Five Year Plans of India | Achievement and Failures

Immediately after Independence, the government decided to introduce Five Year Plans on the pattern of the erstwhile Soviet Union. The First Five Year Plan of the country set out the following five objectives for accomplishment:

  • increasing the national income and improving the average standard of living of the people,
  • increasing the pace of industrialisation of both the basic and heavy industries,
  • increasing employment potential of various sectors;
  • narrowing down both vertical and horizontal inequalities, and
  • achieving self-reliance so as to minimise dependence on foreign aid.

First Five-Year Plan (1950 to 1956)

At the time of the First Five-Year Plan, the country was confronted with the:

  • problems of the influx of refugees,
  • severe food shortage resulting in the import of grains, and
  • mounting inflation.

It had also to correct the imbalances in the economy caused by the Second World War and the partition of the country. Accordingly, the First Five-Year Plan emphasised as its immediate objectives :

  • the rehabilitation of refugees,
  • rapid agricultural development to achieve self-sufficiency in food, and
  • to increase the per capita income.

The main thrust of the plan was the rapid development of agriculture and irrigation, and the establishment of power projects in the form of multi-purpose projects. The general growth rate during the First Five-Year Plan was about 3.7 per cent per annum against the target of 1.2 per cent.

Second Five-Year Plan (1956 to 1961)

The main focus of the Second Five-Year Plan was on:

  • rapid industrialisation and establishment of basic and heavy industries, to increase the production of iron and steel, and chemical fertilisers,
  • an increase of 25 per cent in the national income,
  • to create more employment opportunities, and
  • to reduce inequalities in income and wealth.

Third Five-Year Plan (1961 to 1966)

After the Second Five-Year Plan, the Indian economy entered the take-off stage as the first two plans had generated the required infrastructure for rapid economic development. The Third Five-Year Plan gave top priority to agriculture and basic industries. The main objectives of the Third Five-Year Plan were:

  • to achieve a five per cent increase in the national income,
  • to achieve self-sufficiency in food grains,
  • to expand basic industries like iron and steel, chemicals, fuel, and power,
  • to utilise fully the manpower resources of the country and to increase substantially the employment opportunities,
  • establish progressively greater employment opportunities and bring about a reduction in income disparities.

The main focus of the Third Five Year Plan was on balanced regional development. Because of the war with China in 1962, and with Pakistan in 1965, the Third Plan was later shifted from development to defence development.

Annual Plans

The war with Pakistan in 1965, severe droughts in successive years, and devaluation of currency delayed the finalisation of the Fourth Five-year Plan. Consequently, three Annual Plans (1966, 1967, to 1968-1969) were described as the Plan Holiday. This annual plan was implemented within the framework of the draft outline of the Fourth Five Year Plan.

Fourth Five-Year Plan (1969 to 1974)

The Fourth Plan was aimed at accelerating the tempo of development and reducing fluctuation in agricultural production a well as the impact of uncertainties of foreign aid. The main objectives of this plan were: (i) growth with stability and (ii) progressive achievement of self-reliance. It laid special emphasis on improving the condition of the less privileged and weaker sections of society through the provisions of employment and education. The average annual growth rate during the Fourth Plan was 3.4 per cent against the target of 5.7 per cent.

Fifth Five-Year Plan (1974 to 1979)

The Fifth Five Year Plan was formulated against the backdrop of severe inflationary pressure. The plan proposed to achieve two main objectives: (i) removal of poverty, and (ii) attainment of self-reliance through the promotion of higher rate of growth better distribution of income and very significant step-up in the domestic rate of saving. The plan targeted an annual growth rate of 5.5 per cent in national income while the annual achievement was only 5.5 per cent in national income while the actual achievement was only 5 per cent.

Sixth Five-Year Plan (1978 to 1983)

There were two Sixth Five-Year Plans. The Janta Party Sixth Plan (1978-1983) sought to reconcile the objectives of higher production with greater employment opportunity. The focus of the plan was the enlargement of employment opportunities in agriculture and allied activities, encouragement to household and small industries producing consumer goods for mass consumption, and to raise the incomes of the lowest classes through minimum needs programme.

The new Sixth Five-Year Plan (1980-1985) was launched by the Congress (I) with the prime objective of a direct attack on the problem of poverty by creating conditions for an expanding economy.

The strategy adopted for the plan was to strengthen infrastructure for both agriculture and industry. Stress was laid on dealing with inter-related problems through a systematic approach rather than in separate compartments, greater management, efficiency and intensive monitoring, and active involvement of people. The targeted annual growth was 5.2 per cent and the achieved growth rate was 5.4 per cent.

Seventh Five-Year Plan (1985 to 1990)

The Seventh Five-Year Plan emphasised policies and programmes which aimed at a rapid growth in food- grain production, increase in employment opportunities and productivity. The foodgrain production during the Plan grew by 3.23 per cent. To reduce unemployment and the incidence of poverty, special programmes like Jawahar Rozgar Yojna were initiated in addition to the already existing programmes. During the Plan period, the Gross Domestic Product (GDP) grew at an average rate of 5.6 per cent exceeding the targeted growth rate by 0.6 per cent.

Annual Plans

The Eighth Five Year Plan could not take off due to the fast-changing political situation at the centre. Its place was taken by the Annual plans with basic thrust on the maximisation of employment and social transformation.

Eighth Five-Year Plan (1992 to 1997)

The Eighth Plan aimed at an average annual growth rate of 5.6 per cent and an average industrial growth of 7.5 per cent. The salient features of the plan included:

  • faster economic growth,
    faster growth of manufacturing, agriculture and allied sectors,
  • significant growth rates in exports and imports,
  • improvement in trade and current account deficit, and
  • significant reduction in the Central Government’s fiscal deficit.

