Achievements in India during First Fifty years of Planning

The following points highlight the top fourteen achievements in India during first fifty years of planning. Some achievements are: 1. Increase in National Income 2. Increase in Per Capita Income 3. Increase in Per Capita Income 4. Development of Agriculture 5. Industrial Development and Others.

Achievement # 1. Increase in National Income:

National income, being an indicator of development, can show the progress of the economy achieved during plans. During the period 1950-51 to 1996-97, the national income of India at 1980-81 prices increased by 539 per cent. During the first fifty years of planning, the national income of the country has been increasing on an average growth rate of 3.8 per cent per annum.

The annual rate of growth of national income which was 3.6 per cent during the First Plan, after experiencing some marginal ups and downs, it reached the level of 4.9 per cent during the Fifth Plan and then to 5.8 per cent during the seventh plan and to 6.8 per cent during the Eighth plan and then finally to 5.4 per cent during the Ninth plan.

Thus the annual growth rate of national income in India which was all along below 5.0 per cent during the period ranging between First Plan to Fifth Plan but it has crossed the 5.0 per cent marks during the Sixth, Seventh, Eighth and Ninth plans.

Thus during first thirty years of planning, i.e., from 1950-51 to 1980-81, the annual average growth rate of national income at 1980-81 prices was 3.4 per cent. During 1980-81 to 1990-91 the economy registered a spectacular improvement and the annual growth rate of national income at 1980-81 prices was 5.3 per cent per annum. During 1990-91 to 2001-02, the same growth rate at constant prices stood at 5.5 per cent per annum.

Achievement # 2. Increase in Per Capita Income:

During the last fifty years of planning, the per capita income of India at 1980-81 prices has maintained its increasing trend but at a slow pace due to higher growth of population. During the period 1950-51 to 1996-97, the per capita income of India at 1980-81 prices increased by 145 per cent.

The annual rate of growth of per capita income which was 1.7 per cent and 1.9 per cent respectively during the First and Second Plan, gradually declined to a mere 0.1 per cent and 0.9 per cent respectively during the Third and Fourth Plan and then it gradually increased to 2.6 per cent during the Fifth Plan, 3.6 per cent during the Seventh Plan and then to 4.9 per cent during the Eighth Plan. In 2001-02, the per capita income at 1993-94 prices rose by about 4.3 per cent.

Achievement # 3. Increase in the Rate of Capital Formation:

Capital formation has been playing an important role in the attainment of economic development of the country. During the last fifty years of planning, the rate of gross domestic capital formation as per cent of GDP increased from a mere 10.2 per cent in 1950-51 to 26.2 per cent in 1997-98.

Accordingly, it rose from 14.3 per cent at the end of First Plan to 19.1 per cent at the end of Fourth Plan and then to 19.7 per cent and 25.1 per cent at the end of Sixth and Seventh Plan respectively and then finally to 24.6 per cent at the end of Eighth plan.

At the end of the Ninth Plan, i.e. in 2001-02, the same rate stood at 23.7 per cent. Thus, during the last five decades of planning India has been able to realise a considerable progress in attaining higher rate of capital formation.

Achievement # 4. Development of Agriculture:

Five year plans have made huge investment in the agricultural sector but the agricultural output could not achieve the targeted growth rate. During the initial part of planning increase in agricultural output was realised through extension of areas under cultivation.

Since Third and Fourth Plan onward, increase in productivity (yield per hectare) was recorded as a result of the adoption of new agricultural strategy and intensive cultivation in some selected areas or states of the country.

During the last fifty years of planning, the index of agricultural production (base : triennium ending 1981-82) has increased from 46.2 in 1950-51 to 148.4 in 1990-91 and then to 177.1 in 2001-02. Total production of food grains has also increased from 50.8 million tonnes in 1950-51 to 176.4 million tonnes in 1990-91 and then to 212.0 million tonnes in 2001-02 as a result of technological advancement.

During the last fifty years of planning, the annual average growth rate of agricultural production was above 2.6 per cent. But whatever impact of new agricultural strategy or green revolution that has been noticed during the plan periods that has remained limited to some states only, viz., Punjab, Haryana, West Uttar Pradesh, Maharashtra and Andhra Pradesh and that too remained limited mostly to the production of wheat.

But the average yield per hectare for all food-grains has recorded an increase from 5.5 quintals in 1950-51 to 7.6 quintals in 1964- 65 and then in the post-green revolution period the same yield rose to 17.3 quintals in 2001-02 as a result of the application of scientific methods of cultivation, HYV seeds, chemical fertilisers and expansion of irrigation facilities.

