Economic Planning - Copy

8/2/2019 Economic Planning - Copy

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Presented by:Abhishek SaxenaAnuj JaiswalShushrita Mallik


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Why to Plan ???

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After independence, India was in dire conditions andneeded to start acting soon Some of the problems necessitated need for an

immediate plan:

Vicious circle of poverty

Foreign Trade

Need for Rapid industrialization

Population pressure

Development of Natural resources

Capital Deficiency & Market imperfections


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Planning is an economic mechanism for resource allocation and

decision-making in contrast with the market mechanism.

Economic planning refers to any directing or planning of

economic activity outside the mechanism of the market, in anattempt to achieve specific economic or social outcomes.

Economic planning can apply to production, investment,distribution or all three of these functions.

http://en.wikipedia.org/wiki/Economic_planning


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Planning body Survey of resources and collection of necessarydata Setting of planning objectives Priorities Development strategy Balancing act Resource mobilisation Administrative efficiency

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Matt H. Evans,[email protected]

Environmental Scan

Assessment

Background

Information

Situational Analysis

SWOTStrengths,

Weaknesses,

Opportunities,

Threats

Situation Past,

Present and Future

Significant Issues

Align / Fit with

Capabilities

Mission & Vision

Values / Guiding

Principles

Major Goals

Specific Objectives

Performance

Measurement

Targets / Standards of

Performance

Initiatives and

Projects

Baseline Components

Performance

Management

Review Progress

Balanced Scorecard

Take Corrective

Actions

Down to Specifics Evaluate

Where we are Where we want to be How we will do it How are we

doing

Gaps Action Plans Feedback upstreamrevise plans


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Economic growth Self reliance Removal of unemployment Reduction of income inequalities Elimination of poverty Modernisation


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Planning commission of India was setup in March 1950 by governmentof India. The task before planning commission of India are:-

Effective Utilization of Resources.

Prepare Five Year Plan Along With its Objective.

Co-ordination with State Government of India For Execution of Plan.

Determination Of Priorities, Stages Of Plan and Propose of Allocation

Of Resources For Due Completion Of Stages.


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Set up in 1950 withJawaharlal Nehru as its chairman.

Commission Comprises of 8 members:

1. Prime Minister (Chairman)2. Four Full time Members (including Deputy Chairman)3. Minister of Planning4. Minister of Finance5. Minister of Defence

At Present: Chairman- Dr. Manmohan Singh

Prime Minister

Deputy Chairman- Shri Montek singhAhluwalia

Member Secretary- Shri Rajeev RatnaShah


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Highest forum for economic planning, since Aug 6, 1952.

Representatives of both Central & State Govt.

Members:

1. PM of India2. CMs of all States3. Member of Planning Commission


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Democratic Participation from different sectors Existence of central plan and state plan Financial planning Unchanging priorities Short term and long term nature Central planning authority

Set objectives Government control Complete development Definite time period

o Objectiveso Economic growtho Self relianceo Removal of unemploymento Reduction of income inequalitieso Elimination of povertyo Modernisation


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1.First Five-Year Plan (1951-1956)

2 Second Five-Year Plan (19561961)

3 Third Five-Year Plan (19611966)

4 Fourth Five-Year Plan (19691974)

5 Fifth Five-Year Plan (19741979)

6 Sixth Five-Year Plan (19801985)

7 Seventh Five-Year Plan (19851990)

8 Eighth Five-Year Plan (19921997)

9 Ninth Five-Year Plan (19972002)

10 Tenth Five-Year Plan (20022007)

11 Eleventh Five-Year Plan (20072012


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Target Actual

1. First Plan (1951-56) 2.1 3.61

2. Second Plan (1956-61) 4.5 4.27

3. Third Plan (1961-66) 5.6 2.844. Fourth Plan (1969-74) 5.7 3.30

5. Fifth Plan (1974-79) 4.4 4.80

6. Sixth Plan (1980-85) 5.2 5.66

7. Seventh Plan (1985-90) 5.0 6.018. Eighth Plan (1992-97) 5.6 6.78

9. Ninth Plan (1997-2002 7.0 6.0

10.Tenth Plan (2002-2007) 8.7 7.1

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First plan 2000

Second Plan 2340

Third Plan 2380

Fourth plan 1560

Fifth plan 3180

Sixth plan 28100

Seventh plan 36134

Eight plan 62400Ninth Plan 75000

Tenth Plan 52000

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Objectives the standard of living Community and agriculture

development

Energy and irrigation Communications and

transport Industry Land rehabilitation Social services

Target of GDP growth 2.1per year

Achieved had been 3.6% peryear

Achievements GDP 3.6% per year

Evolution of good irrigationsystem

Improvement In roads

civil aviation

railways Telegraphs

posts

manufacture of fertilizers

electrical equipment


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development of only a few industries private industry had not developed


