The objectives of economic planning with reference to Indian five year plans.
Economic planning is considered as the most systematic technique for redressing all economic ills. Various countries of the world have already experienced the successful implementation of economic planning in the mean time. Eulogizing this experience of economic planning in different countries of the world, India adopted economic planning in order to overcome various economic ills faced by the country during the middle-part of the twentieth century.
In India the first systematic attempt of economic planning was made in 1934 when M. Visvesyaryya published his book ‘Planned Economy for India’. Again in 1937, Indian National Congress set up the National Planning Committee with Pt. Jawaharlal Nehru as Chairman.
In the mean time 8 leading industrialists of Bombay (Mumbai) submitted the ‘Bombay Plan’ in 1943. Again Shri. M.N. Roy also released simultaneously his ’10 year People’s Plan’. After that the National Planning Committee submitted its long awaited report in 1948.
In the mean time the Government of India also set up a Department of Planning and Development in 1944 and it introduced short-term and long-term plans for restoration of normalcy after war and for economic reconstruction and development. But in India the real beginning of Planning was made on March 1950 when the Indian Planning Commission was established. In July, 1951 the Commission submitted its draft outline of the First Five Year Plan to be effective from 1951-52 to 1955-56. In the mean time we have completed Twelve Five Year.
The following points highlight the seven main objectives of Indian five year plan. They are:
Objective # 1. High Rate of Growth:
Increase in national income as well as per capita income, is the first and foremost aim of Indian Planning.
If per capita income has to increase in the economy, it is necessary that level of production should increase faster than the increase in population. On looking plan-wise objectives of various plans, it is evident that the First Five Year Plan had envisaged a target of 11 per cent increase in national income while it rose to 18 per cent. The Second Plan fixed the target of 25 per cent increase in national income over the plan period but this target could not be realised.
However, national income was increased hardly at the rate of 4 per cent per annum. Again, Third Five Year Plan aimed to secure an increase in nation income of 5 per cent per annum. During the Third Plan, the national income increased by only 11.2 per cent. The Fourth Plan had visualised to attain the growth rate at 5.7 per cent per annum but it remained at 3.4 per cent annum.
The new Sixth Five Year Plan achieved growth rate of 5,2 per cent. Seventh Five Year Plan attained 5.8 per cent annual growth rate. Eighth Five Year Plan estimated the annual growth rate of 5.6 per cent. Similarly, Ninth Plan aimed at the growth rate of 7.5 per cent.
Objective # 2. Raising Investment Income Ratio:
Achieving a planned rate of investment within a given period brings the actual investment as proportion of national income to a higher level has been regarded significant. As increase in investment in the productive capacity of the country involves a corresponding increase in saving.
Unless country starts saving and investing in an productive channel, it can never be hoped to get out of poverty. It is, therefore, desired to achieve the planned rate of investment within prescribed time, which in turn, leads to higher level of national income.
Objective # 3. Social Justice:
Another major objective of Indian Five Year Plans is to provide social justice to the common man and weaker section of the society. In India, vast disparities in income and wealth distribution is a common feature. Our planners have pledged to the establishment of ‘democratic socialism’ and ‘socialistic pattern of society.
In Second Five Year Plan, we have announced socialistic pattern of society. This fact implies raising of the standard of living of the people who happen to be below poverty line. Our planners believe in narrowing down the gap between the rich and the poor as far as distribution of income and wealth is concerned and ensuring that benefits of growth are not to be swallowed by a handful of riches.
Fourth Plan indicated its deep concern towards income inequalities. Similarly, Planning Commission admitted that economic planning does seem to make any headway towards the removal of income inequalities during the forty seven years of planning. Seventh and Eighth Plans have the objective of economic stability and change of the economy according to the latest international trends.
Objective # 4. Removal of Poverty:
Upto the end of the Fourth Five Year Plan, it was felt that the benefits of development had received a raw deal to tackle the problem of poverty. In the Fifth Plan, there was a visible shift in the approach which resulted in the adoption of Minimum Needs Programme. Earlier to it, there was 20-Print Economic Programme to uplift the village community,
New Sixth Plan (1980-85) document mentioned that the incidence of poverty in the country is still very high and necessary measures need to be adopted to combat poverty. According to the new strategy, two programmes were introduced in this plan period. They are Integrated Rural Development programme (IRDP) and National Rural Employment Programme (NREP).
Some other programmes of development like Drought Prone Areas Programme (DPAP), Desert Development Programme (DPP), Crash Scheme for Rural Employment (CSRE). Small Farmers Development Agency and Marginal Farmers and Agricultural Labourers Agency (SFDA/MFALA) were strengthen.
Recently, Jawahar Rojgar Yojna has been launched, a programme to guarantee employment to youths in rural and urban areas. During Seventh and Eighth plan, some more rural development programmes have been added.
Objective # 5. Full Employment:
Unemployment problem is a chronic problem in underdeveloped countries. Though, India has emerged as a new developing country, yet it is in the grip of acute problem of disguised unemployment. Thus, the crucial objective of Indian Planning is the creation of conditions for attaining full employment and the elimination of unemployment, under employment and disguised unemployment.
In fact, full-employment has always remained a major objective of economic planning, specially since Second Five Year Plan. Since then, special emphasis has been given to the expansion of labour intensive industries and small industries and specially to provide employment to persons.
The programme like the Integrated Rural Development Programme (IRDP). National Rural Employment Programme (NREP) etc. has created confidence among rural community as it is expected to create additional employment opportunities. The approach to unemployment has changed significantly in recent years.
Objective # 6. Self-Reliance:
Another objective of Indian Plans is self-reliance. The earlier two plans could not give emphasis to it because they were formulated for rehabilitation and establishing basic and key industries in the country. Thus, in the Third Five Year Plan, for the first time, the idea of self reliance was stated. The Fourth Plan concentrated on the goal of self reliance in its document.
To some exert, India has gained success in the field of self reliance. Since 1977-78, the country has managed to cut clown its food imports as the government got the success in building up buffer stocks of food-grains which enable us to meet the food crisis especially during the course of worse harvests.
The country’s dependence on advanced countries for capital equipment was considerably reduced. This resulted due to the reason that-India itself developed in the field of basic industries like iron, steel, machine tools, heavy engineering, chemical and allied industries, metallurgical industries and other textile industries.
Objective # 7. Modernization:
The idea of modernization was floated in the Sixth Five Year Plan. In a common sense, it implies up-to-dating the technology. But Sixth Plan draft denotes the term modernization, a change in the structural and institutional set up of an economic activity.
A shift in the sectoral composition of production, diversification of farm activities, an advancement of technology and innovations are the part and parcel to a change from feudal system into a modern independent entity.
