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Modernization aims at improving the standard of living of the people by adopting a better scientific technique of production, by replacing the traditional backward ideas by logical reasoning and bringing about changes in the rural structure and institutions. These changes aim at increasing the share of industrial output in the national income, upgrading the quality of products and diversifying the Indian industries. Further, it also includes expansion of banking and non-banking financial institutions to agriculture and industry. It envisages modernization of agriculture including land reforms.

The maximum expenditure in this plan was done on energy sector that was 28.1 per cent of the total plan expenditure. The second priority was given to transport and communication. The average growth rate for this plan was fixed at 5.2 per cent.

Reducing infant mortality rate from 72 in 1999-2000 to 45 in 2007 and to reduce the maternal mortality rate from 4 in 1999-2000 to 2 in 2007.

The period of the twelfth five-year was from April 1,2012 to March 31, 2017.

Before 1990, seven five year plans had been executed and their introduction is given below: 

i. First five year plan : The period of the first five-year plan was from 1951 to 1956, which mainly focused on the development of the agricultural sector. This plan envisaged the removal of instabilities created by the partition of the country and the Second World War. The top priority in this plan was to increase agricultural productivity. In order to achieve these objectives, special emphasis was laid on developing and extending the means of transportation and communication and arrangement of irrigation facilities. Maximum resources were made available for transportation and communication system under this plan, which was 26.4 per cent of the total plan expenditure.

ii. Second five year plan : The tenure of second five year plan was from 1956 to 1961. The main objective of this plan was to adopt such schemes that could establish an equitable social system, reduction of inequalities in income and wealth and a more even distribution of economic power. This plan particularly aimed at the development plan of the public sector and rapid industrialization. About 20.1 per cent of the total resources were spent on industries and mining. Other important objectives included sizeable increase in national income so as to raise the level of living in the country, rapid industrialization, with particular emphasis on the development of basic and heavy industries, a large expansion of employment opportunities, the development of iron and steel, non-ferrous metals, coal, cement, heavy chemicals and other industries was emphasized upon.

iii. Third five year plan : The tenure of third five-year plan was from 1961 to 1956. The main objective of this plan was to build a self-reliant and self-sustained economy, in order to achieve the target of continuous development. 

The immediate objectives of this plan were :

1. An increase in national income of more than 5% annually. 

2. An increase in the agricultural produce and to achieve self-sufficiency by increasing food-grain production. 

3. Expansion of basic industries. 

4. Utilizing the country’s manpower resource to the maximum and ensuring significant growth in employment.

iv. Fourth five year plan : The tenure of fourth five year plan was from 1969 to 1974. The action strategy of this plan was to achieve development and self reliance along with the stability. Maximum expenditure was allocated to transprotation and communication by allocated.

v. Fifth five year plan : The tenure of fifth five-year plan was from 1974 to 1979. Its objective was to achieve poverty eradication and self- reliance. The slogan “Garibi Hatao” was given by Mrs. Indira Gandhi in 1975. Under fifth five-year plan, a special programme was launched for the poor section of the society. The Janata Party government came into power in 1977 and it initiated a rolling plan of the period 1978 to 1983 after concluding the fifth five year plan one year before its fixed tenure. Achievement of inflation control and economic stability was also given top priority. One of the basic objectives was to achieve 5.5 per cent annual growth in national income.

vi. Sixth five year plan : The tenure of sixth five year plan was from 1980 to 1985. The main objective of this plan was to eradicate poverty. The maximum expenditure in this plan was done on energy sector, which was 28.1 per cent of total plan expenditure. The second priority was given to transport and communication. The average growth rate for this plan was fixed at 5.2 per cent.

vii. Seventh five year plan : The tenure of seventh five year plan was from 1985 to 1990. The main objective of this plan was increase in employment, increasing production and productivity. The growth in food grain production was 3.23 per cent which was higher than previous years. The reason for this was favourable weather. Maximum expenditure (30.5%) was spent on energy sector.

Basically, growth, full employment, equality, self-dependence, modernisation, etc.

National Institute for Transforming India.

Two aims of tenth five year plan are : 

1. Reducing poverty ratio from 26 per cent to 21 per cent by the year 2007. 

2. To achieve 16.2 per cent growth rate in population in next ten years.

This programme was initiated for the poor section of the society, which includes provision of basic education, water facility, better health facilities in villages, better transport services, etc.

In the eighth five year plan, more emphasis was laid on human development. That is why, it provided priovity to provision of employment opportunities, population control, education, water facility, etc.

Mrs. Indira Gandhi in 1975.

National Sample Survey Organization.

Accelerated growth and more inclusive development.

Two aims of ninth five year plan are : 

1. Increasing the rate of economic development, while keeping the prices stable. 

2. Population control.

Mainly, 27 aims were suggested in this. Six of them are : 

1. Poverty 

2. Education 

3. Health care 

4. Women and children 

5. Basic infrastructure 

6. Environment.

Fifth five year plan.

The tenure of the eleventh five year plan was from 2007-2012. The objective of this plan was to increase the growth rate to 9 per cent and to increase it to 10 per cent by the end of the plan period. The main objective of this plan was more accelerated and more inclusive development. 

