Salient Features of India’s Five Year Plan
The first important feature of Indian planning is that it is totally democratic. India being the largest democratic country in the world has been maintaining such a planning set up where every basic issue related to its Five Year Plan is determined by a democratically elected Government. Moreover, while formulating a Five Year Plan, opinions of various tiers of Government, various organisations, institutions, experts etc. are being given due considerations.
2. Decentralised Planning:
Although since the inception of First Plan, the importance of decentralised planning was emphasized so as to achieve active people’s participation in the planning process, but the real introduction of decentralised planning was made in India for the first time during the Seventh Plan.
Thus decentralised planning is a kind of planning at the grass root level or planning from below. Under decentralised planning in India, emphasis has been given on the introduction of district planning, sub-divisional planning and block-level planning so as to reach finally the village level planning successfully.
3. Regulatory Mechanism:
Another important feature of Indian planning is that it is being directed by a central planning authority, i.e., the Planning Commission of India which plays the role of regulatory mechanism, so as to provide necessary direction and regulation over the planning system.
Thus under the present regulatory mechanism, every planning decision in India originates from the Planning Commission and being finally approved by the National Development Council. Moreover, the Planning Commission of India is also having adequate regulatory mechanism over the successful implementation of planning.
4. Existence of Central Plan and State Plan:
Another important feature of Indian planning is that there is the co-existence of both the Central Plan and State Plans. In every Five Year Plan of the country, separate outlay is earmarked both for the Central Plan and also for the State Plans. Central Plan is under the exclusive control of the Planning Commission and the Central Government, whereas the State Plan is under the exclusive control of State Planning Board and State Government which also requires usual approval from the Planning Commission.
5. Public Sector and Private Sector Plan:
Another notable feature of India’s Five Year Plan is that in each plan, a separate outlay is earmarked both for public sector and the private sector. In each five year plan of the country, public sector investment and private sector investment amount is separately fixed, which comprises the total investment in each plan. India, being a mixed economy, it is quite natural that a separate investment outlay for public as well as the private sector is being maintained in each plan.
6. Periodic Plan:
One of the important features of Indian planning is that it has adopted a periodic plan of 5-year period having five depurate Annual Plan components. This type of periodic plan approach is quite suitable for realizing its definite targets.
7. Basic Objectives:
One of salient features of Indian Five Year Plan is that each and every plan is guided by certain basic or fundamental objectives which are almost common in most of our plans.
The major objectives of economic planning in India mostly consist:
(a) Attainment of higher rate of economic growth
(b) Reduction of economic inequalities
(c) Achieving full employment
(d) Attaining economic self reliance
(e) Modernisation of various sectors
(f) Redressing the imbalances in the economy.
In general, Growth with social justice is the main objective of economic planning in India.
8. Unchanging Priorities:
Five year plans in India are determining its priorities considering the needs of the country. It is being observed that Indian Five Year Plans have been giving too many priorities on the development of industry, power and agriculture with minor modifications. Thus there is no remarkable changes in the priority pattern of Indian planning, although in recent years increasing priorities are also being laid on poverty eradication programmes and on employment generating schemes.
9. Balanced Regional Development:
Another salient feature of India’s Five Year Plan is that it constantly attaches much importance on balanced regional development. Development of backward regions is one of the important objectives of Indian planning. India’s planning system has even isolated some states under “special category states” so as to channelize additional resources to these backward states for their rapid development. Special budgetary relief in the form of tax holiday or tax relief for establishing industries into back-ward regions of the country.
10. Perspective Planning on Basic Issues or Problems:
Another important feature of Indian planning is that it has adopted the system of perspective planning on some basic issues or problems of the country, for a period of 15 to 20 years on the basis of necessary projections.
11. Programme Implementation and Evaluation:
Indian planning system is broadly supported by programme implementation machinery, which used to play a very important role. Programme implementation machinery includes various Government departments which are usually involved for the implementation of the plan. More there is an evaluation machinery which usually conducts pre-project evaluation and post-project evaluation of every planning project of the country.
12. Shortfalls in Target Realization:
Another notable feature of India’s Five Year Plan is its shortfalls in target realization. Although targets are fixed for every plans in respect of rate of growth of national income, employment, population, production of some important items etc. But in most of the cases these targets are not fulfilled to the fullest extent, excluding certain specific cases.
Such shortfalls in target realization lead to the problems of spill over of projects into next five year plans and cost over-runs. Thus we have seen that salient features of India’s Five Year Plans, although numerous but some of these are quite common to that of other countries while some are very much uncommon even.
