Planning Commission of India and its Five Year Plans

pg. 1 Xavier Institute of Social Service, Ranchi
1. INTRODUCTION
Rudimentary economic planning was first initiated in India in 1938 by Congress President
and Indian National Army supreme leader Netaji Subhash Chandra Bose (who had been
persuaded by Meghnad Saha to set up a National Planning Committee.
The "British Raj" also formally established a planning board that functioned from 1944 to 1946.
Industrialists and economists independently formulated at least three development plans in 1944.
The Planning Commission, as a central agency in the context of plural democracy in India,
needs to carry out more functions than rudimentary economic planning.
After India achieved Independence, a formal model of planning was adopted, and accordingly
the Planning Commission, reporting directly to the Prime Minister of India, was established on
15 March 1950, with Prime Minister Jawaharlal Nehru as the Chairman. Authority for creation
of the Planning Commission was not derived from the Constitution of India or statute; it is an
arm of the central Government of India.
THE PLANNING COMMISSION
The Planning Commission (Yojana Āyog) was an institution in the Government of India, which
formulated India's Five-Year Plans. It was located at Yojana Bhavan, Sansad Marg, New Delhi
and Jawaharlal Nehru as the first Chairman. In his first Independence Day speech in 2014 Prime
Minister Narendra Modi announced his intention to dissolve the Planning Commission. It has
since been replaced by a new institution named NITI Aayog
The main objective of the Government to promote a rapid rise in the standard of living of the
people by
 efficient exploitation of the resources of the country
 increasing production and
 offering opportunities to all for employment in the service of the community
The Planning Commission consists of The Prime Minister as the ex officio Chairman, the
committee nominates the Deputy Chairman, who is given the rank of a full Cabinet Minister,
Cabinet Ministers with certain important portfolios act as ex officio members of the
Commission, while the full-time members are experts of various fields like economics, industry,
science and general administration.

The ex officio members of the Commission, are the Finance Minister, Agriculture Minister,
Home Minister, Health Minister, Chemicals and Fertilisers Minister, Information Technology
Minister, Law Minister, HRD Minister and Minister of State for Planning.
FIVE YEAR PLAN
Five-Year Plans (FYPs) are centralized and integrated national economic programs. The first
five year plan was implemented by Joseph Stalin 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. India launched its First FYP in 1951, immediately after
independence under socialist influence of first Prime Minister Jawaharlal Nehru.
The First Five-Year Plan was one of the most important it had 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 system of mixed economy, with a great role for the public
sector (with an emerging welfare state), as well as a growing private sector (represented by some
personalities as those who published the Bombay Plan).
The Five-Year Plans was developed, executed, and monitored by the Planning
Commission (NITI Aayog after 2014). With the Prime Minister as the ex-officio Chairman, the
commission has a nominated Deputy Chairman, who holds the rank of a Cabinet
Minister. (Montek Singh Ahluwalia is the last Deputy Chairman of the Commission (resigned
on 26 May 2014))
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 the Gadgil formula in
1969. Revised versions of the formula have been used since then to determine the allocation of
central assistance for state plans.

2. FIRST FIVE YEAR PLAN
The first five year plan had been made by the planning commission whose objective was to
improve the standard of living of the people by effective use of the country's resources. In India,
the first five year plan's total outlay was estimated to been worth ` 2,069 crore. In the first five
year plan, this amount was allocated to various areas. They are:
 Community and agriculture development
 Energy and irrigation
 Communications and transport
 Industry
 Land rehabilitation
 Social services
The target of GDP growth in the first five year plan of India was 2.1% per year and the actual
growth of GDP that was achieved had been 3.6% per year. This shows the extent to which the
first five year plan in India had been successful.
Three Groups of Problems
• Public administration: the achievement of high levels of integrity, efficiency and
economy. To these may be added the need for structural changes to raise the level of
administration in the less advanced States and to equip the government with machinery to carry
out its economic functions in a manner more adequate to its present responsibilities.
• Administration of development programmes in the district: the improvement of the
machinery of general administration, the establishment of an appropriate agency of development
at the village level, the coordination of development activities on behalf of government, the
State agencies
• Regional coordination and supervision of district development programmes and the place
of social service agencies in the reconstruction of rural life.
Objectives of the 1st five year plan
1. To increase food production.
2. To fully utilise available raw materials,
3. To correct the disequilibrium in the economy which was created by the Second World
War (1939-45) and partition of India.
4. To check inflationary pressure.
5. To build economic overheads such as roads, railways, irrigation, power, etc.
6. To reduce inequalities in income and wealth.
Some important events that took place during the tenure of the 1st five year plan:

• The following Irrigation projects were started during that period:
1. Mettur Dam
2. Hirakud Dam
3. Bhakra Dam.
• The government had taken steps to rehabilitate the landless workers, whose main
occupation was agriculture. These workers were also granted fund for experimenting and
undergoing training in agricultural know how in various cooperative institutions.
• Soil conservation, was also given considerable importance.
• The Indian government also made considerable effort in improving posts and telegraphs,
railway services, road tracks, civil aviation.
• Sufficient fund was also allocated for the industrial sector.
• Measures were taken for the growth of the small scale industries.
Outlay
The total proposed outlay was Rs. 3,870 crore of which Rs. 2,070 crore (later raised to Rs. 2378
crore) was the outlay of the public sector. The actual public sector outlay was Rs. 1960 crore.
About 44.6% of the total public sector outlay was devoted to development work. The investment
of the private sector amounted to Rs. 1800 crore.
Assessment
India’s First Five-Year plan was a brave effort. The success achieved in many fields was
remarkable and, in many cases, the plan targets were exceeded. The target for national income
growth was only an 11% increase, the actual increase was 18% from Rs. 8850 crore the national
income increased to Rs. 10,480 crore by the end of the first plan. Per capita income went up by
11%. Food production rose from 52.2 million tonnes in 1951-52 to 65.8 million tonnes in 1955-
56, whereas the plan target was only 61.6 million tonnes. In cotton, jute, sugarcane and oilseeds,
the achievements were close to the targets.
Industrial production increased during the plan period. Production of mill-made cloth and
locomotives exceeded the plan targets. Many new industries like oil refining, ship-building,
aircraft, railway, were established during the plan. During the plan period, there was an increase
of about 33% in the number of students attending primary schools. During this period, the
railway system was strengthened. 380 miles of new lines were added. 430 miles of lines which
were dismantled during the Second World War was restored. Highways were increased by 636
miles with 30 major bridges and there was improvement of 4000 miles of existing roads. The
first plan period did not cause any significant inflationary pressure on the economy.