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Objectives To increase by 25% the

national income To make the country more

industrialized To increase employment

opportunities so that everycitizen gets a job

Development of Mining and industry Community and agriculture

development Power and irrigation Social services Communications and

transport Miscellaneous

Achievements 5 steel plants

a hydro-electric power project

production of coal increased

more railway lines

Land reform measures

improved the living standards of

the people The large enterprises in

seventeen industries werenationalized


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eliminate the importation of consumer goods

high tariffs Low quotas or banning some items altogether

License were required for starting new companies

This is when India got its License Raj, the bureaucratic controlover the economy

When a business was losing money the Government wouldprevent them from shutting down


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Objectives More stress to agriculture

subsidies

Sufficient help

Effective use of country's

resources To increase the national income

by 5% per year

To increase the production ofagriculture so that the nation is

self sufficient in food grains To provide employment

opportunities for every citizen ofthe country

To establish equality among allthe people of the country

Achievements Decentralization

Organizations formed Panchayat

Zila Parishads

Laid emphasis on oil conservation

irrigation

Afforestation

dry farming

Many fertilizer and cementplants were built

Green Revolution

PMs

Jawaharlal Nehru

Gulzarilal Nanda

Lal Bahadur Shastri


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Sino Indian War, India witnessed increase in price of products. Theresulting inflation


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Objectives to reform and

restructure govtsexpenditure agenda(defense became one

major expense) To facilitated growth

in exports

to alter the socioeconomic structure ofthe society

Achievements Great advancement

has been made withregard to India'snational income

considered as one ofthe emerging powers

served as a steppingstone for theeconomic growth

Food grainsproduction increased


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A gap was created between the people of the rural areas and thoseof the urban areas.

Due to recession, famine and drought, India did not pay much heedto long term goals


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Objectives To reduce social, regional,

and economic disparities

To enhance agriculturalproductivity

To check rural and urbanunemployment

To encourage self-employment

Production support policiesin the cottage industry

sector To develop labor intensive

technological improvements

Problems The international economy

was in a trouble

Food, oil, and fertilizerswhere prices sky-rocketed

Several inflationarypressuresAchievements Food grain production was

above 118 million tons due tothe improvement of

infrastructural facilities Bombay High had shot up the

commercial production of oil inIndia


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The world economy was in a troublesome state This had a negative impact on the Indian economy

Prices in the energy and food sector skyrocketed and as aconsequence inflation became inevitable


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Objectives To improve productivity level

To initiate modernization forachieving economic and

technological self-reliance To control poverty and

unemployment

To develop indigenous energysources and efficient energyusage

To promote improved qualityof life of the citizens

To introduce Minimum NeedsProgram for the poor

To initiate Family Planning

Achievements Speedy industrial

development

Emphasis on the

information technologysector

self sufficiency in food

science and technology alsomade a significant advance

several successful programson improvement of publichealth

government in the Indianhealthcare sector

Government investments in

the Indian healthcare sector


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During this time the Prime Minister was Rajiv Gandhi and henceindustrial development was the emphasis of this plan some opposedit specially the communist groups, this slowed down the pace ofprogress.


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Objectives Anti-poverty program

Improved facilities foreducation to girls

The government undertook toincrease productivity of

Oilseeds,Fruits,Vegetables

Pulses,cereals,FishEgg,Meat,milk.

Communications

Emergence of informatics,and hooking up of

telecommunications withcomputers

Transport

inland waterways, productpipelines, civil aviation,coastal shipping

Achievements Social Justice Removal of oppression

of the week Using modern

technology

Agriculturaldevelopment Anti-poverty programs Full supply of food,

clothing, and shelter

Increasing productivityof small and largescale farmers

Making India anIndependent Economy


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1989-91 was a period of political instability in India and hence nofive year plan was implemented

In 1991, India faced a crisis in foreignexchange(Forex) reserves
http://en.wikipedia.org/wiki/Foreign_Exchangehttp://en.wikipedia.org/wiki/Foreign_Exchange


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Objectives Prioritize the specific sectors

which requires immediateinvestment

To generate full scaleemployment

Promote social welfare measureslike improved healthcare,

sanitation, communication andprovision for extensive educationfacilities at all levels

To check the increasingpopulation growth by creatingmass awareness programs

To encourage growth anddiversification of agriculture

To strengthen the infrastructuralfacilities

To place greater emphasis onrole of private initiative in the

development of the industrialsector

Achievements Rise in the employment level

Poverty reduction

Self-reliance on domesticresources

Self-sufficiency in agriculturalproduction

GDP Growth Per Annum 5.6


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OBJECTIVES to prioritize rural

development to generate adequate

employment opportunities to stabilize the prices to ensure food and

nutritional security to provide for the basic

infrastructural facilities likeeducation for all, safedrinking water, primaryhealth care, transport,

energy to check the growing

population increase to encourage social issues

like women empowerment to create a liberal market

for increase in privateinvestments

ACHIEVEMENTS

A combined effort ofpublic, private, and alllevels of government

ensured the growth ofIndia's economy.

