Just after the attainment of independence, the Government of India set up the Planning Commission in 1950 to make an assessment of the material, capital and human resources of the country and to formulate a plan for its most effective and balanced utilization of the country’s resources.

The first Five Year Plan was launched in 1951 and with this India embarked upon the programme of planned economic development of the country. The First Five Year Plan covered the period 1951-56 followed by the Second Plan (1956-61) and the Third Plan (1961-66). After a Plan Holiday following the severe impact of exogenous shocks such as hostilities with Pakistan and unprecedented drought for two successive years 1965-66 and 1966-67, the country resumed the Fourth Plan in 1969 covering the period 1969-74.

Then came the Fifth Five Year Plan (1974-79) which did not complete its five years because of the change of party in power. With the coming into power of the Janta Party Government, the Sixth Five Year Plan was launched in 1978 covering the period 1978-83. Again, with the change in Government in 1980, the new Sixth Five Year Plan was started, covering the period 1980-85 and followed by the Seventh Plan (1985-90) which was completed by March-end, 1990.

The Eighth Five Year Plan, to begin from April, 1990 covering the period 1990-95 could not be finalised and, again, we had two years of annual plans. After a gap of two years, the Eighth Plan was launched in April 1992, covering the period 1992- 97 followed by the Ninth Plan in April 1997 covering the period 1997- 2002 and the Tenth Five Year Plan (2002-07) launched in April 2002.

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Objectives of Planning

The First Five Year Plan contains one of the clearest early formulations of the need for planning and of the State’s role in it. Planning, it pointed out, involves “acceptance of a clearly defined set of objectives in terms of which to frame overall policies…, formulation of a strategy for promoting the realization of the ends defined…, and working out a rational solution to problems – an attempt to coordinate means and ends”.

The launching of the First Five Year Plan in April 1951 initiated a process of development aimed not merely at raising the standards of living of the people but also opening out to them new opportunities for a richer and more varied life. This was sought to be achieved by planning for growth, and social justice.

The guiding principles of Indian Planning are infact provided by these objectives. Within this framework, each Five Year Plan involves such directional changes to take into account new constraints and new possibilities.

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Growth

Rapid economic growth has been one of the basic objectives of planning. The basic measure of economic growth is the continuous increase in real national income and per capita income. Each plan set for itself a target for raising national income and per capita income.

The target ranged from 2.2 per cent per annum in the First Five Year Plan to 6.5 per cent in the Ninth Five Year Plan. The 10th Five Year Plan proposes a target of 8 per cent GDP growth for the period 2002- 07. The actual achievement during the plans has been anywhere between 2.7 per cent and 6.8 per cent.

The growth of national income depends on a complex interaction of large number of variables, not all of which are amenable to government control. However, it is well known that the quantum of investment and the productivity of this investment, as measured in a simplified model by the capital output ratio, exercise an important influence on the overall growth rate.

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The deficiency in investment and the higher capital-output ratios are only the immediate arithmetical explanations for the shortfalls in the growth targets. A further analysis is necessary to identify the factors which would account for the departures from forecasts and targets for these two key magnitudes. Some part of the difference is attributable to a degree of unrealism in the forecasts; but in the case of investment and capital productivity, the explanation lies to a considerable extent in deficiencies in effective implementation of plans.

Sustainable Growth

The Indian planning process has always laid emphasis on measures to ensure sustainability of the development process not only in economic terms, but also in terms of social and environmental factors. Much of the measures adopted in the Agenda 21 of the United Nations Conference on Environment and Development already find reflection in the Indian plans.

The Ninth Plan was to carry this tradition further and consolidate on the creation of conditions for sustainable development. Rapidly growing population, urbanisation, changing agricultural, industrial and water resource management, increasing use of pesticides and fossil fuels have all resulted in perceptible deterioration in the quality and sustainability of the environment. It is recognised that environment protection does not only involve a prevention of pollution and of natural resource degradation, but has to be integrated with the overall development process and the well-being of people.