3. SECOND FIVE YEAR PLAN (1956 TO 1961)
Second five year plan India (1956-1961) intends to increase and carry forward the development
that had been started by the first five year plan in India.
These five year plans are formulated by the planning commission whose objective is to utilize
the country's resources effectively, so that the standard of living of the people improves.
In India, the second five year plan focused on industry - more specifically on the heavy industry.
The domestic production of industrial goods in the public sector was encouraged by the second
five year plan in India. The total amount for development given allocated under the second five
year plan in India was ` 4,800 crore. This money has been distributed under the second five year
plan in India for the development of various sectors. They are:
 Mining and industry
 Community and agriculture development
 Power and irrigation
 Social services
 Communications and transport
 Miscellaneous
Mahalanobis model
The second five year plan functioned on the basis of Mahalanobis model. The Mahalanobis
model was promoted by the famous Prasanta Chandra Mahalanobis in the year 1953.
According to this model, it is assumed that the economy is closed and has two segments.
1. Segment of consumption goods
2. Segment of capital goods.
Capital goods cannot be moved or are “non-shiftable”. Production is at its peak. Depending on
the availability of capital goods, investments are decided upon. Capital is the scarce factor.
Capital goods production is not influenced by consumer goods production.
Objectives
 A sizeable increase in national income so as to raise the level of living.
 Rapid industrialization of the country with particular emphasis on the development of basic
and key industries.
 A large expansion of employment opportunities by developing labor-intensive projects and
small scale industries.
 Reduction in inequalities of income and distribution.

 To attain the annual growth rate of 5%.
Important events
 As many as five steel plants including the ones in Durgapur, Jamshedpur as well as Bhilai
were set up as per the 2nd five year plan.
 Hydroelectric power plants were formed during the tenure of the 2nd five year plan.
 There was considerable increase in production of coal.
 The North eastern part of the country, witnessed increase in the number of railway tracks.
 Atomic Energy Commission came into being. The Commission was established in the year
1957. During the same period, Tata Institute of Fundamental Research was born. The
institute conducted several programs to search for talented individuals. These individuals
would eventually be absorbed into programs related to nuclear power.
Outlay
This plan was an “Industrial and Transport Plan” in contrast to the first plan which was called
the Agriculture and Irrigation Plan. Originally the second plan proposed a total public sector
outlay of Rs.4800 crores though actual outlay was only Rs.4672 crore. Out of this total,
provision of Rs.560 crore was made for agriculture and community development, Rs.913 crore
for irrigation and power, Rs.890 crore for industry and mining, Rs.1385 crore for transport and
communication, Rs.945 crore for social services and Rs.99 crore for the miscellaneous category.
Assessment
The national income of India increased and the per capita income increased by 8%. The growth
rate of per capita income was low because of higher rate of population. The national income
increased from Rs.11, 670 crore to Rs.14, 140 crore and per capita income rose from Rs.299 to
Rs.326 during the plan period at 1960-61 prices.
The population growth rate was more than 2% per annum during the plan period. Food
production increased by 15% from 67 million tones (MT) to 75 million tonnes (MT). Production
of cotton increased by 31.5%; tea by 9% and sugarcane by 22.5%. There was, however, a fall in
the production of Jute. The Second Plan was being essentially “an industry and transport plan”,
India started producing large quantities of machinery, machine tools for agriculture, industry and
transport, heavy electrical equipment and scientific instrument.
The establishment of three steel mills in the public sector contributed towards solid capital with
an initial capacity of 10 lakh tonnes each at Durgapur (West Bengal), Rourkela (Orissa), and

Bhilai (Madhya Pradesh). The production capacities of Tata Iron and steel Company, Indian
Iron and Steel Company, Mysore Iron and Steel Co. were raised by 7 lakh tonnes, 5 lakh tonnes
and 75 thousand tonnes respectively.
Another achievement in the industrial field was the production of new items, such as tractors,
newsprint, motor cycles, scooters, sulpha and antibiotic drugs, DDT, etc. Some 9.5 million jobs
were created during the plan period.
4. THIRD FIVE YEAR PLAN
In the third plan emphasis was on long-term development.
The third plan report stated that during the five-year period, the Indian economy, “must not only
expand rapidly, but at the same time become self-reliant and self-generating.”
Objectives:
i. An increase in national income of more than 5% annually. The investment pattern laid
down must be capable of sustaining this growth rate in the subsequent years.
ii. An increase in the agricultural produce and to achieve self-sufficiency by increasing
food-grain production.
iii. Expansion of basic industries, the aim being to meet the requirements arising from
increased industrialization within 10 years by means of available resources.
iv. Utilizing the country’s manpower resource to the maximum and ensuring significant
growth in employment.
v. Greater equality of opportunities, more even distribution of economic power and
reducing wealth and income disparities.
Outlay:
The total proposed outlay for the Third Plan was Rs.11, 600 crore, of which Rs.7, 500 crore was
for the public sector. The actual public sector outlay was however, Rs.8, 577 crore.
Assessment:
The third plan was a failure in many ways. The plan target was met only in transport,
communication and social service sectors. Otherwise, there was a fall in agricultural production
from 82 MT to 72 MT. There was a considerable rise in prices of food products and consumer
articles, Industrial production fell below expectations.

