In this article we will discuss about the Ninth Five Year Plan in India. After reading this article you will learn about: 1. Objectives of the Ninth Plan (1997-2002) 2. Targets of the Ninth Plan 3. Draft Ninth Five Year Plan (1997-2002) Approved by NDC 4. Public Sector Outlay and Plan Allocations of the Ninth Plan 5. Appraisal of the Ninth Plan (Achievements).
Objectives of the Ninth Plan (1997-2002):
The Planning Commission has finalised the objectives of the Ninth Plan keeping in conformity with the Common Minimum Programme (CMP) of the United Front Government and also in consultation with the Chief Ministers of different states on maintenance of basic minimum services.
The draft Approach Paper of the Ninth Plan has outlined the following important objectives for the Plan:
(i) Accelerating the rate of economic growth with stable prices;
(ii) Giving priority to agriculture and rural development with a view to generate adequate productive employment and eradication of poverty;
(iii) Attaining food and nutritional security for all, particularly for vulnerable sections of the society;
(iv) Providing basic minimum services of safe drinking water, primary health care facilities, universal primary education, shelter and connectivity to all in a time bound manner;
(v) Containing the population growth of the country;
(vi) Ensuring environmental sustainability of the development process through social mobilization and participation of people at all levels;
(vii) Empowering women and all socially disadvantaged groups such as scheduled castes, scheduled tribes and other backward classes and minorities as agents of socio-economic change and development;
(viii) Promoting and developing people’s participatory institutions like Panchayati Raj, Co-operatives and self help groups;
(ix) Strengthening efforts to build self-reliance.
The aforesaid objectives are finalised to achieve “growth with equity” and the same strategy should get reflected in four dimensions of state policy, which include:
(a) Quality of life of the citizens;
(b) Generation of productive employment;
(c) Regional balance and
It would be better to analyse briefly these four dimensions.
(a) Quality of Life:
In order to improve the quality of life of the people in general, eradication of poverty and provision of basic minimum services have been considered as integral elements. Removal of poverty is nowadays very much attached to the growth process. Side by side provision for basic minimum services are also very essential in this direction.
The Ninth Plan has identified for priority attention and provision for seven basic services in a time bound manner. These are:
(i) Safe drinking water,
(ii) Availability of primary health service facilities,
(iii) Universalisation of primary education,
(iv) Provision of public housing assistance to all poor shelter-less families,
(v) Nutritional support to children,
(vi) Connectivity of all villages and habitants by roads,
(vii) Targeted public distribution system for the poor; the policy and programmes of the Ninth Plan has given a thrust on the aforesaid matters.
(b) Generation of Productive Employment:
The Ninth Plan has incorporated a primary objective to generate greater productive employment in the growth process of various sectors and by adopting labour- intensive technologies in the unemployment prone areas. In order to enhance employment opportunities for the poor the Ninth Plan has undertaken a National Employment Assistance Scheme.
(c) Regional Balance:
In order to attain regional balance, the Ninth Plan has allotted more public investment in infrastructural projects in favour of the poor and less developed states. In this respect, greater focus on agriculture and other rural activities in the backward areas and also development of transportation and communication facilities in those backward areas can also serve the purpose of attaining regional balance.
With the gradual opening up of the economy with the globalisation process, the attainment of “self reliance” is still being accepted as an important element of the development policy and strategy.
Therefore, the Ninth Plan has incorporated attainment of self-reliance as an important development strategy through: ensuring, balance of payments sustainability, avoidance of external debt, generating investible resources domestically, attaining self sufficiency in food and attaining self-reliance in technology.
Targets of the Ninth Plan:
Fixation of targets is considered as an important part of the formulation of plan.
Ninth Plan has set some macro-economic targets in the following manner:
The draft approach paper has also fixed 7 per cent GDP growth target for the Ninth Plan period along with 4 per cent growth rate to be attained in the agricultural sector and 9.3 per cent growth rate to be attained in industrial sector. The growth of investments has been pegged at 28.6 per cent, while savings rate has been put at 26.2 per cent of GDP and Incremental Output Ratio at 4.08 per cent.
The draft paper has also pegged the fiscal deficit at 4 per cent of GDP during the Ninth Plan. The draft paper also appears to take the view that the current account deficit in the balance of payments would be around 2.4 to 2.3 per cent.
The draft approach paper has identified the “growth with equity” as the main focus of the plan. The draft paper also observed that the Ninth Plan will emphasize strongly on the development of the small scale industry sector which contributes significantly to the gross domestic product, besides according a prominent place to agriculture.
The “basic thrust” of the Ninth Plan would be on providing basic minimum services to the people and thereby double the provision for rural development from Rs 30,090 crore in the Eighth Plan to Rs 60,000 crore and enhance capital investment in critical infrastructure areas.