Service sector showed fastgrowth rate


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OBJECTIVES

To transform the country into the fastest growing economy ofthe world

targets an annual economic growth of 10%

Human and social development The social net Industry and services:

Industry,Minerals,Energy,Information technology,Tourism,Realestate,Construction,Internal trade

Forests and environment Science and technology Special area programs

schooling to be compulsory for children


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The National Development Council has approved the 11th Five Year Plan for the

period from 2007 to 2012.

The plan document is entitled Towards Faster and More Inclusive Growth.

The Indian economy on the eve of 11th Plan is much stronger than it was on the eve

of 10th Plan.

10th Plan has achieved the highest growth rate of GDP at 7.8 percent.

The priority areas for this plan are:

agriculture,

irrigation and water resources,

education,

health,

infrastructure,

employment,

upliftment of SCs/STs, other backward classes, minorities.

women and children.

.

Introduction:

Eleventh Five Year Plan(2007-2012)


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Strategy of 11th Plan:

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The main elements of strategy of 11th

Plan are:

1. Rapid Growth

2. Inclusive Growth

3. Main Priority Areas

4. Main Focus on Private Sector

Main Areas of 11th Plan:

Main areas of 11th plan are as follows:

1. Agriculture

2. InfrastructureHighways

Airports

Railways

Power Generation

3. Rural Infrastructure: Specific Targets of

Bharat Nirman Programme for the Period(2005-2009)

Irrigation

Rural Roads

Rural Housing

Rural Water

Rural ElectrificationRural Telephone

4. Industry

5. Employment

6. Education

7. Health

8. Social Sector


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Sectoral Growth Targets of11th Plan:

Financing of Eleventh Five YearPlan:

Resources Central

Government

States and UTs Total

1. Balance from

Current Revenue

6,39,989 3,85,050 10,39,039

2. Borrowings 7,67,722 6,49,423 14,17,145

3. Net Inflow from

abroad

- - -

4. Resources of PSEs 10,59,711 1,28,824 11,88,535

5. AggregateResources (1 to 4)

24,81,422 11,63,296 36,44,718

6. Assistance to States

and UTs

-3,24,851 3,24,851 -

TOTAL RESOURCES 21,56,571 14,88,147 36,44,718

Area Growth

Rate per

Annum

(in %)

Gross

Domestic

Product

(GDP)

9.0

Agriculture 4.1

Industry 10.5

Services 9.9

Exports 16.4

Imports 12.5

Financing Pattern of Public Sector Outlay during 11th

Plan(Rs.` Crore at 2006-07 prices)

(Source: Economic Survey, 2007-08, p.a-50)(Source: Planning Commission)


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Items Proposed Outlay (Rs.`

Crore)

Percentage of Total outlay

1. Agriculture and Allied

Activities

1,36,381 3.7

2.Rural Development 3,01,069 8.3

3. Special Area Programme

for Backward Regions

26,329 0.7

4. Irrigation and Flood

Control

2,10,326 5.8

5. Energy 8,54,123 23.4

6. Industry and Minerals 1,53,600 4.2

7.Transport 5,72,443 15.7

8. Communication 95,380 2.6

9. Science, Technology and

Environment

87,933 2.4

10. General Economic

Services

62,523 1.7

11. Social Services 11,02,237 30.3

12. General Services 42,284 1.2

TOTAL 36,44,718 100

Eleventh Plan Outlay and Its Allocation (at 2006-07 Prices)

(Source: Economic Survey, 2007-08, p.a-47)


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Assessment of Economic Planning in India:

o Achievements:

1. Increase in National Income2. Increase in Per Capita Income

3. Increase in the Rate of Capital

Formation

4. Development of Agriculture

5. Industrial Development6. Infrastructure Development

7. Generation of Employment

8. Development of Social Services

Life Expectancy

Death Rate

Education

Health

9. Self-Reliance

10. Structural and Institutional

Changes

o Failures:

The major failures of economic

planning are as follows:

1. No Substantial Increase in the

Standard of Living

2. Increase in Unemployment

3. Inequality in Distribution ofIncome and Wealth

4. More Ambitious

5. Paradox of Saving and Investment

6. Predominance of Welfare

Considerations7. Less Growth in Productive Sector


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Thank you

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