The causes of the failure included the Chinese aggression against India and the conflict with
Pakistan, poor monsoons in 1964-65 and 1965-66 and lack of co-ordination between central and
state governments.
PLAN HOLIDAY OR ANNUAL PLANS:
The period between 1966 and 1969 is sometimes called ‘plan holiday’. This is so because the
Indo- Pak conflict (1965), two successive years of severe drought, devaluation of currency and
high levels of inflation delayed the fourth plan. Instead of a fully-fledged five year plan, three
Annual plans were formulated within the draft of the fourth plan.
Objectives:
The main objective of the Annual plans was to remove strains in the economy arising from the
sharp-fall in agricultural production and to curb the inflationary pressure.
Outlay:
Agriculture and irrigation were given the highest priority with 25% of the total investment of Rs.
6,625.4 crore allocated to them, 23% of the total investment was made in the Industrial Sector
with the view to strengthening the industrial base and 18% each in power and transport.
Assessment:
The annual plans helped in uplifting the economy. Agricultural production increased recession
was controlled, strains and stressed on the economy were removed and the pace of development
initiated in the earlier plans were kept up paving the way for starting the Fourth Plan.
5. FOURTH FIVE YEAR PLAN
Owing to India's five year plans, great advancement has been made with regard to India's
national income. Since 1951, the year when the 1st five year plan was presented by the then
Prime Minister Jawaharlal Nehru, India has come a long way. India has taken giant strides and
today it is considered as one of the emerging powers. India is currently following the 11th five
year plan. The tenure of the 11th five year plan is from 2007 to 2012.
The 4th five year plan of India also served as a stepping stone for the economic growth. The
following section will highlight the main events that had taken place under the 4th five year
plan.
Main events of the 4th five year plan (1969 to 1974):

i. India had to reform and restructure its expenditure agenda, following the attack on India
in the year 1962 and for the second time in the year 1965. India had hardly recuperated
when it was struck by drought. India also had a stint of recession. Due to recession,
famine and drought, India did not pay much heed to long term goals. Instead, it
responded to the need of the hour. It started taking measures to overcome the crisis.
ii. Food grains production increased to bring about self-sufficiency in production. With this
attempt, gradually a gap was created between the people of the rural areas and those of
the urban areas.
iii. The need for foreign reserves was felt. This facilitated growth in exports. Import
substitution drew considerable attention. All these activities widened the industrial
platform.
Following the 4th Five Year Plan an alteration in the socio economic structure of the society was
observed.
India fought yet another war with Pakistan and helped in creation of Bangladesh. Needed to
tackle the problem of Bangladeshi refugees after the 1971 war. Nationalization of 14 major
Indian Banks was a key even during this war. This boosted the confidence of the people in
banking system and started greater mobilization of private savings into banking system.
At the end of this plan, India also performed the Smiling Buddha underground nuclear test in
1974. This test was partially in response to the US deployment of the Seventh Fleet in the Bay
of Bengal to warn India against attacking West Pakistan and widening the war. The international
community took several harsh measures against India, which affected the domestic economy.
The Oil Crisis of 1973 skyrocketed the oil and fertilizer prices leading to a very high inflation.
Critical Assessment of Fourth Five Year Plan
The Fourth plan when it was introduced after a gap of three years, was an ambitious plan with
an aim of 5.5% growth as the previous plans had a growth target / achievement of maximum
3.5%. But the Indo-Pakistan war, liberation of Bangladesh and problem of Bangladesh refugees,
successive failures of monsoon, Asian Oil Crisis of 1973 marred the objectives of this plan. The
international economic turmoil due to Oil crisis upset the calculations for Fourth Plan. So only
3.4% growth could be achieved.

6. FIFTH FIVE-YEAR PLAN :- (1974-1978)
Introduction:
The fifth five-year plan laid stress on employment, poverty alleviation and justice. The plan also
focused on self-reliance in agricultural production and defense. In 1978 the newly elected
Morarji- Desai government rejected the plan. The Electricity Supply Act was amended in 1975,
which enabled the central government to enter into power generation and transmission.
The Indian highway system was introduced and many roads were widened to accommodate the
increasing traffic. Tourism also expanded. It was followed from 1974 to 1979. The new
economic programme launched last year served to focus attention on those elements in our Plan
which had the twin objectives of increasing production and promoting social justice. The drive
against economic offences and the general atmosphere of discipline and efficiency which
national emergency helped to foster led to a significant and all-round improvement in economic
performance. The results are now tangible. The production of food grains has touched an all-
time record of over 118 million tones. Almost all parts of the country have contributed to this
increase and all sections of the farming community have benefited. There was striking
improvement in the operation of power plants and in the production of coal, steel and fertilizers.
In some sectors of the economy we were faced with the problem of surpluses rather than
shortages. We have achieved a major break-through on the oil front. The potential of Bombay
High has been firmly established and commercial production has commenced.
These encouraging trends have enabled us to finalize the Fifth Plan. The formulation and
execution of developmental programmes can now take place within a longer time frame. The
Deputy Chairman and his colleagues have worked hard to put together a coherent and feasible
Plan. In essence, the Plan seeks to make up, to the maximum extent possible, for the loss of
momentum suffered in the first year of the Plan.
Objectives of 5th Five Year Plan:
i. Reducing the discrepancy between the economic development at the regional, national
and international level.
ii. Improving the agricultural condition by implementing land reforms measures.
iii. Improving the scope of self-employment through a well-integrated program.
iv. Reducing the rate of unemployment.
v. Encouraging growth of the small scale industries.
vi. Enhancing the import substitution in the spheres including chemicals, paper, minerals
and equipment industries.