Draft Ninth Five Year Plan (1997-2002) Approved by NDC:
On 19th February, 1999, the National Development Council (NDC) finally endorsed the draft Ninth Five Year plan (1999-2002) which has projected a GDP growth rate of 6.5 per cent. The main thrust of the Ninth Plan is to achieve a growth rate of 6.5 per cent with a Central budgetary support of Rs 3,74,000 crore and a total public sector outlay of Rs 8,59,200 crore.
With the growth rate slipping in the first two years of the Plan because of adverse economic conditions, the draft has projected a growth rate of 7.0 per cent for the next three years.
Acknowledging Prof. Amartya Sen’s idea of giving increasing importance on technological knowledge and basic education, for enhancing the level of human capital in India, the Government of India has incorporated the same into Ninth Five Year Plan.
The draft Ninth Plan made a provision of Rs 21,946 crore for the Special Action Plan of the Prime Minister. Thus SAP places emphasis on food and agriculture, physical infrastructure, information technology, water resources policy and health education and housing.
Finalization of Sectoral Targets of the Ninth Plan:
The draft Ninth Plan has finalised the sectoral growth targets for different sectors. Table 11.3 shows the sectoral growth targets of the Ninth Plan.
Table 11.3 reveals the sectoral growth targets for the different sectors of the country to be attained during the Ninth Plan. Considering the slowdown of the economy in recent years, the draft Ninth Plan has reduced the overall growth targets in GDP from 7.0 per cent to 6.5 per cent. The agricultural growth target has also been reduced from 4.5 per cent to 3.9 per cent.
The sectoral growth targets for mining and quarrying and manufacturing sector were fixed at 7.2 per cent and 8.2 per cent respectively. The targets for electricity, Gas and Water supply has been re-fixed at 9.3 per cent.
The targets for the growth of construction and trade was fixed at 4.9 and 6.7 per cent respectively. The growth targets for communications and financial services were fixed at 9.5 and 9.9 per cent respectively and that of rail transport and other transport were fixed at 3.9 per cent and 7.4 per cent respectively.
Public Sector Outlay and Plan Allocations of the Ninth Plan:
Total public sector outlay of the Ninth Plan was finalised at Rs 8,59,200 crore. The allocations of public sector plan outlay under different heads gives a clear picture about the strategy of the plan. The following table shows the proposed public sector outlay and the plan allocations under different heads.
Table 11.4 reveals the distribution of public sector-outlay of the Ninth Plan under different heads. This sectoral allocation of the public sector outlay also reflects the priorities of the plan.
It is observed that among all the heads, the Ninth Plan has allocated the maximum amount of outlay on energy, i.e., Rs 2,15,545 crore which is around 25.1 per cent of the total outlay, followed by social services to the extent of Rs 1,82,005 crore which is around 21.2 per cent of the total outlay.
The Ninth Plan has allocated 14.1 per cent of the total outlay transport, 8.5 per cent on rural development, 8.1 per cent on industry and minerals, 6.5 per cent on irrigation and flood control, 5.5 per cent on communication and 4.4 per cent on agriculture and allied sector.
It is also evident from the table that about 44.7 per cent of the total outlay is earmarked for energy, transport, communication considering the huge shortage of infrastructure facilities, the Ninth Plan has allocated about 45.0 per cent of the total outlay on the construction and development of economic infrastructure of the country.
Appraisal of the Ninth Plan (Achievements):
Under the environment of political instability, the Ninth Plan had to pass it first two years facing change of Governments at the Centre in quick succession leading to a serious embarrassment to the planners of the country.
After the NDA Government came to power, the draft paper of the Ninth Plan was revised by the Government and the revised draft got final approval from National Development Council in February 1999, when the two years of the Plan were almost completed.
As the Ninth Plan has already completed its duration, under this backdrop it is therefore necessary to review achievements of the plan. Although up-to-date information is not readily available for making such appraisal but the observations made by the Economic Survey, 2000-2001 is an important input in this regard. Let us now examine the appraisal of the Ninth Plan on the basis of these statistics available so far.
a. Growth Rate:
In respect of attaining annual growth rate of GDP, approach paper of the Ninth Plan had initially set the target of attaining 7.0 per cent annual growth rate of GDP but considering the slowdown of the economy, the draft Ninth Plan had reduced the overall growth targets in GDP from 7.0 per cent to 6.5 per cent.
But the Economic Survey 2001-2002 reveals that the growth rate of GDP which was only 4.8 per cent in 1997-98 gradually increased to 6.5 per cent in 1998-99 and then decelerated marginally to 6.2 per cent in 1999-2000 and then to 4.4 per cent in 2000-01 and then to 5.6 per cent in 2001-02.
Thus the annual average growth rate during the Ninth Five Year Plan (1997-2002) is now estimated at 5.4 per cent which is lower than the plan target of 6.5 per cent.
Gross Domestic Savings and Investment:
Draft Ninth Plan had set the target of gross domestic savings rate at 26.1 per cent of GDP but the same rate at current prices, during the first three years of the Plan could reach at level of 23.1 per cent in 1997-98, 21.5 per cent in 1998-99 and 24.1 per cent in 1999-2000, 23.4 per cent in 2000-01 and 24.0 per cent in 2001-02.