As a result, the per capita availability of food-grains and pulses has increased from 395 grams per day in 1951 to 466 grams in 1987 and then to 512 grams per day in 2001.

Achievement # 5. Industrial Development:

Industrial sector of the country has attained a considerable progress during period, of planning. During the last fifty years of planning huge investment in the public sector industry has been made. As on 1st April 1998, total investment in public sector enterprises stood at Rs 2,04,054 crore. Consequently, industries like steel, engineering goods, fertilizer, aluminium, petroleum goods recorded a significant progress.

The industrial sector has achieved a considerable degree of diversification and modernisation and also achieved a significant expansion of its industrial capacity. The index of industrial production (Base: 1993-94 = 100) has increased from 7.9 in 1950-51 to 91.6 in 1990-91 and then to 167.0 in 2001-02.

During the first 15 years (1951-65), i.e. during the first three plan periods, Indian industries experienced a steady growth rate of about 8 per cent. After experiencing some ups and downs during the next 20 years, the same industrial growth rate became steady since 1985-80 reaching at 8,6 per cent in 1985-86 and then to 12,8 per cent in 1995-96.

Since then the country again experienced a slowdown in industrial growth rate in recent years and reached the poor level of 2.5 per cent in 2001-02. But the Ninth Plan envisaged to achieve the annual growth rate of 8.5 per cent for the industrial sector.

Achievement # 6. Development of Infrastructure:

During the last fifty years of planning, the infrastructure facility of the country has attained considerable progress, especially in respect of transport and communication, irrigation facilities and power generation capacity.

Total length of railway route has increased from 53,600 kms in 1950-51 to nearly 63,028 kms in 1996-97. Freight carrying capacity of railway has increased from 9.3 crore tonnes in 1950-51 to 44.2 crore tonnes in 2000-01.

Similarly the passenger carrying capacity has increased from 129 crore in 1950-51 to 486 crore in 2000-01. Shipping capacity in overseas trade has increased from 0.2 million GRT in 1950-51 to 6 million GRT in 1984-85 and then to 7.02 million GRT in 2000-01.

The installed plant capacity of power projects in India has increased from 2.3 GW in 1950-51 to 33.3 GW in 1980-81 and then to 121.0 GW in 2001-02. Power generation has increased from 6.6 TWH in 1950-51 to 573.2 TWH in 2001-02.

Achievement # 7. Employment Generation:

Five year Plans in India have undertaken some special measures for removing the problem of unemployment in the country. During the last eight plans much stress was laid on the creation of larger employment opportunities, creation of larger industries, establishment and expansion of small scale and village industries along with improvement of agriculture and service.

During the first two plans employment opportunities were generated for about 16.0 million people. Again during 1961-71, about 20.0 million people got fresh job opportunities. Again during 1971-81, about 25.0 million people were given employment opportunities. During the Fifth and Sixth Plans, about 19.0 million and 34.0 million people were given employment opportunities.

The planning commission has recently estimated that additional employment opportunities of the order of 41.74 million were generated during the Eighth Plan. But with huge growth of number of working population, the backlog of unemployment at the end of each plan has been increasing at a rapid rate.

Total backlog of unemployment which was 5.3 million at the end of First Plan gradually rose to 20.7 million in 1980 and then to 58 million at the end of Eighth Plan and is expected to reach 94 million at the end of 2002.

Achievement # 8. Development of Social Services:

During the last fifty years of planning, social services like education, health, family planning etc. has improved considerably.

These can be studied under the following heads:

(i) Life expectancy at birth has increased from 32.1 years in 1950-51 to 60.9 years in 1997-98;

(ii) Birth rate has declined from 39.9 per minute in 1950-51 to 25.8 per minute in 2000;

(iii) The Death rate has declined significantly from 27.4 per minute in 1950-51 to 8.5 per minute in 2000 as a result of near eradication of dangerous epidemics and diseases like malaria and improvement in health facilities;

(iv) In respect of education, total enrolment of students at various levels has achieved a six-fold increase. Total number of collegiate has increased five-fold. This has become possible with the vast expansion of the educational system.

Moreover, the country has also developed a good number of universities, engineering colleges, medical colleges, technical institutes, management institutes etc. during this plan period. The literacy rate has also increased from 18.33 per cent in 1950-51 to 65.38 per cent in 2001.