vii. Applying policies pertaining to finance and credit in the industrial sector.
viii. Stressed on the importance of labor intensive production technology in India.
Outlays for important groups of industries (Rs. crores)
Industry Outlay Industry Outlay
1. Steel 1675 7. Non-ferrous metals 468
2. Fertilisers 1533 8. Iron ore (including
Kudremukh
Project)
513
3. Coal (including lignite) 1147 9. Paper and
newsprint
203
4. Oil exploration, 1575 10. Cement 102
refining and distribution 11. Textiles 104
5. Petrochemicals 349 12. Ship Building 147
6. Machinery and
engineering industries
365
Backdrop of 5th Five Year Plan
1. Prices in energy and food sector skyrocketed as a result inflation became inevitable.
2. Priority in the 5th five year plan was given to food and energy sectors.
Increase in the supply of food grains and the export of minerals and oil reserve earned quite a
good amount of foreign exchange to the Indian economy.
Rate and Pattern of Growth:
In 1974-75, the first year of the Fifth Plan period. Gross Domestic Product grew only by 0.2 per
cent over the previous year. There was a remarkable improvement in production in 1 975-76
resulting in are estimated growth of above 6 per cent in GDP. During 1976-79 the economy is
expected to grow at an annual compound rate of 5.2 per cent. With this annual growth profile,
the average annual growth in GDP is estimated at 4.37 per cent in the Fifth Plan.
The realisation of the objectives of removal of poverty and self reliance in the Fifth Plan has to
be viewed in the context of the sharp increase in the prices of imported products like fuel,
fertilisers and food. The strategy has therefore to be directed towards accelerated pace of
agricultural production, particularly food grains, exploitation and optimal use of available

energy resources, and production and efficient distribution of critical raw materials and wage
goods.
SECTORAL RATES OF GROWTH:
Sectoral rates of growth consistent with the envisaged rate of growth in the gross domestic
product over the Fifth Plan have been worked out for the terminal year, 1978-79, of the Fifth
Plan through the system of models m and mentioned earlier. Import substitution has been
envisaged in these projections for important sectors to the extent permitted by the production
possibilities and capacity utilisation in the domestic economy.
average annual rate of
growth (%)
composition of GVA at
1974-75 prices
Sector 1978-79 over 1973-74
value of
output
value
added
1973-74 1978-79
(1) (2) (3) (4)
1. agriculture 3.94 3.34 50.78 48.15
2. mining and manufacturing 7.10 6.54 15.78 17.49
(a) mining 12.58 11.44 0.99 1.37
(b) manufacturing 6.92 6.17 14.79 16.11
(i) food products 4.63 3.73 2.13 2.07
(ii) textiles 3.45 3.21 3.50 3.31
(iii) wood and paper products 6.75 4.90 0.58 0.59
(iv) leather and rubber products 5.50 2.47 0.16 0.15
(v) chemical products 10.84 10.46 1.84 2.44
(vi) coal and petroleum products 7.63 7.90 0.23 0.27
(vii) non-metallic mineral products 7.40 7.33 1.58 1.82
(viii) basic metals 14.12 13.40 1.09 1.65
(ix) metal products 5.60 4.64 1.08 1.09
(x) non-electrical engineering products 8.40 7.99 0.61 0.73
(xi) electrjcal engineering products 7.64 6.42 0.60 0.67
(xii) transport equipment 3.73 3.12 0.96 0.90
(xiii) instruments 5.39 4.45 0.03 0.03
(xiv) miscellaneous industries 6.75 4.42 0.38 0.38
3. electricity 10.12 8.15 0.79 0.94

4. construction 5.90 5.18 4.06 4.21
5. transport 4.79 4.70 3.43 3.48
6. services 4.88 4.80 25.16 25.73
7. Total 4.37 700.00 100.00
ROLLING PLAN :- (1978-1980)
The janata party government rejected the fifth five-year plan and introduced a new sixth five-
year plan (1978-1980). This plan was again rejected by the Indian National Congress
government in 1980 and a new sixth plan was made. The rolling plan consisted of three kinds of
plans that were proposed.
Three Kinds of Plans:
i. 1ST Plan - is for the present year which comprises of the annual budget.
ii. 2nd Plan - is a plan for a fixed number of years, which may be 3, 4 or 5 years. Plan
number two is kept on changing as per the requirements of the Indian economy.
iii. 3rd Plan – Perspective plan which is for long terms i.e. for 10, 15 or 20 years. Hence
there is no fixation of dates in the commencement and termination of the plan in the
rolling plans.
Advantage:
i. Flexible
ii. Overcome the rigidity of fixed five year plan by mending targets.
iii. They exercised, projected and allocated according to the changing condition in the
economy.
Dis-advantages:
i. If the targets are revised each year, it becomes difficult to achieve them which are laid
down in the five year period.
ii. It turned to be a complex plan.
iii. Instability of the economy.
iv. No balanced development and progress.

7. SIXTH FIVE-YEAR PLAN
The sixth five year plan marked the beginning of economic liberalization. Price controls were
eliminated and ration shops were closed. This led to an increase in food prices and an increase in
the cost of living.
Main Objectives:
1. Increase productivity.
2. To develop indigenous energy sources and efficient energy usage.
3. To promote improved quality of life of the citizens.
4. Optimum utilization of existing capacity
5. Price control
6. Improved tourism
7. Development in the information technology sector.
8. Family planning was expanded.
9. The target growth rate was 5.2% and the actual growth was 5.4%.
Issues of Sixth Five-year Plan:
1. Industrial development was the emphasis of this plan.
2. Transportation and communication system.
3. New introduction on the economic front.
4. Measures against population explosion
Rates of unemployment by Daily Status (Percentage of labour force)
Sl. No. Category Rural Urban
(0) (1) (2) (3)
1 Male 7.1 9.4
2 Female 9.2 14.6
Achievement:
1. Speedy industrial development.
2. Emphasis on the information technology sector.
3. Self-sufficiency in food.
4. Science and technology also made significant advances.
5. Successful program on improvement of public health.
6. Government investments in the Indian healthcare sector.

