
spite of some success achieved in alleviating poverty, the incidence of
poverty is still high in India. And the incidence of poverty is higher in rural
areas than in cities and towns.

(d) Unemployment:
The removal of unemployment is considered to be another important
objective of India’s five-year plans. But the employment generation
programmes did not achieve much success and the problem of
unemployment has become more and more serious plan after plan. The
number of applicants on the live register of employment exchanges
increased from 17.83 lakhs in 1981 to 40.37 lakhs in 1999.

(e) Regional Imbalance:

The entire planning exercise has created a vast regional imbalance. Over
the years, inequalities among the States have widened. This is mainly
because the backward areas did not receive fair treatment, so far as
resource transfer is concerned.

(f) Inflation:
Finally, the benefits of economic planning have largely offset by price infla-
tion. The prices of essential goods have been increasing much faster than
other prices. This has resulted in great hardships to the vast majority of the
people mainly the poor and the weak. Growth without stability has become
an essential characteristic of Indian planning.

On the social side, poverty remains pervasive, the infant mortality rate has
stagnated at 72 per 1000 for a number of years, the literacy rate is still low
(65.38% in 2001) though improving, and 60% of rural and 20% of urban
households have no power connections. So the quality of life of Indian
people remains very low even after 50 years of planning.

In view of these failures, Prof. Sukhamoy Chakraborty remarked

that“Indian plans may be good on paper but are rarely good in
implementation”. So the need of the hour is to formulate a correct
economic policy and implement it properly.

Introduction
Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for
propelling India’s overall development and enjoys intense focus from Government for initiating
policies that would ensure time-bound creation of world class infrastructure in the country.
Infrastructure sector includes power, bridges, dams, roads and urban infrastructure
development. In 2016, India jumped 19 places in World Bank's Logistics Performance Index
(LPI) 2016, to rank 35th amongst 160 countries.
Market Size
Foreign Direct Investment (FDI) received in Construction Development sector (townships,
housing, built up infrastructure and construction development projects) from April 2000 to
December 2017 stood at US$ 24.67 billion, according to the Department of Industrial Policy and
Promotion (DIPP). The logistics sector in India is expected to increase at a Compound Annual
Growth Rate (CAGR) of 10.5 per cent, from US$ 160 billion in 2017 to US$ 215 billion by 2020.
Investments
India has a requirement of investment worth Rs 50 trillion (US$ 777.73 billion) in infrastructure
by 2022 to have sustainable development in the country. India is witnessing significant interest
from international investors in the infrastructure space. Some key investments in the sector are
listed below.

 In June 2018, the Asian Infrastructure Investment Bank (AIIB) has announced
US$ 200 million investment into the National Investment & Infrastructure Fund
(NIIF).
 Private equity and venture capital (PE/VC) investments in the infrastructure
sector reached US$ 3.3 billion with 25 deals during January-May 2018.
 Indian infrastructure sector witnessed 91 M&A deals worth US$ 5.4 billion in
2017
 In February 2018, the Government of India signed a loan agreement worth US$
345 million with the New Development Bank (NDB) for the Rajasthan Water
Sector Restructuring Project for desert areas.
 In January 2018, the National Investment and Infrastructure Fund (NIIF)
partnered with UAE-based DP World to create a platform that will mobilise
investments worth US$ 3 billion into ports, terminals, transportation, and logistics
businesses in India.

Government Initiatives
The Government of India is expected to invest highly in the infrastructure sector, mainly
highways, renewable energy and urban transport, prior to the general elections in 2019.
The Government of India is taking every possible initiative to boost the infrastructure sector.
Some of the steps taken in the recent past are being discussed hereafter.

 Announcements in Union Budget 2018-19:

o Massive push to the infrastructure sector by allocating Rs 5.97 lakh crore
(US$ 92.22 billion) for the sector.
o Railways received the highest ever budgetary allocation of Rs 1.48 trillion
(US$ 22.86 billion).
o Rs 16,000 crore (US$2.47 billion) towards Sahaj Bijli Har Ghar Yojana
(Saubhagya) scheme. The scheme aims to achieve universal household
electrification in the country.
o Rs 4,200 crore (US$ 648.75 billion) to increase capacity of Green Energy
Corridor Project along with other wind and solar power projects.
o Allocation of Rs 10,000 crore (US$ 1.55 billion) to boost telecom
infrastructure.
 A new committee to lay down standards for metro rail systems was approved in
June 2018.
 Rs 2.05 lakh crore (US$ 31.81 billion) will be invested in the smart cities mission.
All 100 cities have been selected as of June 2018.
 Contracts awarded under the Smart Cities Mission would show results by June
2018 as the work is already in full swing, according to Mr Hardeep Singh Puri,
Minister of State (Independent Charge) for Housing and Urban Affairs,
Government of India.
  The Government of India is working to ensure a good living habitat for the poor in
the country and has launched new flagship urban missions like the Pradhan
Mantri Awas Yojana (Urban), Atal Mission for Rejuvenation and Urban
Transformation (AMRUT), and Swachh Bharat Mission (Urban) under the urban
habitat model, according to Mr Hardeep Singh Puri, Minister of State
(Independent Charge) for Housing

Road Ahead
India’s national highway network is expected to cover 50,000 kilometres by 2019, with around
20,000 km of works scheduled for completion in the next couple of years, according to the
Ministry of Road Transport and Highways.
The Government of India is devising a plan to provide wifi facility to 550,000 villages by March
2019 for an estimated cost of Rs 3,700 crore (US$ 577.88 million), as per the Department of
Telecommunications, Government of India.
India and Japan have joined hands for infrastructure development in India's north-eastern states
and are also setting up an India-Japan Coordination Forum for Development of North East to
undertake strategic infrastructure projects in the northeast.