Planning in India

Planning in India

First (1951-


Rehabilitation of refugees, rapid agricultural development so as to achieve food self-sufficiency in the shortest possible time and control of inflationTargets and objectives more or less achieved.
Second (1956-61)‘rapid industrialisation with particular emphasis on the development of basic and heavy industries’

To give a big push to the economy so that it enters the take-off stage.

Nehru-Mahalanobis model was adopted.

Industrial Policy of 1956 accepted the establishment of a socialistic pattern of society as the goal of economic policy.

Could not be implemented fully due to shortage of foreign exchange. Targets had to be pruned.
Third (1961-66)‘establishment of a self-reliant and self-generating economy’Failure. Wars and droughts.
Fourth (1969-74)‘growth with stability’ and progressive achievement of self-reliance’

Garibi Hatao

Target: 5.5 pc

Was ambitious. Big failure. Achieved growth of 3.5 pc. Inflation.
Fifth (1974-79)‘removal of poverty and attainment of self-reliance’High inflation. Was terminated by the Janta govt.
Sixth (1980-85)‘direct attack on the problem of poverty by creating conditions of an expanding economy’Most targets achieved. Growth: 5.5 pc
Seventh (1985-1990)Emphasis on policies and programmes which would accelerate the growth in foodgrains production, increase employment opportunities and raise productivitySuccess. Growth: 6 pc
Eighth (1992-97)
Ninth (1997-2002)Growth with social justice and equality


  • On the eve of independence India was largely a agrarian economy
  • 70 pc of the workforce was engaged in agriculture; 50 pc of national income from it.
  • To set India on a high economic growth path it was realised that savings need to be increased and it needs to be translated into investment.
  • Hence, the focus of Indian planning was to direct public investment in the area of infrastructure, agriculture and industrial development
  • While agriculture and infrastructure received main focus in the first FYP, industrial development was to preoccupy Indian planning process second plan onwards
  • This was mainly because India was operating as, more or less, a closed economy. In such a situation, the capital goods for production and growth had to be produced indigenously. This was necessary to convert growing savings into investment. In addition, there could have been other considerations like self-reliance and building of defence capability.
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