Development Performance
India began the process of planned development nearly thirty years ago with the start of the First
Five Year Plan in April, 1951. The central purpose of planning was identified as that of
initiating "a process of development which will raise living standards and open out to the people
new opportunities for a richer and more varied tire" (First Five Year Plan). The manner in which
this purpose has been translated into specific objectives has varied from Plan to P!an. However,
in a broad sense, the basic objectives of planning in India can be grouped under four heads:
growth, modernisation, self-reliance and social justice. In one form or another but possibly with
varying emphasis these objectives reflect the views of all sections of the population and
represent a national consensus on the aims of planning
Targeted and Actual Growth Rates (Percentages)
Sl. No. Plan Target Actuals Growth rate for
(0) (1) (2) (3) (4)
1 First Plan 2.1 3.6 national income
2 Second Plan 4.5 4.0 national income
3 Third Plan 5.6 2.2 national income
4 Fourth Plan 5.7 3.3 net domestic
product
5 Fifth Plan 4.4 5.2 gross domestic
product.
The growth of national income depends on a complex interaction of large number of variables,
not all of which are amenable to government control. However, it is well known that the
quantum of investment and the productivity of this investment, as measured in a simplified
model by the capital output ratio, exercise an important influence on the overall growth rate. An
approximate and first-order explanation for the gap between target and actual levels of income
growth can be found in a comparison of the trends in income and investment. The main
conclusion siiesested by such a comparison is that shortfalls for excesses) in income growth are
larger than what would follow from the shortfalls (or excesses) in investment. The main reason
for this is that realised capital output ratios, particularly during the Third and Fourth Plan
periods, have been much higher than anticipated.

Assessment:
In the eighties, the economy is faced with a formidable task of maintaining and accelerating the
tempo of economic growth in face of a sharp deterioration in the international environment. The
ever rising prices and highly uncertain supply of imported energy can disrupt the
implementation of development plans. Nevertheless, the fact that the economy now enjoys the
advantages of a high savings rate, a developed skill base and a substantial degree of self-reliance
provides a valuable cushion to absorb external shocks. If these advantages are to be turned to
good account, we need to learn certain important lessons from our past experience.
With regard to growth and modernisation the first lesson is that we must mobilise resources to
maintain and increase the tempo of investment and protect the size of the Plan both against
inflation and external disturbances. The second is the paramount need to improve efficiency in
key infrastructural and industrial sectors. The third is that we must reduce the variability of the
growth rate and ensure that weather abnormalities and inflation do not lead to undue cutbacks in
public or private investment. The fourth is the need to extend the agricultural revolution to all
areas and farming systems and in particular to ensure that the incomes of the poor are raised in
the process of agricultural development. The fifth is the need to ensure a vigorous expansion in
exports and a rapid increase in domestic production of oil, steel, fertilisers and vegetable oils so
as to restrain growth of imports in order to maintain viability of our external payments.
Sixth, we must develop effective domestic substitutes for imported energy so that our
dependence on imported oil is contained within reasonable limits. Finally, there is urgent need to
revitalise the family planning programme so as to bring about a substantial decline in me birth
rate through the voluntary adoption of the small family norm. Success on all these points is
essential if the overall rate of growth is to be raised, as it must be, well above the levels reached
in the past. As far as self-reliance is concerned the economy today is in a stronger position than
at the start of the planning era. Dependence on external finance has been substantially reduced
and in many areas of production, a high degree of import substitution achieved. But there are
many unfinished tasks in this area, particularly in the field of energy and technology.
The world economy is in a much more disturbed state since the mid seventies than at any time in
the past three decades and there is an atmosphere of confrontation rather than cooperation in
international economic relations. In this situation the objective of self-reliance needs to be
pursued with continuous vigour. However, self-reliance can no longer take the form of
indiscriminate import substitution. There is a continuous need to replace imports in critical areas
where there are sudden and sharp changes in prices and availability. But, as the complexity of

the economy grows, import requirements will also increase and in order to finance these, export
earnings will have to be stepped up substantially. In the eighties, export promotion is as much a
part of the drive for sell-reliance as efficient import substitution.
With regard to social justice, what we have achieved is far short of what we aimed at. After
three decades of planned development large segments of the population have yet to share in the
benefits of progress or participate in the process ot development. From the Fourth Plan, several
programmes for assisting backward areas and weaker sections have been in force. Yet, judging
by the statistics on asset distribution, employment and consumption the impact seems to be
limited. What is needed is a more effective implementation of asset transfer measures such as
land reforms, more equitable distribution of credit and a coordinated effort that enables the poor
to join the mainstream of economic activity and provides them with an opportunity for
advancement. This will require firstly, an improvement in their productivity and earning power
in their existing activity, secondly, supplementary employment in new activities to use up any
spare labour time and thirdly, training, credit and support systems to assist them in both their
existing and new activities. Growth, modernization, self-reliance and social justice are not
independent objectives. They are linked in that success with respect to any one makes it easier to
achieve the others.
The sustained growth of the past thirty years and the very considerable diversification of our
economic structure that has taken place during this period constitute positive national assets for
launching a more direct attack on poverty and under-development in the Sixth Plan, However,
the enormity of the task should not be underestimated, particularly in view of a sharp
deterioration in the external environment. The nation will have to mobilize all its latent energies
for a more vigorous pursuit of cherished national objectives of accelerated growth, greater social
justice and a modern self-reliant economy. Materials and capital goods and the growth of the
public sector in industry.
8. SEVENTH FIVE-YEAR PLAN (1985-90)
The draft of the seventh plan was approved on Nov, 9, 1985 by the National Development
Council. It was set with a 15-year perspective.
The aim was to create, by the end of the century, the conditions necessary for self-sustaining
growth and to provide basic minimum needs for all.
Objectives:
i. Decentralization of planning and full public participation in development.

