What are the essential Drawbacks/Failures of Indian Master Plans?

What are the essential Drawbacks/Failures of Indian Master Plans?

Despite the fact that India had made rapid progress in the sphere of agricultural as well as industrial sectors but it is most disheartening to observe that it has miserably failed on many fronts. Its gains turn into insignificance when we highlight how it has failed to achieve declared objectives. However, its main failures are under mentioned:

What are the essential Drawbacks/Failures of Indian Master Plans?

1. Stagnant Economy:

When India was freed, it had deep marks of stagnation. During the phase of forty years of economic planning, its growth rate is zero or near zero.

According to one estimate, growth of national income was about 1.15 per cent during 1950 to 1980 per year and growth of per capita income was at less than 0.5 percent.

Similar trend has been noticed after the adoption of plans. This fact is also reflected from the national income by industrial origin. The occupational structure also provides gloomy picture as more than 70 per cent people are still engaged in agriculture sector.

2. Poverty:

These five year plans have miserably failed to make a dent on poverty as 40 per cent of population is still in tight grip of poverty. Poverty is greatly responsible for poor diets, low health and poor standard of living.

A proportion of the population has to go even without the most essential needs of daily life. In short, both underdevelopment and inequality are responsible for poverty in the country.

3. Unequal Distribution of Income and Wealth:

Another failure of the planning is that the distribution of income and other assets in rural and urban areas continues to be skewed.

The bulk of increased income has been pocketed only by the rich few while weaker section of the society lives from hand to mouth and lead a very miserable life. There is no second opinion to say that 2 per cent people of this country possessed 98 per cent wealth.

4. Mounting Unemployment:

The unemployment is a constant threat to the social atmosphere of the country as they resort to various unlawful activities. According to 30th round of the N.S.S. Survey, in March 1985, in the age groups of 5 these were only 9.20 million, in the age groups of 15 they were 8.77 million and in the age groups of 15 to 59, there were 8.67 million unemployed.

The pitiable position is found in rural areas where disguised unemployment and white collar unemployment (educated unemployment) in urban areas are in a deplorable position. The rising unemployment may be attributed to galloping population, capital intensive techniques, defective j education system and unstable agriculture.

5. Abnormal Growth of Population:

In all plans, main objective was to check over-population but it has miserably failed to bridge the galloping population. The rapid growth of population has aggravated the situation to the worst. This problem gives birth to twin problems of poverty and unemployment.

6. Inflationary Pressure:

Inflation has started with the onset of heavy doses of investment programmes during different five year plan periods. Now, it turned to the gravity of the problem as it has created serious imbalances in the socio-political and economic relations.

The people with fixed income group find it extremely difficult to maintain the standard of living. Abnormal rise in prices has generated other problems of corruption, black marketing, dishonesty and immorality etc.

7. Adverse Balance of Payments:

Truly, the production of agricultural and industrial sector has increased manifold but still we are dependent on imports. In our plans, we have stressed on export promotion and import substitution to correct the adverse balance of payments but no headway has been made in this direction.

It has continuously been un favourable. The situation has further deteriorated since the penultimate year of the Sixth Five Year Plan. The situation in Seventh Plan has not improved rather it is still dismal. During nineties also, position of external debt is not encouraging.

8. Unproductive Expenditure:

India is deficient in capital due to rising expenditure on unproductive channels. Moreover, huge investments are made on the construction of five star hotels and other wasteful consumption.

Its benefits go in the hands of few affluent people where generally wealth concentrates. Consequently, the rich becomes rich and the poor lag behind.

9. Huge Amount of Deficit Financing:

To mobilize the resources for different plans, government has absolutely failed to manage from internal resources. The government at this time is left with no alternative but deficit financing. At every successive plan, there is huge amount of deficit finance.

From 1950-51 to 1984-85 total amount of deficit financing in the country was Rs. 24,440 crores. During Seventh Plan, it was proposed to be Rs. 14,000 crores and Rs. 18,000 crore in Eighth Plan.

10. Biased Growth Profile:

At last, Indian plans have given many evils like the growth of monopolistic practices, large inequalities, and poverty but still it has delivered biased growth in favour of more well to do section of the society.

It has widened the gap between man to man, region to region. The result is that a large many are below poverty line.