Achievements of Planning:
1. A Higher Growth Rate:
Economic planning in India aims at bringing about a rapid economic development in all sectors.
That is to say, it aims at a higher growth rate. India’s macroeconomic performance has been only moderately good in terms of GDP growth rates.
The overall rate of growth stands at 4.8 per cent for the whole planning period (1950-2007) Compared with India’s own past (1900- 1920) when she was caught in a low level equilibrium trap, growth acceleration during the last 60 years has been impressive indeed.
2. Growth of Economic Infrastructure:
India’s performance in building up the necessary economic infrastructure is really praiseworthy. At the inception of economic planning, road kilometer was 4 lakh kms. India has now more than 3 million km of road network, making it one of the largest in the world.
Railway route length increased from 53,596 kms in 1951 to nearly 63,500 kms in 2005- 06. Today, the Indian railway system is the largest in Asia and the fourth largest in the world. Similarly, other modes of transport like shipping, civil aviation, etc., have also expanded phenomenally.
3. Development of Basic and Capital Goods Industries:
Another major area of success of Indian planning is the growth of basic and capital goods industries. With the adoption of the Mahalanobis Strategy of development during the Second Plan period, some basic and capital goods industries like iron and steel witnessed spectacular growth.
4. Higher Growth of Agriculture:
The most significant aspect of India’s Five Year Plans is that the overall rate of growth of food production has now exceeded the rate of growth of population. Though in the early years of planning, agricultural performance was miserable resulting in the emergence of food crisis.
But now, due to the impact of bio-chemical revolution in Indian agriculture, food crisis seems to be a thing of the past. She has attained self-sufficiency in food grains.
5. Savings and Investment:
The rise in the domestic savings rate from 10 p.c. of GDP at the initial stages of planning to around 19 p.c. in 1980-81 is definitely impressive. However, this rate increased to 34.8 p.c. by the end of March 2007. Similarly, India’s record in gross domestic capital formation rose from 20.3 p.c. in 1980-81 to 22.8 p.c. of GDP in 2001- 02. But it rose to 36 p.c. in 2006-07.
Major Failures of Planning:
Indian planning is yet to score good marks.
The major areas of failure of planning in India are:
1. Inadequate Growth Rate:
In quantitative terms, the growth rate of the Indian economy may be good but not satisfactory by any standards. Except the First and Sixth Five Year Plans, the actual growth rate remained below the targeted growth rates of GNP and per capita income.
Only in recent plans (both Ninth and Tenth plan), actual growth rate has exceeded the plan targets. In terms of per capita income, India is one of the poorest nations of the world even after more than 58 years of democratic planning.
2. Whither India’s Socialistic Society:
Indian planning aims at building up a ‘socialistic pattern of society’, in an otherwise capitalistic framework, through various socialistic measures. We have not yet made any significant progress towards the goal of attaining a socialistic pattern of society even after nearly 58 years of planning.
The concept of socialistic pattern of building a society has been altogether discarded when we introduced new economic policy measures in mid-1991. Instead, Indian economy very much moves on the capitalistic path.
3. Economic Inequality and Social Injustice:
The twin aspects of social justice involves on the one hand, the reduction in economic inequalities, and, on the other, the reduction of poverty. A rise in national income with concentration of economic power in the hands of a few people is not desirable.
In an otherwise capitalist framework, inequality in the distribution of income and wealth is inevitable. In India’s socio-political set-up, vast inequalities exist. Indian plans aim at reducing such inequalities, so that the benefits of economic development percolate down to the lower group of the society.
The objective of removal of poverty got its clear-cut enunciation only in the Fifth Plan for the first time. Due to the defective planning approach, income inequality widened and poverty became rampant. The incidence of poverty was on the rise. It is now nearly 28 p.c. (2004-05).
Removal of unemployment is considered to be another important objective of India’s Five Year Plans. But, unfortunately, it never received the priority it deserved. In the Sixth Plan (1978-83) of the Janata Government, employment was accorded a pride of place for the first time.
However, the Seventh Plan treated employment as a direct focal point or policy. As a result, the employment generation programme in India has received a rude shock and the problem of unemployment is mounting up plan after plan. The number of job-seekers increased from 363 lakh as on December 1991 to 406 lakhs as on June 2006. In the recent years, the trend is on the rise.
In view of this, it is jokingly said that “how many plans the country needs to make the whole country unemployed?” In view of these failures, Sukhamoy Chakraborty remarks that Indian plans may be good on paper, but are rarely good in implementation. So, the need of the hour is to formulate a correct economic policy as well as its implementation.