ii. Removal of poverty and reduction in income disparities.
iii. The maximum possible generation of productive employment.
iv. Self-sufficiency in food at higher level of consumption.
v. Higher level of social consumption, particularly in education and health and other basic
amenities.
vi. A higher degree of self-reliance through export promotion and import substitution.
vii. Improved capacity utilization and productivity.
viii. Efficiency, modernization and competition in industry.
Outlay:
A total of Rs.1, 80,000 crore was envisaged to the public sector at 1984-85 prices. I he actual
expenditure was Rs.2, 18,730 crore. The highest priority was given to the energy sector.
Agriculture and rural development were also given importance.
There was emphasis on the implementation of lane reforms, timely delivery of key inputs to
farmers and a coordinated approach to irrigation, drainage and land-use management to multiple
cropping; Priority was also given to quick-yielding projects. Replacement and modernization of
existing capital stock were given importance so as to increase productivity.
Assessment:
The seventh plan which came to a close on March 31, 1990 is estimated to have achieved a
growth rate of 6% per annum as against the targeted growth of 5% envisaged in the plan. The
expenditure incurred during the plan period far exceeded the plan expenditure.
The performance of agricultural was once again not satisfactory. Against the food-grain
production target of 178 MT the actual production was only 171 MT in the terminal year of the
plan. The industry however, showed production increases at satisfactory rate.
In fact, the sector registered a robust growth of 9% in 1990-91, a year after the seventh plan
ended. The balance of payment which had already worsened during the Sixth Plan further
deteriorated during the seventh plan with the current account deficit was large as Rs. 41012
crore. In the social sector, programmes like Jawahar Rozgar Yojna were initiated in addition to
the existing programmes to reduce unemployment and consequently poverty.

9. EIGHTH FIVE-YEAR PLAN (1992-97)
The Eighth Five-Year plan was launched immediately after the initiation of structural
adjustment policies and macro stabilisation policies which were necessitated by the worsening
balance of payments position’ and inflation during 1990-91.
Keeping these facts in view, the Eighth plan had to reorient some of the development
programmes. It was realised that the problem of poverty could not be tackled through’ growth
alone which itself was low over a long period of time. Hence, direct intervention through’
poverty alleviation programmes became necessary. This was formulated in the face of these
challenges. It was a plan for managing the transition from a centrally planned economy to a
market-led economy through indicative planning.
Objectives:
i. Generation of adequate employment to achieve near full employment level by the turn of
the century.
ii. Containment of population growth through people’s active co-operation and an effective
scheme of incentives and disincentives.
iii. Universalization of elementary education and complete eradication of illiteracy among
the people in the age group of 15 to 35 years.
iv. Provision of safe drinking water and primary healthcare facilities, including
immunisation accessible to all the villages and the entire population and complete
elimination of scavenging.
v. Growth and diversification of agriculture to achieve self-sufficiency in food and
generation of surplus for exports.
vi. Strengthening the infrastructure (energy, transport, communication, irrigation) in order to
support the growth process on a sustainable basis.
The Eighth plan was to concentrate on these objectives keeping in view the need for (a)
continued reliance on domestic resources for financing investments, (b) increasing the technical
capabilities for the development of science and technology, (c) modernisation and competitive
efficiency so that Indian economy can keep pace with and take advantage of global
developments.
Outlay:
The Eighth Plan proposed a growth rate of 5.6% per annum on an average during the plan
period. The level of national investment proposed was Rs. 7, 98,000 crore and the public sector
outlay, Rs. 4, 34,100 crore. Consistent with the expected resources, the size of the plan of the

States and Union Territories was projected at Rs. 1, 86,235 crore and of the central plan at Rs. 2,
47,865 crore.
Assessment:
The average rate of growth of the economy rose from 6 per cent per annum in the seventh plan
(1985-90) to 6.8 percent in the Eighth Plan (1992-97). Growth averaged a high of 7.5 per cent
per annum in the last three years of the Eighth Plan (1994-95 to 1996-97).
The Agricultural Sector registered an annual growth rate of about 3.9 per cent during the Eighth
plan period. Food grains production which was 168.4 million tonnes in the base year (1991-92)
of the Eighth plan increased to a record level of about 199 million tonnes in the terminal year
(1996-97). Thus 1996-97 emerged as one of the best years in respect of food-grain production
pushing up the overall growth of agricultural production to a record level of 9.3 percent. The
industrial sector had suffered a setback in 1991-92 and the following year saw stagnation in the
industrial production.
However, the industrial recovery started in 1993-94 and in the four year period from 1993-94 to
1996-97, the industrial production increased at the rate of 8.6 per cent per annum.
Due to import liberalisation policy adopted by the government in 1992-93 the current account
deficit exceeded Rs.59, 800 crore during the Eighth Plan which was larger than the projected
figures of Rs.55, 000 crores.
Indian planning has accorded importance to poverty alleviation and development of human
resources. According to Economic Survey, 1998 there is evidence that various employment
generation and antipoverty programmes have started showing positive results.
However, the problems of poverty alleviation and human resource development are large and
complex. Sustained and serious efforts are required to reduce wide disparity among states and
regions, between rural and urban areas and between men and women.
In this context public efforts and resources need to be supplemented by private sector
participation and support from non-governmental organizations (NGOs) for the development of
social sectors.