For this purpose, 27 major targets were fixed in the plan which were divided into 6 main classes :

1. Poverty 

2. Education 

3. Healthcare, 

4. Women and Children,

5. Basic Infrastructure 

6. Environment. In this plan, new priorities were set for the public sector. Of the total expenditure, maximum expenditure was done on services (32.6%).

The tenure of ninth five year plan was from 1997 to 2002. The main objective of this plan was to ensure the availability of seven basic minimum services. 

These included : 

1. Pure drinking water. 

2. Availability of primary healthcare services.

3. Primary education for all. 

4. House for the homeless people. 

5. Nutritional food for children. 

6. Roads for every village and colony. 

7. Improving Public Distribution System.

Under Rolling Plan, plans for every year are adjusted and three plans are formed for each year according to the changing circumstances. One plan is for the current year, another for the short term and third for the long term.

Economic Planning, class-11, 

A time span of 20 years has been designated for describing the long term objectives of economic planning. 

These are as follows:

i. Growth : The increase in the inflation-adjusted market value of the goods and services. Example- Machines, Tools, Banking, transport, etc. All the Indian Five Year Plans have given primary importance to higher growth of real national income. In economic vocabulary, growth implies continuous growth in GDP, which is obtained from various sectors of the economy. These sectors include primary sector, secondary sector and tertiary sector. As the economy, develops, the contribution of primary sector keeps decreasing while the contribution of secondary and tertiary sectors keep increasing.

ii. Full employment : Another objective of the plans is better utilization of man power resource and increasing employment opportunities. Measures have been taken to provide employment to millions of people during plans. This is a social objective of five year plan, which implies that both rich and poor sections should have equal participation in development, because unemployment leads to emergence of various evils in the society, like theft, loot, terrorism etc.

iii. Equality : If the benefits of economic growth are enjoyed by a handful of people, then this growth is meaningless. In such a situation, the rich class will become richer and poor will become poorer, which, in turn, would create situations of conflict. Thus, economic equality has been made an important objective of planning. Only then, growth, self dependence, modernization will fructify and be realized as a target.

iv. Self Reliance : Self reliance implies that dependence on foreign goods should be as minimum as possible. For accelerating the process of industrialization, we had to import capital goods in the form of heavy machinery and technical know-how. For improving infrastructure facilities, like roads, railways, power, etc. We had to depend on foreign aid to raise the rate of our investment. As excessive dependence on foreign goods may lead to economic colonialism, the planners rightly mentioned the objective of self-reliance from the Third Plan on wards. In the fourth plan, much emphasis was given to self-reliance, specially in the production of food grains. In the fifth plan, our objective was to earn sufficient foreign exchange through export promotion and import substitution.

v. Modernization : Modernization aims at improving the standard of living of the people by adopting a better scientific technique of production, by replacing the traditional backward ideas, by logical reasoning and bringing about changes in the rural structure and institutions.

These changes aim at increasing the share of industrial output in the national income, upgrading the quality of products and diversifying the Indian industries. Further, it also includes expansion of banking and non-banking financial institutions to agriculture and industry. Modernization, research and development were emphasized important aims in the sixth five-year plan.

A 10 year plan was made in 1934 for the first time by Sir M.Visvesvaraya. He has described economic planning in his book “Planned Economy for India”. He is also called the Father of Indian planning. In 1944, eight industrialists from Mumbai came together and prepared a 15 year “Bombay Pain” which was also called “Tata Birla Plan”. Apart from this, revolutionary leader M.N.Roy created the Jana Yojna in 1944 and socialist leader Jaiprakash Narayan put forth the ‘Sarvodaya Plan’ in 1950. National Planning Committee was formed before independence in 1950 under the chairmanship of Jawahar Lai Nehru and the Planning Commission was formed in 1950. After that, the targets of five year plans, twenty year long-term plan or perspective plan were also fixed. ‘

Twelfth five year plan.

Correct Answer is: (b) Mixed

Achievements of economic planning are as follows : 

i. Growth of national income :

It is clear from the above table that the development rate remained at an average of around 3.5 per cent in the first three five year plans, which was named ‘Hindu Growth Rate’ by Prof. Rajkrishna. The growth rate increased after the sixth five year plan, which was a favourable sign of development, but it again declined in the ninth five year plan. Growth rate has been the highest in the eleventh five-year plan.

ii. Development in Agricultural sector : Agricultural productivity has also shown an upward trend during the plan period. The production of food grains which was 5.40 crore tonnes in 1950-51 increased to 26.48 crore tonnes in 2013-2014. Thus, food grain production witnessed a 5-fold increase. The growth rate in agricultural sector was 3.3 per cent in the Eleventh five-year plan as against the targeted growth rate of 4 per cent.

iii. Growth in Industries : In the first five year plan, much of the capital was invested to develop industry and defence. Industrial production has increased to a great extent, but later on it began declining. In this duration, the production of iron and steel, aluminum, engineering goods, chemicals, fertilizers and petroleum products increased.

v. Balance of payment : During the plan period, more capital was needed for developmental policies, and as a result, deficit budget had to be made. This deficit increased continually, and to balance it, devaluation of currency was done, which had an adverse effect on the balance of payment. The trade deficit of India remained unfavourable in all years except for 1972-73 and 1976-77. The foreign exchange reserve increased in the planing period. In December 2015 it reached upto 351.62 billion dollar.

