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Economic Planning

Economic Planning is a process


under which a central authority
determines a set of economic
and social targets for an
economy and these targets are
set according to the resources
of the country within a specified
period of time
Objectives of
Economic planning
1)Increase in per capita real income
2)Full employment
3)Equitable distribution of wealth
4)Reduction of poverty
5)Industrialization
6)Self sufficiency in agricultural
products.
7)Development of social and economic
infrastructure
Features of Indian
Economic Plans
1)Heavy Reliance on Public sector
2)Regulated development of Private
sector
3)Protection of small scale Industries
4)Thrust on saving an Investment
5)Export Promotion an Import
Substitution
6)Centralized planning
Achievements of Indian
economic plans
1)Increase in national Income:-
During British period the national
income of India was increasing at
the rate of 0.5 percent per annum.
But during planning period the
national income of India increased
about 4.5 percent.
Plans National income
growth Rate (%)
First 3.7

Third 2.8

Fifth 5.0

Seventh 5.8

Ninth 5.5

Tenth 7.8

SOURCE: ECONOMIC SURVEY


2)Growth In Per Capita Income: - before
independence the growth rate was
almost zero. During first plan it was
1.8% which was 3.6 % in the ninth Plan.
3)Increase in the rate of capital
formation:- In 1950-51 the rate of
capital formation was 10 percent of
GDP which increased to which
increased to 35.9 percent of GDP in
2006-07
4) Development of Industries:- During the
planning period the growth rate of the
industrial production has been about
seven percent
Plan Growth In production
%

First 8

Second 7

Eighth 8

Ninth 5
5)Development of Economic Infrastructure:- The
total road length increased from 1,57000KM in
1950-51 to 3.34 million KM electricity
production increased from 2300 M. Watt to
1,12,682 M. watt in 2003-04.
6) Development of social infrastructure:- death rate
decreased from 27 per thousand in 1950-51 to 8
per thousand in 2004. Avg. life expectancy
increased from 32 years in 1951 to 65 years in
2004. Many diseases eradicated. There is
spread of education and health facilities.
7) Self sufficiency:- the percentage contribution in
the foreign assistance is decreasing in financing
the plans. In 3rd plan it was 12.8 5 and came
down to 10 5 in the 6th and 7th plan in 8th plan
it was 6.6 5%. Exports are increasing and the
growth rates of imports have been declined
over years.
Causes of failure of Indian
Economic plan
1)Rise in prices
2)Inadequate development in infrastructure
3)Lack of strong foundation:- failure of
monsoon in 1965-66,1966-67 and 1979-
80and wars of 1965&1971 then gulf crisis
5) Too Ambitious
6)Inequality in the distribution of income
and wealth.
7)No substantial increase in standard of
living.
8)Corruption