The main emphasis in the Eighth Plan was on:

  • generation of adequate employment to achieve near full-employment level by the turn of the century,
  • containment of population growth through active people co-operation.
  • universalisation of elementary education, and complete eradication of illiteracy among the people in the age group of 15 to 35 years,
  • provision of safe drinking water and primary health care facilities,
  • growth and diversification of agriculture to achieve self-sufficiency in food and generate surplus for exports, and
  • strengthening the infrastructure (energy, transport, communication, irrigation) in order to support the growth process on a sustainable basis.

However, there was a shortfall in the attainment of the Plan objectives due to lack of mobilisation of adequate resources owing to deterioration in the balance of current revenue, erosion in the contribution of state electricity boards and state road transport corporations, negative opening balance, mounting non-Plan expenditure and shortfalls in the collection of small savings, etc.

Ninth Five-Year Plan (1997 to 2002)

The main objective of the Ninth Plan was “Growth with social justice and equality’. It included:

  • priority to agriculture and rural development,
  • accelerating the growth rate of the economy with a stable price,
  • ensuring food and nutrition security for all,
  • 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;
  • ensuring environmental sustainability,
  • containing the growth of population,
  • empowerment of women,
  • promoting and developing Panchayati Raj institutions, co-operatives and self-help groups,
  • strengthening efforts to build self-reliance, and
  • strengthening sound foreign trade.

The Ninth Plan fixed growth rate at seven per cent per annum.

Tenth Five-Year Plan (2002 to 2007)

The main objective of the Tenth Plan was at doubling the per capita income in ten years and achieving the growth rate of eight per cent of the GDP per annum. The plan aimed at harnessing the benefits of growth to improve the quality of life of the people by setting the following key targets:

  • reduction in poverty ratio from 26 to 21 per cent,
  • bringing down the decadal growth of population to 16.2 per cent in (2001-2011).
  • growth in gainful employment,
  • universal access to primary education,
  • increase in literacy to 75 per cent,
  • reduction in maternal mortality ratio to 2 per cent and infant mortality rate to 45 per 1000 live birth,
  • provision of potable drinking water to all villages,
  • increase in forest and tree cover to 25 per cent,
  • cleaning of the major polluted rivers,
  • creation of 50 million job opportunities, and
  • reducing regional inequalities in development.

The target was to achieve 10 per cent growth rate in the industrial sector and improving people’s participation in the process of development.

Eleventh Five-Year Plan (2007 to 2012)

The main focus of the Eleventh Five Year Plan was on towards faster and more inclusive growth. The priority areas of this plan are agriculture, irrigation, and water resources; education, health, infrastructure, and employment, along with programmes for the upliftment of SCs/STs, other backward classes, minorities, women and children. This Plan stresses that the benefits of development should reach all sections of the population.

Twelfth Five-Year Plan (2012 to 2017)

The main emphasis in the Twelfth Plan was on:

  • creating 50 million new job opportunities in the private sector,
  • to bridge gender and social gaps in school admissions,
  • increasing access to higher education,
  • to reduce malnutrition in children aged 0-3 year,
  • to supply electricity to all the villages,
  • to ensure that 50% of the rural population has access to proper drinking water,
  • to increase green cover by 1 million hectares per year,
  • providing access to banking services to 90% of households.

Achievement of Five-Year Plans

In almost 65 years of planning, the Five-Year Plans have not been able to achieve their objectives in full. The constructive role in the socio-economic development of the country cannot be under-estimated. During the planning period, the national income has gone up by about seven times, the per capita income has increased by about 3 per cent, the GDP has increased by about eight times. The main achievements of the Five-Year Plans may be summarised as under:

  1. Impressive industrialisation in the capital goods sector through the public sector.
  2. Development of economic infrastructures like energy, irrigation, roads, transport, and communication.
  3. Diversification of export and import substitution.
  4. Rise in life expectancy of the Indian people from 37 years in 1951 to 1965 in 2001.
  5. Development of an educational system, thereby raising the literacy level from 34 per cent in 1951 to 65 per cent in 2001.
  6. Development of science and technology and nuclear power for peaceful purposes.
  7. Achievement of self-sufficiency in foodgrains. The per capita cereal consumption increased from 334 grams per day in 1951 to 495 grams in 2007.

Failures of Five-Year Planning

The Indian Five-Year planning has miserably failed to achieve some of its important objectives:

  1. India failed to evolve a society based on equity and social justice that is free from the tyranny of exploitation.
  2. India could not eradicate poverty as about 37 per cent of the total population is below the poverty line.
  3. The planning process could not eradicate poverty, malnutrition, hunger, unemployment, exploitation, child labour, tyranny, and injustice.
  4. The planning could not provide equal status to females. Many efforts need to be made to remove gender bias.
  5. Black money has generated a parallel economy.
  6. Redistribution of land and quick transition to progressive agriculture has not yet been achieved. The growth rate of agriculture is around 2%, much below the desired level. In 2009, the growth level of agriculture fell to 1.8 per cent.
  7. The pace of progress of land reforms is extremely slow, and the restoration of title rights over land is a distant dream.
  8. The planning has not been able to bridge the gap between economic, social, and regional inequalities.
  9. According to WHO Unicef report, about 638 million people in India do not have access to toilets. Around 69% of rural Indians defecate in the open. In the cities, the figure is 18 per cent (Times of India, 17th March 2010. New Delhi ed. pp. 1 and 19.)
  10. The plans have failed to achieve balanced regional development.