(v) Health: Further, in order to improve the health condition of the people, in general, the country has developed an improved health system by developing a good number of hospitals, dispensaries and medical research centre.

As a result, there has been a considerable degree of progress in the number of hospitals, beds, doctors, nurses and other medical facilities like family planning clinic etc. Total number of hospitals and dispensaries has increased around 45,000.

Total number of registered medical practitioners (RMP) has increased from 61.8 thousands in 1950-51 to 501.9 thousands in 1997-98. RMP per 10,000 population has increased from 1.7 in 1950-51 to 5.7 in 1997-98. Number of beds (all types) per 10,000 population has also increased from 3.2 in 1950-51 to 9.3 in 1994-95.

Achievement # 9. Attainment of Self-reliance:

Five year plans in India set an objective to attain self-reliance in the economy and also to eliminate and phase out dependence on foreign aid gradually. During the last five decades of planning, the country has achieved a good rate of progress in achieving self-reliance. Since Fourth Plan onwards, the dependence on the foreign aid started to decline.

The proportion of foreign aid in financing our plans has declined from 12.8 per cent and 14.0 per cent during the Third and Sixth Plan respectively to 10.0 per cent and around 7.0 per cent during the Seventh and Eighth Plan.

The country is gradually being emerged out 98 3 self-reliant economy in various fields such as agricultural production, electronics, sophisticated technology etc. Even then, the country had failed to run the economy without depending on foreign assistance.

During the first part of 1990s, a huge amount of loan $ 5.0 billion SDRs taken by the Government on hard terms from IMF reflects its position in respect of self-reliance. But in recent year, the total foreign exchange reserve of the country has increased from US $ 26.4 billion at the end of March 1997 to US $ 73.58 billion at the end of January 2003. At the end of March 2003, total import cover by such foreign exchange reserve stood at 12 months.

Achievement # 10. Diversification of Exports and Import Substitution:

With the gradual diversification of Indian industries during the last five decades of planning, the composition of export of country has also broadly diversified. The composition of exports of the country has been changed from primary commodities to manufactures, handicrafts, mineral ores, jewelleries, engineering goods, leather goods as well as producer’s goods imported earlier, which are now being produced indigenously.

The growth rate of export which was only 2.2 per cent during the First Plan gradually rose to 18.0 per cent during the Fifth Plan and 20.0 per cent during the Seventh plan and then reached the peak rate of 29.9 per cent in 1993-94.

The same rate has now declined to only 8.8 per cent in 1998-99 and then again rose to 19.9 per cent in 2002-2003. In this way, diversification of exports and containment of import through import substitution have reduced the ugly pressure on the balance of payments position of the country.

Achievement # 11. Structural and Institutional Changes:

During last fifty years of planning, the country has attained considerable success in bringing structural and institutional changes in the economy. The major structural changes attained include: Changes in the sectoral contribution or composition of national income with increasing contribution of industries and services sector, shift in economic activities from agricultural to non-agricultural occupations; changes in occupational structure, shift towards modern technology; adoption of new techniques in agriculture etc.

Institutional changes have also been playing an important role in attaining economic development during the periods of planning. Such institutional changes include expansion of public sector; developing source of institutional finance; expansion of small and medium scale industries, introducing price support system and public distribution system, restrictions of monopoly practices and formation of human capital.

Moreover, the adoption of recent policy framework towards liberalisation and globalisation is also an important landmark in bringing structural changes in the economy.

Achievement # 12. Development of Science and Technology:

During last fifty years of planning, Five Year Plans have also attained a considerable growth of science and technology. This has led to development of a good number of technical and managerial manpower in order to meet the requirement of modern industrial structure.

Moreover, the country has attained considerable progress in respect of information technology (IT) and has earned a good name in supplying efficient manpower to foreign countries for their IT sector. In this way, India has not only become self reliant in many technical spheres but has earned a place in exporting technical expertise to some South-East Asian, Middle-East and African countries. This is, no doubt, a matter of pride for the country.

Achievement # 13. Price Stability:

Attaining economic stability has been considered as one of the important objectives of economic planning throughout the entire plan period. But during the last five decades of planning the country has been subjected to a series of economic fluctuations and this is more pronounced in respect of instability in the price level. Inability to contain rising prices has been considered as the biggest failure of economic planning of the country.

Although the general price level in the country rose at an annual average of 5 to 6 per cent during 1950-70 but it rose alarmingly at the average rate of 20 per cent during 1972-75. During 1979-81, there was again an inflationary spiral in price level at an average rate of 18 per cent.