V. Life expectancy, which was 32 years in 1951 increased to 65 years in 2001.

vi. The basic economic structure and social structure developed speedily in the plan duration. Education system developed and rates of savings and investment also increased.

Shortcomings of Economic planning : 

i. Failure in eradicating poverty : The main strategy of socialist development adopted in the plan duration was to provide people with a minimum standard of living. For this purpose, various programmes were initiated in the five year plans, and “garibi hatao” programme was also launched in the fifth five year plan. But, even today, about 1/4th population of India lives below the poverty line. According to the 61 st round of NSSO, 26.1 per cent population lived below the poverty line in 1999-2000. According to Suresh. D. Tendulkar Committee report, country’s 37.2 per cent population lived below poverty line. According to the 68th Round, 21.9% population lived below the poverty line (BPL).

ii. Slow growth rate in employment : Though many programmes of eradicating unemployment have been launched during the plan period, but all these programmes proved insufficient. The number of unemployed persons was 53 lakhs in the first plan, which increased to 7.49 millionin 1993-94 and 10.84 million in 2011-2012.

iii. Increase in inequality of income and wealth : In planning, various solutions and methods were adopted for this, but all the studies brought out the conclusion that the rich class got more opportunities for economic development. Between 2004-05 and 2009-10, income inequality has increased in rural areas of 10 states and urban areas of 18 states.

iv. Inadequacy of industrial development : Development of infrastructural industries in the country was given the highest priority in the second five year plan. But after this, the share of industries in total plan expenditure kept on decreasing, which obstructed the development of industries. The range of black economy also increased during the plan period. In the year 2008, it was calculated to be 640-7 billion dollars which was 50 per cent of the Gross Domestic Product of that year. But despite failures the economy has interested increase in GDP, per capita income, standard of living and rate of literary during the planning period. RBSE Class 1

Economic planning implies the method in which central planning officials implement economic programmes and policies to achieve preplanned objectives within a definite time period keeping in mind the resources of country.

Two functions of National Development Council are:

1. Defining the guiding-formulae for formation of national plans and resources. 

2. To review the implementation of national plan and giving a final form to it formed by the Planning Commission from time to time.

1. Increase in growth rate of GDP by 8%. 

2. Achieving the growth rate of 4% in agricultural sector.

(c) Agriculture, mining, etc.

Inclusive growth means economic growth that creates employment opportunities and helps in reducing poverty.

Correct Answer is: (a)2017

Tata Birla Plan.

(c) Bombay Plan – 1945

The committee suggested that all infrastructural industries should be under state control and it set a target of doubling the living standard of people in the next ten years.

In 1938, under the leadership of Jawaharlal Nehru.

Prime Minister

In the changing scenario of the world, the need was felt to provide more autonomy to the states so that the states may form developmental policies as per their respective needs and proceed ahead on the path of development. For this reason, the central government dissolved the Planning Commission and established the NITI Aayog on 1st January 2015 in its place.

Correct Answer is: (a) 1950

(c) Jawaharlal Nehru

1. Allocation of resources on priority basis in various phases of the plan. 

2. After the implementation of plans, evaluating them from time to time and providing suggestions.

(b) Prime Minister

20 year Long-term Plan called is perspective plan.

Sir M. Visvesvaraya.

Economic planning implies the method in which central planning officials implement economic programmes and policies to achieve pre-planned objectives within a definite time period keeping in mind the resources of country.

1. Increase in GDP and per capital income. 

2. Full employment. 

3. Judicial distribution or equality. 

4. Development of technical know how.

5. Self-sufficiency.

Planning defines the way of the resources of the country are utilized. Planning sets both general and specific target, which have to be achieved within a specific time period. In India, Planning is done for five years, and therefore, they are called fiveyear plans. The document of these plans does not only reveal the objectives of 5 year plans, but also the objectives of the next 20 years are mentioned.

The tenure of the First Five-year Plan was from in 1951 to 1956, which mainly focused in development of the agricultural sector. The top priority in this plan was to increase agricultural productivity. In order to achieve these objectives, special emphasis was laid on developing and extending the means of transportation and communication, and arrangement of irrigation facilities, which was 26.4 per cent of the total plan expenditure. This plan was successful in achieving its objectives. The target growth rate was 2.1% while the actual growth rate was 3.6%.

Under mixed economy, an economy is run by the public sector along with private ownership of the factors of production and independent activities of market powers. In this type of economy of the private sector exists along with the public sector.

Socialism is that system under which major economic decisions are taken by the government keeping in mind the social welfare of the society.

India had to bear the brunt of wars with China in 1962 and with Pakistan in 1965. That plans devaluation of currency created a state where the fourth five year plan could not be started in time. Due to the above reasons, three one year plans were made (1966-69) which is known as Plan holiday in the history of economic planning.