Five Year Plans Objectives

First FYP (1951-1956)

Backdrop

Solve different problems that formed due to the WWII and then partition of India. Rebuilding country was goal and laying down foundation for industry. Also focus on subsidized healthcare and edu.

Essence: Agri, PSU, Health

• Based on Harrod Domar Model $⟹$ focus on savings
• Govt focus on development of primary sector
  • monsoons were good thankfully, so growth exceeded targets 🌧️
  • irrigation projects also inaugurated
• Intended to lay down foundation for secondary sector
  • but JLN socialist $\therefore$ focus on PSU and not private companies
  • contracts for 5 steel plants which came existence in next FYP
    • Why steel? Because steel is good raw material for many other industries. So high demand gives high profits for steel producer.
    • Also explains why Tata set up its steel plant TISCO as early as 1907.
• Population rise 📈
  • because India partnered with WHO to address children health, infant mortality rate
• verdict: going great 👍

Second FYP (1956-1961)

Info

PSU main focus here. Research institutes also established.

• based on Nehru Mahalanobis Model
  • $⟹$ this model promotes increase in capacity $⟹$ focus on PSU, capital goods 🏗️
  • sectors: power, irrigation, communication, transport
• criticism: “state control of economy” and dependence on deficit
  • led to first external payments crisis in 1957
    • 1991 was not the first time India faced issue. Financial issue started much earlier in late 1950s due to over-focus on State PSU by debt financing. Then later during Third FYP.
    • 1991 was only the height of issues, the point of no return 😔
• verdict: running high but state controlling most economy i.e. it becomes point of single failure. If state makes mistake $⟹$ whole country suffers because no private sector to sustain economy or provide goods, raw materials. 👻

Third FYP (1961-1966)

Background

Focus on PSU in last FYP gives shock and we go back to agriculture and rural areas. But wars and drought made growth slow.

• Fragile economy due to
  • Indo Pak War 1965-66 ⚔️
  • Sino-Indian War 1962 ⚔️
  • drought in 1965 (unlucky rain, unlike First FYP)
• hence agricultural goals couldn’t be met
• Focus on rural areas
  • panchayat elections started
  • primary school in rural areas 👩‍🎓
• Financial condition deteriorated
  • India borrowed money from IMF 💰
• overall slow growth
• verdict: so bad that even the government gave up 🤯

Plan Holidays (1966-1969)

Background

FYP failure $⟹$ lets make annual plans

• Third FYP was miserable failure $\to$ govt declared plan holiday and switched to Annual Plans for 3 years
• 1966-67: again drought
• focus on recovering economy after wars and drought

Fourth FYP (1969-1974)

Background

Focus on stability, self reliance, decreasing wealth concentration.

• based on Gadgil Formula
• 14 banks nationalized
  • i.e. decreasing wealth concentration by moving successful private venture under govt
• Green Revolution
• Buffer stock introduced, Drought Prone Area Program introduced
• but Indo-(East)Pakistan War 1971 took away funds earmarked for industrial dev
  • $⟹$ industrial development lagged even tho agri grow
• verdict: government only focusing on agri since independence, failing to build successful industry 👾

Eureka Moment!

Notice the continuous coincidental failures of industrial sector and coincidental success of agri sector in all plans (except Third FYP). We were also discouraging wealth concentration which put all burden of economic growth on Government. And as we see, Government simply couldn’t get their industrial development ambitions to materialize.

This contributes to why India could never get the secondary sector in time and instead moved straight off to tertiary sector. When liberalization happened, service sector was in vogue.

Fifth FYP (1974-1978)

Background

Poverty alleviation, agri and defence self reliance, basic quality of life

• poverty alleviation
  • emolyment
  • Garibi Hatao
• self reliance in agri and defence 🗡️
• more highways built 🚗
  • $⟹$ tourism expanded
• Minimum Needs Program introduced to improve living standards of people.
• Notice the years: this FYP actually was for only 4 year because in 1978, newly elected Janta Party govt rejected this plan
• verdict: finally government realizes it needs to look at social indicators and not just “agri vs industry”. Cool. 🍉

Rolling Plan (1978-1980)

Background

Janta Party plans burned by INC. But plans for 10, 15 or 20 years seemed nice.