During 1983-84 and 1984-85, wholesale price index gradually increased by 9.4 per cent and 7.0 per cent respectively. During 1985-90, i.e., during the Seventh Plan, the price level on an average rose by 6.8 per cent. But since the beginning of 1990, the country had to face a serious double-digit inflation of 11 to 12 per cent and then to 16.7 per cent in August, 1991.

In order to face this serious inflation and to restore price stability, the government took several initiatives during 1991-92 and in 1992-93. As a result of all these measures, inflation rate began to recede from September 1991 and stabilized between 12 to 14 per cent until the middle of July 1992.

Thereafter, the rate of inflation declined steadily and it has come down to 6.8 per cent in January, 1993. The same rate further rose to 10.2 per cent in March, 1994 and then declined to 4.4 per cent in January 19, 2003. Thus, this type of fluctuation in the price behaviour has been affecting the flow of income, savings and investment and thereby retarding the growth of the economy to a considerable extent.

Achievement # 14. Distributive Justice:

Economic planning has been raising the volume of agricultural and industrial production of the country to a considerable proportion. But in-spite of that the economy of the country could not attain a favourable change in the distributive pattern of income and wealth in favour of the rural poor.

The Growth of monopoly houses in the industrial sector has widened the disparities of income and wealth between the rich and poor. Besides, the poverty eradication programmes under planning of the country in many occasions has failed to reach the poorest among them.

Moreover, the economic planning of the country has failed to achieve much the direction of balanced regional development due to its faulty strategy and improper allocation of resources thereby accentuating the regional imbalances in the country.

Conclusion:

In conclusion, it can be observed that the achievements of planning in India is far short of its targets. The country has been experiencing great deviation between the ideology of the Government and actual economic realisation. Thus to fulfil the various objectives of planning, Indian planners should set realistic targets and introduce new strategies for achieving these targets. Shortfall in respect of realisation of targets must be minimised.

While formulating these plans, Indian planners were too ambitious and they failed to consider the real state of the economy and its technological and socio-economic constraints. The objectives of rapid economic growth with social justice is in conflict will each other.

Moreover, the country has been experiencing a conflict between production and employment. The development of basic and heavy industries under planning has enlarged the scope of raising the rate of economic growth of the country but adversely affected the scope of employment generation at a rapid rate.

The country has also experienced a serious crisis in respect of theory and practice of socialism. The introduction of land reform measures, panchayati raj, public distribution system and rapid expansion of public sector enterprises failed to yield satisfactory result as the very objectives of these initiatives suffered by moral crisis.

Late Sukhamoy Chakroborty, the then Chief Economic Advisor to Government of India, after making a critical review of Indian economic planning made following conclusions:

(a) The macro-economic performance of the economy remained moderately satisfactory in respect of GDP growth rates;

(b) The average rate of inflation experienced in India has remained a modest one in comparison to international standard which has become possible due to 3 per cent increase in annual production of food grains on an average and around 23 per cent increase in domestic saving rate;

(c) In respect of human capital formation a considerable rate of progress has been achieved in India during the plan period.

Accordingly, S. Chakraborty concluded that Indian development planning is not an ‘essay in failure’ rather on the whole it is a matter of ‘great success’.

In-spite of that Mr. Chakroborty listed some major weaknesses of planning in the country in the following manner:

1. Indian planning has failed to lift a large number of population above the poverty line. As per 38th National Sample Survey (1983-84), about 40.4 per cent of the rural population and 28.1 per cent of the urban population were lying below the poverty line.

“Even if these figures were accurate and comparable, they would still indicate that gross poverty exists in the country, as the norm used for these purposes is based principally on Calorie intake”.

2. Inefficiency is widespread in many areas of production which includes steel, fertilizers, transport, generation of power etc.

3. The occupational structures of the country remained almost unchanged. The country has failed to employ proportionately larger in industry.

4. The Mahalanobis strategy adopted in planning in India has failed in respect of logical implications of accelerated growth in the mixed economy of the country.

Thus, in conclusion, it can be observed that although the economic planning in the country has become successful to build social and economic infrastructure, to develop basic and heavy industries as well to enhance educational, health and public health facilities but it failed to eradicate poverty, to eliminate involuntary unemployment as well as to reduce the degree of inequality in the distribution of income and wealth.

Thus in-spite of all these efforts and achievements, the country had to face a high degree of poverty, unemployment and inequality as a consequence of failure to contain the high rate of growth of population in the country.