what is the impact of 5 year plan on india?
Following are the impacts of Five year plans in Indian economy.
1. With the course of planning, gradually India has been able to increase the rate of growth of national income
2. The rate of per capita income has increased from 0.5% at the time of independence to 2% during the planning period.
3. The rate of saving increased from just 5.5% of the national income during 1950-51 to 37.7% during 2007-08. Similarly, the rate of investment also increased from 11.2% during 1950-51 to 39.9% during 2007-08.
4. There has been an improvement in both the economic and social infrastructure. Economic infrastructure such as power generation and shipping has recorded a manifold increase.
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.
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.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.
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).
Five Year Plans in IndiaFive Year PlansIndia at the time of independence was left with crippling economy by British, which needed attention and well planned strategies to boom again in the global market. The pioneers of the Indian government at then times formulated 5 years plan to develop the Indian economy.Thefive yearsplan in India is framed, executed and monitored by thePlanningCommission of India. Jawahar Lal Nehru was the chairman of the firstPlanningCommission of India.The duty of the chairman of theplanningcommission in India is served bythe Prime Ministerof the country. The tenth plan finished its term in March 2007 and the eleventh plan is currently underway.Objectives and success of different Five Year Plans in India: 1st Five Year Plan (1951-56)It aimed towards the improvementin the fieldsof agriculture, irrigation and power andthe planprojected to decrease the countries reliance on food grain imports, resolve the food crisis and ease the raw material problem especially in jute and cotton.Nearly 45% of the resources were designated for agriculture, while industry got a modest 4.9%.The focus was to maximize the output from agriculture, which would then provide the momentum for industrial growth.1st five year plan proved dramatic success asagriculture productionhiked, national income went up by 18%, per capita income by 11% and per capita consumption by 9%. 2nd Five Year Plan (1956-61)It projected towards the agriculture programs and to meet the raw material needs of industry, besides covering the food needs of the increasing population. The Industrial Policy of 1956 was socialistic in nature.The planaimed at 25% increase in national income.Second Five Year Plan showed a moderate success. Agricultural production was greatly affected by the unfavorable monsoon in 1957-58 and 1959-60 and also the Suez crisis blocked International Trading increasingcommodity prices.