10. NINTH FIVE YEAR PLAN (1997–2002)
The Ninth Five-Year Plan came after 50 years of Indian Independence. Atal Bihari
Vajpayee was the Prime Minister of India during the Ninth Five-Year Plan. The Ninth Five-
Year Plan tried primarily to use the latent and unexplored economic potential of the country to
promote economic and social growth. It offered strong support to the social spheres of the
country in an effort to achieve the complete elimination of poverty. The satisfactory
implementation of the Eighth Five-Year Plan also ensured the states' ability to proceed on the
path of faster development. The Ninth Five-Year Plan also saw joint efforts from the public and
the private sectors in ensuring economic development of the country. In addition, the Ninth
Five-Year Plan saw contributions towards development from the general public as well as
governmental agencies in both the rural and urban areas of the country. New implementation
measures in the form of Special Action Plans (SAPs) were evolved during the Ninth Five-Year
Plan to fulfil targets within the stipulated time with adequate resources. The SAPs covered the
areas of social infrastructure, agriculture, information technology and Water policy.
Budget
The Ninth Five-Year Plan had a total public sector plan outlay of ₹ 8, 59,200 crores. The Ninth
Five-Year Plan also saw a hike of 48% in terms of plan expenditure and 33% in terms of the
plan outlay in comparison to that of the Eighth Five-Year Plan. In the total outlay, the share of
the centre was approximately 57% while it was 43% for the states and the union territories.
The Ninth Five-Year Plan focused on the relationship between the rapid economic growth and
the quality of life for the people of the country. The prime focus of this plan was to increase
growth in the country with an emphasis on social justice and equity. The Ninth Five-Year Plan
placed considerable importance on combining growth oriented policies with the mission of
achieving the desired objective of improving policies which would work towards the
improvement of the poor in the country. The Ninth Five-Year Plan also aimed at correcting the
historical inequalities which were still prevalent in the society.
Objectives
The main objective of the Ninth Five-Year Plan was to correct historical inequalities and
increase the economic growth in the country. Other aspects which constituted the Ninth Five-
Year Plan were:
 Population control.
 Generating employment by giving priority to agriculture and rural development.
 Reduction of poverty.

 Ensuring proper availability of food and water for the poor.
 Availability of primary health care facilities and other basic necessities.
 Primary education to all children in the country.
 Empowering the socially disadvantaged classes like Scheduled castes, Scheduled tribes
and other backward classes.
 Developing self-reliance in terms of agriculture.
 Acceleration in the growth rate of the economy with the help of stable prices.
Strategies
 Structural transformations and developments in the Indian economy.
 New initiatives and initiation of corrective steps to meet the challenges in the economy
of the country.
 Efficient use of scarce resources to ensure rapid growth.
 Combination of public and private support to increase employment.
 Enhancing high rates of export to achieve self-reliance.
 Providing services like electricity, telecommunication, railways etc.
 Special plans to empower the socially disadvantaged classes of the country.
 Involvement and participation of Panchayati Raj institutions/bodies and Nagar Palikas in
the development process.
Efforts directed to improve functional efficiency of the health care system:
 Creation of a functional, reliable health management information system and training
and deployment of health manpower with requisite professional competence
 Multi professional education to promote team work
 Skill upgradation of all categories of health personnel
 Improving operational efficiency through health services research.
 Increasing awareness of the community through health education.
 Increasing accountability and responsiveness to health needs of the people by increasing
utilisation of the Panchayati Raj institutions in local planning body.
 Making use of available local and community resources so that operational efficiency
and quality of services improve and the services were made more responsive to user's
needs.
Performance
 The Ninth Five-Year Plan achieved a GDP growth rate of 5.4% against a target of 6.5%
 The agriculture industry grew at a rate of 2.1% against the target of 4.2%

 The industrial growth in the country was 4.5% which was higher than that of the target
of 3%
 The service industry had a growth rate of 7.8%.
 An average annual growth rate of 6.7% was reached.
The Ninth Five-Year Plan looks through the past weaknesses in order to frame the new
measures for the overall socio-economic development of the country. However, for a well-
planned economy of any country, there should be a combined participation of the governmental
agencies along with the general population of that nation. A combined effort of public, private,
and all levels of government is essential for ensuring the growth of India's economy. The target
growth was 7.1% and the actual growth was 6.8%.
11. TENTH FIVE YEAR PLAN (2002-2007)
The Tenth Five Year Plan (2002-07) was prepared against a backdrop of high expectations
arising from some aspects of the recent performance. GDP growth in the post reforms period has
improved from an average of about 5.7% in the 1980s to an average of about 6.5% in the Eighth
and Ninth Plan periods, making India one of the ten fastest growing developing countries.
Encouraging progress has also been made in other dimensions. The percentage of the population
in poverty has continued to decline, even if not as much as was targeted. Population growth has
decelerated below 2% for the first time in four decades. Literacy has increased from 52% in
1991 to 65% in 2001 and the improvement is evident in all States. Sectors such as software
services, entertainment and IT enabled services have emerged as new sources of strength
creating confidence about India’s potential to be competitive in the world economy.
Objective:
 The primary objective of the 10th Five Year Plan was to renovate the nation extensively,
making it competent enough with some of the fastest growing economies across the
globe and meet the United Nations Millennium Development Goals (MDG) targets.
 MILLENNIUM DEVELOPMENT GOALS (MDG)- These are the world's time-bound
and quantified targets for addressing extreme poverty in its many dimensions-income
poverty, hunger, disease, lack of adequate shelter, and exclusion-while promoting gender
equality, education, and environmental sustainability.
 The Tenth Plan aimed at an indicative target of 8.0% GDP growth for the period 2002-07
Monitorable Targets for the Tenth Plan and Beyond
• Reduction of poverty ratio by 5 percentage points by 2007 and by 15 percentage points by
2012;

• Providing gainful high-quality employment to the addition to the labour force over the
Tenth Plan period;
• All children in school by 2003; all children to complete 5 years of schooling by 2007;
• Reduction of gender gaps in literacy and wage rates by at least 50% by 2007.
• Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2%;
• Increase in Literacy rate to 75% within the Plan period;
• Reduction of IMR to 45 per 1000 live births by 2007 and to 28 by 2012;
• Reduction of MMR to 2 per 1000 live births by 2007 and to 1 by 2012.
• Increase in forest and tree cover to 25% by 2007 and 33% by 2012.
• All villages to have sustained access to potable drinking water within the Plan period;
• Cleaning of major polluted rivers by 2007 and other notified stretches by 2012.
Feasibility of 8% Growth
The principle reason why 8% growth may be feasible in the Tenth Plan is that the scope for
realizing improvements in efficiency is very large, both in the public sector and in the private
sector. However, this improvement in efficiency can only be realized if policies are adopted
which ensure such improvement. The Tenth Plan must therefore give high priority to identifying
efficiency enhancing policies both at the macro level and also at the sector level. These policies
will often involve a radical break from past practices and even institutional arrangements. In
many cases they will involve policy decisions, which can easily become controversial given the
compulsions of competitive politics. The Tenth Plan can only succeed in achieving 8% growth if
sufficient political will is mobilized and a minimum consensus achieved which will enable

