COMMON GOALS OF FIVE YEAR PLANS
Economic System :- It refer to an arrangement by which central problem of an economy are solved.
Central problem of an economy
In all economy, the available resources are limited in relation to their requirements. Therefore, every economy faces three central problems. These are offshoots of the basic problem of resource allocation. These are:
What to produce : It is the problem of choosing which commodities should be produced and in what quantities. Because resources are scares, we cannot produce everything in whatever quantity we wish to. We are bound to be faced with the problem of what to produce.
Every economy faces this problem because, in every economy, resources are scarce in relation to unlimited wants.
How to produce : The problem of how to produce is a problem relating to choice of technology. there are two techniques of production :
(1) Labour intensive technique in which Labour is used more than capital
(2) capital intensive technique in which capital is used more than labour. An economy must decide as to which technique is to be used so that efficient production is obtained
Labour and capital are two factors of production. These are to be combined ideally, so that maximum of output is obtained per unit of input. But in India, Labour is abundant in relation to capital. If we focus on an ideal ratio(between labour and capital) lots of labour would remain unutilised. Massive unemployment itself is a social evil. Accordingly, the government of our country may decide to use more of labour and less of capital even when we are departing from the ideal factor ratio. The problem of how to produce thus is a central problem.
For whom to produce: the central problem of ‘for whom to produce’ means that ‘who will buy the goods produced? Clearly, those who have income will buy. But the real question arises- from where the money income comes? The source of money income is the national income. People earn income in the form of wages, rent, interest and profit. Thus, the central problem of ‘for whom to produce’ concerns with the problem of distribution of income among people.
Economy : An economy is a system that provides people with the means to work and earn a living in the process of production
Market economy : A market economy is the one in which the means of production are owned, controlled and operated by the private sector. Production is done mainly for earning profit.
Or
A market economy is one in which all economic activities are organised through the market, through price mechanism.(it called also capitalist economy)
Centrally planned economy:- A socialist economy is the one in which the means of production are owned controlled and operated by the government.
Or
A centrally planned economy is one in which all important activities are planned and decided by the central planning authority or the government.
Mixed economy: It is an economy in which public sector and private sector co-exist with each other. Here central problems of an economy are solved partly through direct planning and partly through market
What is the meaning of five years plan and Why did india opt for planning?
Plans are made to fulfill a predetermined purpose. It is called economic planning, in which the central officer determines
the programs and policies.
India was a backward economy at the time of independence, and the leaders of the country had to initiate a process of development which raised the standard of living of the people and opened new opportunities for a prosperous and more employment for the people. The Soviet Union had achieved a very high rate of development through the planning process, which attracted our leaders. So India also opted to plan.
Why should plans have goals? What are goal of five year plans.
Plans should have goals so that we know what our target is and we can work systematically to achieve these objective, within a specified period of time.
Goal of five year plans :-
The Planning Commission was established in 1950 and the era of five year plans began. India has completed the Twelfth Five Year Plan.
The major goals of five year plans
Increase in Gross Domestic Product:- It refers to the increase in the capacity of the country to produce goods and services. It implies either a large stock of productive capital in the country or an increase in the proficiency of productive capital and services like transport, banking and communication etc. this growth must be continuous
Modernization:- It is necessary to adopt new technology in order to increase production of goods & services. Adoption of new technology is called modernization.
However, modernization does not refer only to the use of new technology but also to change in social outlook such as women empowerment. A modern society makes use of the talents of women in the work place so that the society will be more civilized and prosperous.
Self-reliance: It refers to the use of country’s resources to promote economic development and modernization without using imported resources from other countries. This means avoiding imports of those goods into India which encourage unnecessary foreign interference in our country’s policies, this is necessary to reduce our dependence on foreign countries.
Fair distribution:- It means equal distribution of income and wealth among the people. It is important to ensure that the benefits of economic development reach the poorer sections of the society and not the rich. Be able to complete the facilities.
Full employment :- All those people who are ready to work at the present rate of wages and are also able to work. If all of them get employment, then that situation is called full employment situation. It is a long term objective in planning that everyone should get employment.
Note: – Full employment does not mean that no one will be unemployed, there is always structural and conflict unemployment in the economy.
Short Term Objectives :- These objectives keep on changing depending on the demand of time in the plan.
Time duration and purpose of each scheme :-
First plan :- 1 April 1951 – 31 March 1956
1. Increase in production 2. Equal distribution of production, income and wealth
Second plan :- 1 April 1956 – 31 March 1961
1. Increase in Industrial Production 2. Develop Heavy Industry
Third Plan :- 1 April 1961 – 31 March 1966
1. Self-reliance in the production of food grains 2. To increase employment opportunities
2. Reducing Inequality
After this, the one-year plan was conducted from 1966-1969, after that the five-year plan started again in 1969.
