Objectives Of Indian Planning

S No	OBJECTIVES	EXPLANATIONS
1	Growth	The basic objective of the Indian five year plans is to increase national and per capita income in the country. High GDP means high investment inducement in economy which ultimately leads to high productivities and economic growth. During the planning period, India’s national income as well as per capita income rose, but not rapidly as the anticipated. •During 1971-72, the economy’s GDP has grown at a marginal rate of 1 per cent. •During the period 1991-92, the GDP registered a growth of only 1.4 per cent. •AND during 2002-03 the growth fell to 3.8 per cent. •However,  since  2004-05,  the  country’s  national  income  has registered an impressive growth. •And during 11th plan indian economy move quite impressive target of 7.5 % p.a.

2

Modernization                            and Competitiveness

Modernization and competitive market is the key to economic development. Modernization and competition must, however, take place in manner so as to achieve a common good of the maximum number of people. Since, there can be examples of products where there can be almost monopoly of the seller some amount of regulation is required. Before economic reform measures such as globalization and liberalization were initiated the Indian economy was largely a regulated and controlled one thus curtailing healthy competition and protecting the weaker. However, in order to modernize and increase the domestic as well as international competition the government of India has been de-regulating and de-controlling the Indian industries with regard to licensing, pricing, output etc especially after 1991 economic reforms. Keeping in view of the economic development of the country, the Competition Act, 2002 was enacted mainly to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets. Indian economy has been reasonably successful so far as per the targets set mainly with the benefits of increased competition and efficiency manifesting them in the higher recorded growth. However, this process itself still has some distance to go.

3

Inequality Reduction

One of the critical problems facing India's economy is the sharp and growing inqualities among India's different states and territories in terms of per capita income, poverty, availability of infrastructure and socio-economic development. The five-year plans have attempted to reduce regional disparities by encouraging industrial development in the interior regions, but industries still tend to concentrate around urban areas and port cities. Especially, after liberalization, the more advanced states are better placed to benefit from them, with infrastructure like well developed ports, urbanisation and an educated and skilled workforce which attract manufacturing and service sectors. Ever since India followed the path of planned economic development it is very difficult to believe that a redistribution of income in favour of less and poor class of people and reduction of concentration of power has actually taken place effectively. Between 1950-51 and 1973-74, per capita income rose by 1.5 per cent per annum. However, this small increase was unequally distributed. In a study conducted by Dandekar and Neelkantha in 1971 concluded that the condition of the bottom 20 per cent of the population had definitely deteriorated and for the next higher 20 per cent of the population had remained more or less stagnant. This clearly shows that the concentration of power in terms of income and wealth in the hands of few has increased.

4

Employment Generation

One of the basic failures of Planning Commission in India is its inability to reduce the level of unemployment and under- employment which has been increasing plan after plan. In spite of the implementation of ten five year plans, unemployment in India has been on the raise. The backlog of unemployed persons has been increasing year after year. According to Planning Commission, by the end of eight plan the backlog of unemployed persons was around 7.5 million. By the end of 1996-97, as per the estimates the combined incidence of unemployment and underemployment was around 10.5 per cent of the labour force at the end of 1996-97. But The Planning Commission’s emphasis on growth rather than on employment and the adoption of capital- intensive production rather than about intensive production is widely held responsible for the continuous increase of unemployment in India.

5

Poverty Removal

All Plans in India have had the reduction of poverty as one of their prime objectives, and there have been substantial achievements. But as is noted above, despite food grains surpluses, a major effort in primary education and basic health programmes, and an enormous multitude of special targeted interventions, the incidence of poverty remains unacceptably high. Poverty is highest in the poorest states, as would be expected, although there are exceptions such as Kerala which has a per capita income below the national average but has high literacy and good access to infrastructure. Prominent amongst these are Bihar, Orissa, Assam, Madhya Pradesh and, to a lesser extent, Uttar Pradesh. It was felt by the planning commission that the growth of the economy would be insufficient to eradicate poverty. Therefore, it was felt necessary to undertake specific measures to remove poverty. Thus, poverty removal programmes were made an integral part of the five year plans.

6

Self - Reliance

Self-reliance implies that a country is capable of meeting all its requirements either from domestic sources or has an ability to import them from abroad. Due to scarcity of capital and below average saving rate India had to depend on external foreign aid for meeting its import requirements. Besides the low rate of saving, the other factor, which compelled the government to seek foreign aid, was the persistent deficit in balance of payments.Therefore, the government, thus, accorded a top priority to the programmes of industrial development as soon as planning process began in India. As a part of planned efforts, a number of industries were setup in public sector. Today, even though India has completed its Ten Five Year plans is not a completely self-reliant economy, though its progress towards self-reliance in food grains, capital equipment, science and technology and capital formation is quite significant. The balance of payments situation right now is not precarious, but the country’s dependence on MNC’s foR setting up power projects and large oil imports raise serious doubts about India’s capability to become completely self-reliant in near future.

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