• technically was called Sixth FYP by Janta Party, but when INC came back to power in 1980, they rejected this plan (tit-for-tat!👺)

Sixth FYP (1980-1985)

Background

The beginning of economic liberalization. Population needed a control.

• end of Nehruvian Socialism $⟹$ we don’t see govt knee capping anymore
• Ration shops closed and Price controls eliminated
  • $⟹$ high food prices and cost of living 😔
• NABARD established
• Population had been growing since independence
  • $⟹$ family planning measures expanded 👫
• verdict: Mehengaayi 😔💸 (tackled in next FYP)

Seventh FYP (1985-1990)

Background

Lets try reviving secondary sector? Without sacrificing on agriculture.

• industry
  • improve productivity
  • upgrade tech
• agri
  • production of food grains increase
• social justice measures brought in
  • anti poverty programs
    • necessary because last FYP inc cost of living
  • decreasing oppression
• verdict: not bad. We targeted 5% growth, got 6% 😎

Annual Plans (1990-1992)

What?

I honestly have no idea what the Government was doing these two years. But whatever, we got the Balance of Payment crisis.

• LPG Reforms
• IMF Intervention in 1991
• verdict: pain. 😩

Eighth FYP (1992-1997)

Background

BoP crisis just happened. Lets liberalize economy, focus on governing rather than doing business.

• modernization of indian economy
• focus on
  • poverty reduction
  • population control
  • tourism
  • human resource development
  • panchayat
  • nagar palika
• verdict: not bad. Target 5.6% growth, we got 6.8% 😎

Did we forget tertiary sector?

Up until when Govt wanted control, primary and secondary sectors were targeted. After LPG reforms of 1991, the tertiary sector took off but the growth was led by private companies, not Govt. Thus, the plans don’t talk in detail about tertiary sectors.

For reference, popular Indian companies in tertiary sector were established by this time. TCS - 1968, Infosys - 1981, HCL - 1991.

Ninth FYP (1997-2002)

Background

Govt shifts more to government work i.e. social welfare.

• economic and social growth
  • poverty control
  • population control
  • primary education 🎒
  • empowering SC/ST
  • primacy healthcare 🏥
• join efforts from public and private sector
• high exports to achieve self reliance
• focus on electricity, telecommunication, railway
• verdict: we’ve literally shifted away from “economic sectors” to now worrying about social parameters. Big Win. 😎🤙

Tenth FYP (2002-2007)

Background

Why no more interesting drama? Because government is no longer being a businessman? Older plans were much more fun to talk about.

• we be finally openly shouting GDP growth!
  • target 8% GDP growth (achieved 6.8% though)
• reduction of poverty rate
• give employment
• focus on gender gap reduction
  • hence first Gender Budget introduced in 2005-06
• verdict: becoming boring now 😒

Eleventh FYP (2007-2012)

Background

Roots strengthened, now focus on wider perspectives. Environment, higher education, terms like ‘fertility’, ‘inclusive growth’ etc now in govt vocab.

• social sector
• Focus widens as per new era and country’s progress
  • environmental sustainability 🌱
  • we did lots of primary edu $⟹$ now focus on higher edu
  • why attend in person? Lets also focus on distant edu
  • inclusive growth
  • reduce fertility rate
  • provide clean drinking water
• verdict: clap clap 👏

Twelfth FYP (2012-2017)

Background

Varied targets across social areas

• job opportunities in non agri sector
• remove gender and social gap in school enrollment
• enhance higher edu access
• reduce malnutrition
• electrify villages
• clean drinking water in villages
• increase green coverage
• banking services
• verdict: big promises but lack of on ground implementation 😱

End of Story

Planning Commission wound down in 2014. 😔🖐️