Fourth Plan :- 1 April 1969 – 31 March 1974
1. Accelerating the pace of development
2. Stabilizing Prices
Fifth Plan:- 1 April 1974 – 31 March 1979
1. Raising the standard of living mainly to the weaker section of the society
Sixth Plan :- 1 April 1980 – 31 March 1985
1. Elimination of poverty. 2. Reducing Income Inequality
2. Developing the infrastructure.
Seventh Plan :- 1st April 1985 – 31st March 1990
1. To create new employment opportunities 3. To increase agricultural productivity.
After this, the one-year plan was conducted from 1990-1992, after that again in 1992 the five-year plan started.
Eighth Plan :- 1st April 1992 – 31st March 1997
1. Full use of human power by the end of the century
2. To take primary education to all the sectors 3. Strengthen the infrastructure
Ninth Plan :- 1st April 1997 – 31st March 2002
1. Agriculture and Rural Development 2. Growth with Price Stability 3. Controlling Population Growth
Tenth Plan :- 1 April 2002 – 31 March 2007
1. Improve the quality of life by increasing the level of consumption and improving the facilities related to health and education.
To improve the quality.
2. Reducing inequalities through inclusive growth.
Eleventh Scheme :- 1st April 2007 – 31st March 2012
1. Multi-faceted goal which set not only to develop but also aimed at reducing poverty
2. Improving the quality of education and public health services
3. Generation of high degree of employment 4. Strategy for Second Green Revolution
4. Protection of Environment
Twelfth Plan :- 1 April 2012, March 2017
1. Faster, Sustainable and More Inclusive Growth
2 . 9% growth in GDP
Five Year Plans Achievements :-
Increase in National Income: -During the British rule, ,the national income had increased at the rate of 0.5% per annum. In the first plan it was kept at 2.1 % whereas it was actually achieved 4.4%, from the second plan it has been increased to 5% or more, but only after the fifth plan, we were able to achieve this target. In the eleventh plan, It was kept at 9%.
Increase in per capita income: – increase in per capita national income during the British rule was nominal but in the plans it was
2.9% on average. In the tenth plan, this increase was 6.1%, this shows that the increase in this was more than the population growth, which was satisfactory for the country.
Increase in the rate of capital formation :- It depends on the rate of saving and the rate of investment and has increased significantly over the duration of the plans. By the end of the first plan, the increase in the rate of saving was 12.3% of the increase in national income. At the beginning of the Eleventh Plan it increased to 37.7%, while the increase in investment was from 10% to 35.7%, which shows the development of our country.
Institutional and technical changes in agriculture: – These changes were of two types: (1) Land reforms: – Under this, the elimination of intermediaries, regulation of rent, ceiling of land holdings and redistribution their size by consolidation of holdings. (2) In 1966, the changes that took place in technology were commendable. This led to a considerable increase in agricultural production and productivity, which is known as the Green Revolution. This increase in the production of cereals increased by about 6 times in 2010-11 and we can say India has become self-dependent in food production.
Development of industries: – Due to the schemes, there has been a lot of success in the industrial sector, industries like iron, steel, machinery, fertilizers, chemicals etc. have been modernized and the production capacity has increased significantly, their growth rate has been about 6.9% in the plans.
Economic infrastructure:- Transport, communication, irrigation facilities, banking and insurance facilities are its elements, in this field also India got respect at the international level.
Social infrastructure: – Health and education comes under this, the death rate which was 27 per thousand in 1951 has come down to 7.2 per thousand in 2010, three times the number of school going students and 5 times the number of college going students. increased |
Employment: – Where in the first plan 70 lakh people got employment from these schemes, then in the eighth plan it was 398 lakh and in the eleventh plan it was targeted to increase to 580 lakh.
International trade: – Due to these schemes, there was a manifold increase in the value of imports and exports, the foreign trade was 792 crores in 1948, which increased to 28,26,116 crores in 2010.
Failures of Five Year Plans :
1 Planning has failed to remove poverty, about 29.5% of the population in India is still living their life below the poverty line, if we compare with the world’s poor, then every 5th poor person in the world is an Indian.
2 Prices are increasing continuously, due to this, the gap between the rich and the poor is increasing, except in the first plan, inflation has increased every time. In 2011 it reached 9.4%, currently it is increasing more rapidly.
3. It has also not proved successful in removing unemployment, 53 lakh people were unemployed in the first plan and in 2009 their number is more than 40 million. This is becoming a threat to the social unrest in the country and to the development process.
4. The development of infrastructure is insufficient during planning, especially the lack of electricity is becoming an increasing hindrance in the process of overall development and growth of the country.
5 Economic and social inequality has become a growing challenge for the government.
Five year plans were not completely successful