Five-Year Plans (FYPs) are centralized and integrated national economic programs. Joseph Stalin implemented the first FYP in the Soviet Union in the late 1920s. Most communist states and several capitalist countries subsequently have adopted them. China and India both continue to use FYPs, although China renamed its Eleventh FYP, from 2006 to 2010, a guideline (guihua), rather than a plan (jihua), to signify the central governments more hands-off approach to development. India launched its First FYP in 1951, immediately after independence under socialist influence of first Prime Minister Jawaharlal Nehru.[1]
Theeconomy of Indiais based in part on planning through its five-year plans, which are developed, executed and monitored by thePlanning Commission of India. The eleventh plan completed its term in March 2012 and the twelfth plan is currently underway.[2]Prior to the fourth plan, the allocation of state resources was based on schematic patterns rather than a transparent and objective mechanism, which led to the adoption of theGadgil formulain 1969. Revised versions of the formula have been used since then to determine the allocation of central assistance for state plans.[3]
The first Five-Year Plan was one of the most important because it has a great role in the launching of Indian development after the Independence. Thus, it strongly supported agriculture production and it also launched the industrialization of the country (but less than the Second Plan, which focused on heavy industries). It built a particular system of "Mixed economy", with a great role for the public sector (with an emergingWelfare State), as well as a growing private sector (represented by some personalities as those who published theBombay Plan).