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Introduction 1.1 The Ninth Five Year Plan, launched in the 50th year of Indias Independence, will take the country into the new millennium. Much has happened in the fifty years since independence. The people of India have conclusively demonstrated their ability to forge a nation united despite its diversity, and their commitment to pursue development within the framework of a functioning, vibrant and highly pluralistic democracy. In this process democratic institutions have put down firm roots and flourished and development has also taken place on a wide front. As the millennium draws to a close, the time has come to redouble our efforts at development, especially in the social and economic spheres, so that the country will realise its full economic potential and the poorest and the weakest will be able to shape their destiny in an unfettered manner. This will require not only higher rates of growth of output and employment, but also a special emphasis on allround human development, with stress on social sectors and a thrust on eradication of poverty. 1.2 The Approach Paper to the Ninth Five Year Plan, adopted by the National Development Council, had accorded priority to agriculture and rural development with a view to generating adequate productive employment and eradication of poverty; accelerating the growth rate of the economy with stable prices; ensuring food and nutritional security for all, particularly the vulnerable sections of society; providing the basic minimum services of safe drinking water, primary health care facilities, universal primary education, shelter, and connectivity to all in a time bound manner; containing the growth rate of population; ensuring environmental sustainability of the development process through social mobilization and participation of people at all levels; empowerment of women and socially disadvantaged groups such as Scheduled Caste, Scheduled Tribes and Other Backward Classes and Minorities as agents of socioeconomic change and development; promoting and developing peoples participatory bodies like Panchayati Raj institutions, co-operatives and self-help groups; and strengthening efforts to build self-reliance. These very priorities constitute the objectives of the Ninth Plan.

1.3 Some specific areas from within the broad objectives of the Plan as laid down by the NDC have been selected for special focus. For these areas, Special Action Plans (SAPs) have been evolved in order to provide actionable, time-bound targets with adequate resources. Broadly, the SAPs cover specific aspects of social and physical infrastructure, agriculture, information technology and water policy. 1.4 The Ninth Plan is based on a careful stock taking of the strength of our past development strategy as well as its weakness, and seeks to provide appropriate direction and balance to the socio-economic development of the country. The principal task of the Ninth Plan will be to usher in a new era of growth with social justice and participation in which not only the Governments at the Centre and the States, but the people at large, particularly the poor, can become effective instruments of a participatory planning process. In such a process, the participation of public and private sectors and all tiers of government will be vital for ensuring growth with justice and equity. Growth and Investment Targets 2.1 Accelerating the growth rate of the economy with stable prices is central to the attainment of a number of objectives discussed in the previous chapter. There is by now enough evidence to show that rapid growth has strong poverty reducing effects especially when it is complemented by a public policy stance which is sensitive to the needs of the poor. Accelerated growth will also help in realising the objectives of increasing employment and, through that, spread of income generation and poverty eradication. However, the linkage between growth, employment and poverty reduction depends crucially upon the sectoral pattern of growth and on the degree to which the disadvantaged segments of the population and the backward regions of the country are successfully integrated into the wider growth process. 2.2 The growth objective also subsumes a number of subsidiary objectives which have, at one time or another, been explicitly identified as objectives in earlier Five Year Plans. Industrialisation, productivity growth, infrastructural development, are examples of such subsidiary objectives. The logic of economic growth and the requirements of structural consistency demand that most of these subsidiary objectives are met in order to attain the primary objective of accelerating the over-all growth rate. It is therefore usually

unnecessary to spell out each component of growth as a distinct objective unless it has direct bearing on the implementation of the over-all growth objective as possible alternative paths of development. It is in this context that agricultural growth has been specifically given the highest priority, as it determines a pattern of development that accelerates GDP growth with a rapid reduction in unemployment and poverty. 2.3 Economic growth is the outcome of numerous factors interacting with each other. For resource-constrained developing countries, capital accumulation or investment is the most important factor for increasing the productive capacity of the economy as well as for improving the productivity of the other factors of production. The Indian planning methodology has therefore traditionally focused on the relationship linking growth to the investment rate and the incremental capital-output ratio (ICOR), and the Indian Plans have been essentially investment plans, dealing with the allocation of investible resources among different sectors, maintaining inter-sectoral consistency towards attaining the targetted rates of growth. In a broad sense the results of such plans have not been unsatisfactory. As can be seen in Table 2-1, except for the Third and the Fourth Plans, the actual performance of the economy has usually been at or above the planned or targetted level. During these two Plans, the shortfalls were largely due to exogenous shocks that could not possibly be predicted. The Third Plan witnessed the drought years of 1965 and 1966, and the Indo-Pakistan War of 1965. The Fourth Plan experienced three consecutive years of drought (1971-1973) and the first oil-price shock of 1973. Table 2-1 : Growth Performance in the Five Year Plans (per cent per annum) -----------------------------------------------------------Target 1. First Plan (1951-56) 2. Second Plan (1956-61) 3. Third Plan (1961-66) 4. Fourth Plan (1969-74) 5. Fifth Plan (1974-79) 6. Sixth Plan (1980-85) Actual 2.1 4.5 5.6 5.7 4.4 5.2 3.61 4.27 2.84 3.30 4.80 5.66 ------------------------------------------------------------