The gross domestic investment as per cent of GDP at current prices reached the level of 24.6 per cent in 1997-98, 22.6 per cent in 1998-99 and 25.2 per cent in 1999-2000 and 24.0 per cent in 2000-01 and 23.7 per cent in 2001-02 as against the annual average target of 28.2 per cent.
b. Sectoral Growth:
Although the draft Ninth Plan had set a target to attain annual average growth rate of 3.9 per cent in Agriculture and allied sector but during the Ninth Plan it has attained 2.7 per cent growth rate. The same sector attained the growth rate of (-) 2.7 per cent in 1997-98, 7.6 per cent in 1998-99, (-) 0.9 per cent in 1999-2000, (-) 0.4 per cent in 2000-01 and finally 5.7 per cent in 2001-02.
The index of agricultural production (1981-82 = 100) increased from 165.3 in 1997-98 to 177.9 in 1998-99, 176.2 in 1999-2000, 164.6 in 2000-01 and finally to 175.9 in 2001-02.
Total production of food-grains has also increased substantially from 192.3 million tonnes in 1997-98, 203.6 million tonnes in 1998-99, 212.0 million tonnes in 1999-2000 and then declined to 195.9 million tonnes in 2000-01 and then again increased to 209.2 million tonnes in 2001-02. Thus, agriculture and allied sectors have shown a mixed performance during the period of Ninth Plan.
In respect of mining and quarrying the Ninth Plan has set a target of attaining growth rate of 7.2 per cent but during the plan, this sector could attain an average growth rate of 2.2 per cent. The yearly growth rate of this sector was 6.9 per cent in 1997-98 and then the same growth rate declined to (-) 0.8 per cent in 1998-99, 1.0 per cent in 1999-2000 and 2.8 per cent in 2000-2001 and 1.2 per cent in 2001-02.
As against the targeted growth rate of 8.2 per cent in the manufacturing sector during the Ninth Plan, this sector could attain on an average 5.28 per cent growth rate during the plan. Again, in respect of Electricity, Gas and Water supply, as against the targeted growth rate of 9.3 per cent, this sector could attain the growth rate of 5.5 per cent during the plan.
But taking the industry sector as a whole, this growth rate attained in this sector was 6.7 per cent in 1997-98 and 4.1 per cent in 1998-99 but then the same growth rate increased to 6.7 per cent in 1999-2000 and 5.0 per cent in 2000-2001 and 2.7 per cent in 2001-02.
Transport and Communication:
Ninth Plan set a target of 3.9 per cent for rail transport, 4.4 per cent in ether transport and 9.5 per cent in communication sector, but during first three years of the plan these sectors could attain an average growth rate of 3.1 per cent, 5.6 per cent and 14.1 per cent respectively.
As against the targeted growth rate of 6.7 per cent in the trade sector during the Ninth Plan this sector could attain on an average 6.7 per – cent growth rate during the first three years of the plan.
As against the targeted growth rate of 9.9 per cent in the financial services sector during the Ninth Plan, this sector could attain on an average 11.4 per cent growth rate during the first three years of the plan. Again, in respect of other services, as against the targeted growth rate of 6.6 per cent, the actual realisation of the target during the first three years of the plan was 8.8 per cent.
But taking the services sector as a whole, the growth rate attained in this sector was 9.8 per cent in 1997-98, 8.2 per cent in 1998-99, 9.6 per cent in 1999-2000 and 6.5 per cent in 2000-2001.
During Ninth Plan, the price behaviour of the country reflects a moderate behaviour in its price level. Accordingly, the average rate of inflation (WPI) which was 4.4 per cent in 1997-98, gradually rose to 5.9 per cent in 1998-99 and then declined to 3.3 per cent in 1999-2000 and again rose to 7.1 per cent in 2000-2001 and finally to 4.4 per cent in 2001-02.
Indian economy has thus experienced a mixed performance during Ninth Plan period. Although the country has experienced a slow-down in the growth path in the initial period of the ninth Plan but it has been able to reverse the situation towards a favourable path in the latter part of the plan.
The Economic and Social Survey of Asia and Pacific (ESCAP), 2001 released by United Nations predicts that the Indian Economy, expected to grow 6.9 per cent in 2002 and 7.2 per cent in 2003, to be among the fastest growing economies in Asia after China, Malaysia, Vietnam and Laos.
Economic Survey, 2000-2001, in this connection observed, “In view of the many changes that have taken place, it is now quite possible for the Indian Economy to attain an even higher growth path. However, as has been outlined above, crucial action is required in a number of key areas in order to obtain the full benefits of the reforms carried out so far. If these measures are accomplished in an organised manner in the near future, it is quite likely that many of the latent energies that are yet to be released in the country would become apparent and a higher level of economic activity would emerge.”