7. Seventh Plan (1985-90) 8. Eighth Plan (1992-97) Notes

5.0 5.6

6.01 6.78 :

-----------------------------------------------------------(1) The growth targets for the first three Plans were set with respect to National Income. In the Fourth Plan it was Net Domestic Product. In all the Plans thereafter, Gross Domestic Product has been used (2) The Eighth Plan actual is based on the Quick Estimate for 1996-97. 2.4 Even today this approach remains useful as a starting point for assessing the limits of the possible alternative paths of development and the steps required for accelerating the growth rate of the economy. However, with the economic reforms of the last few years, some of the traditional instruments of implementing the Plans are no longer available. In particular, for determining the over-all rate of investment or its sectoral distribution, market forces, relative prices and incentives now play much more important roles than direct allocation of resources by public authorities. With the steady reduction in the share of public investment, both planned and actual, in total investment, as shown in Table 2-2, the ability of the Government to determine the structure of the economy through its own investment behaviour has eroded significantly. With the greater importance of private investment and the movement towards a more market based system, planning has to move away from direct intervention strategies to planning for policies. These issues will be addressed in this chapter.

10th FIVE YEAR PLAN

The 10th Five Year Plan (2002-2007) targets at a GDP growth rate of 8% per annum.Taking note of the inabilities of the earlier Five Years Plans, especially that of the 9th Five Year Plan, the Tenth Five Year Plan decides to take up a resolution for immediate implementation of all the policies formulated in the past. This amounts to making appeals to the higher government authorities, for successful completion of their campaigns associated with the rapid implementation of all past policies. This GDP growth of 7% is much higher than the world's average GDP growth rate. Thus, the Planning Commission of India sought to stretch the limit and set targets which would propel

5 India to the super league of industrially developed countries. In a nutshell, the Tenth Five Year Plan India envisages

More investor friendly flexible economic reforms Creation of congenial investment environment Encourage private sector involvement Setting up state-of-the-art infrastructure Capacity building in industry Corporate transparency Mobilizing and optimizing all financial resources Implementation of friendly industrial policy instruments

The Tenth Five Year Plan India documents are Vol. I: Dimensions and strategies 1. Perspective, objectives and strategy 2. Macroeconomic dimensions 3. Public sector plan: resources and allocations. 4. External sector dimensions 5. Employment perspective 6. Governance and implementation 7. Disaster management: the development perspective 8. Policy imperatives and programmatic initiatives The primary aim of the 10th Five Year Plan is to renovate the nation extensively, making it competent enough with some of the fastest growing economies across the globe. It also intends to initiate an economic growth of 10% on an annual basis. In fact, this decision was taken only after the nation recorded a consistent 7% GDP growth, throughout the past decade. The 7% growth in the Indian GDP is considered to be considerably higher that the average growth rate of GDP in the world. This enabled the Planning Commission of India to extend the GDP limit further and set goals, which will drive India to become one of the best industrial

6 countries in the world, to be clubbed and recognized with the worlds best industrialized nations. Like all other Five Year Plans, the 10th Five Year Plan is also devised, executed and supervised by the Planning Commission of India. Chief Objectives of the 10th Five Year Plan:

The Tenth Five Year Plan proposes schooling to be compulsory for children, by the year 2003. The mortality rate of children must be reduced to 45 per 1000 livings births and 28 per 1000 livings births by 2007 and 2012 respectively All main rivers should be cleaned up between 2007 and 2012 Reducing the poverty ratio by at least five percentage points, by 2007 Making provision for useful and lucrative employments to the population, which are of the best qualities According to the Plan, it is mandatory that all infants complete at least five years in schools by 2007. By 2007, there should be a decrease in gender discriminations in the spheres of wage rate and literacy, by a minimum of 50% Taking up of extensive afforestation measures, by planting more trees and enhance the forest and tree areas to 25% by 2007 and 33% by 2012 Ensuring persistent availability of pure drinking water in the rural areas of India, even in the remote parts The alarming rate at which the Indian population is growing must be checked and fixed to 16.2%, between a time frame of 2001 and 2011 The rate of literacy must be increased by at least 75%, within the tenure of the Tenth Five Year Plan There should be a decrease in the Maternal Mortality Ratio (MMR) to 2 per 1000 live births by 2007. The Plan also intended to bring down the Maternal Mortality Ratio to 1 per 1000 live birth by the year 2012.

The 10th Five year Plan of India in a nutshell:

Increasing the mobility of all the available financial resources of India, and optimizing them as well Setting up of a state-of-the-art infrastructure for all the existing industries in India. Encourage the initiative of capacity building within the Indian industrial sector Creating a friendly, amiable and pleasant investment environment in India Encouraging sufficient transparency in the corporate sectors of India Introduction of reforms in the industrial sectors, which are more investor-friendly in nature