significant progress to be made in critical areas. If this is not possible then growth will be
correspondingly lower.
Macro-economic Implications
The macro-economic implications of the target of 8% growth for the Tenth Plan period with a
particular focus on the implications for domestic and external resource mobilization and the
ICOR. The assessment is based on the assumption that the broad strategy of the Plan will be to
rely on a combination of increased investment and improvement in efficiency based on
unlocking of hidden capacities in the economy, unleashing repressed productive forces and
entrepreneurial energies and upgrading technology in all sectors, all of which will improve
efficiency in all economic activities. This will require acceleration of the process of moving
towards a market economy with rapid dismantling of policy constraints, procedural rigidities and
price distortions. It will also require that the essential institutional structure necessary for the
orderly operation of a market economy be strengthened significantly.
• Table I presents two alternative growth rates for the 10th
Plan, one as a base scenario and the
other as a target scenario. The base scenario is described as one emerging from current
macroeconomic trends supplemented by the fiscal measures which are already in the
pipeline. For the first two years, the growth improvement in the target scenario from the base
scenario is based mainly on the utilization of the existing slack in the economy. The
additional policy efforts needed therefrom, are reflected in the difference in the growth
trajectory of the last three years of the 10th
Plan i.e., between 6.6 per cent and 8.7 per cent.
In the target scenario, the 10th
Plan ends with over 9 per cent growth rate in the terminal
year, and also includes provision for further acceleration in the Eleventh Plan period
TABLE I: Alternative Growth Paths for the Tenth Plan(percentage growth in GDP)
Year 2002-03 2003-04 2004-05 2005-06 2006-07 Xth Last 3 yrs
Plan
Base Run 6.3 6.5 6.5 6.6 6.6 6.5 6.6
Target Run 6.7 7.3 8.1 8.7 9.2 8.0 8.7
 Table II provides the macro-economic parameters of the two alternative scenarios and a
comparison of the two gives the dimensions of efforts to be made to meet the 8 per cent
growth target of the 10th
Plan. Past experience shows that the average gestation lag of
the Indian economy as a whole is about 2.5 years.

TABLE II: Macroeconomic Parameters for the Tenth Plan
Base-Line Target
Average GDP Growth Rate (% p.a.) 6.5 8.0
Gross Investment Rate (% of GDPmp) 27.8 32.6
Implicit ICOR 4.28 4.08
Current Account Deficit 1.5 2.8
Gross Domestic Savings, of which : 26.3 29.8
Public Sector (of which) 2.4 4.6
Government -0.6 1.7
Public Enterprises 3.0 2.9
Private Corporate Sector 4.9 5.8
Household Sector 19.0 19.4
Promotional and Motivational Measures for Adoption of the Small Family Norm:
• Panchayats and Zila Parishads will be rewarded and honored for exemplary performance in
universalizing small family norm, achieving reduction in IM & BR.
• Balilka Samridhi Yojana (Department of Women and Child Development) provide cash
incentive of Rs.500 at the birth of the girl child of BR1 or 2.
• Maternity Benefit Scheme (Department of Rural Development) provide cash incentive of
Rs.500 to mothers who have their first child after 19 years of age, for BR 1 and 2 child
only.
• A Family Welfare linked Health Insurance plan – Rs.5000 (for hospitalization).
• Couples below the poverty line will be rewarded for their active involvement in Family
Planning activities.
• A personal accident insurance cover – sterilized spouse.
• Crèches and child care centers were opened in rural and urban slums.
• Reward for BPL couples for:
o For marriage after the legal age of marriage
o Register the marriage
o First child after the mother reaches the age of 21
o Accept the small family norm
o Adopt a terminal method after the birth of 2nd child.
• The 42nd Constitutional amendment: Lok Sabha and Rajya Sabha seats are frozen on the
basis of 1971 census were valid up to 2001 that is further extended till 2026.

• 79th Amendment Bill of 1992 disqualify a person for being a member of either house of
legislature of a state, if he/she has more than 2 children.
Assessment of 10th Five Year Plan
To this end, the Approach to the Tenth Five Year Plan proposes to shift the focus of planning
from merely resources to the policy, procedural and institutional changes which are considered
essential for every Indian to realise his or her potential. In view of the continued importance of
public action in our development process, increasing the efficiency of public interventions must
also take high priority. These measures collectively are expected to create an economic, political
and social ambience in the country which would enable us to realise the Prime Minister’s vision.
The minimum agenda on which there must be full political agreement, and for which the
approval of the National Development Council (NDC) is sought, is listed below:
1. Reduction of Centrally Sponsored Schemes (CSS) through transfer to states, convergence
and weeding out.
2. Expansion of project-based support to states.
3. Support to states made contingent on agreed programme of reforms.
4. Adoption of “core” plan concepts at both Centre and States.
5. Preference to be given to completion of existing projects than to new projects. Identification
to be done by joint team from States, central ministries and Planning Commission.
6. Plan funds to be permitted for critical repair & maintenance activities as decided by joint
team.
7. Greater decentralisation to PRIs and other people’s organisations.
8. Privatisation/closure of non-strategic PSUs at both Centre and States in a time-bound
manner.
9. Reduction in subsidies in a time-bound manner to provide more resources for public
investment.
10. Selected fiscal targets to be achieved at both Centre and States.
11. Accelerating tax reforms to move towards a full-fledged VAT in a time-bound manner.
12. Legal and procedural changes to facilitate quick transfer of assets, such as repeal of SICA,
introduction and strengthening of bankruptcy and foreclosure laws, etc:
13. Reform of Labour laws.
14. Reconsideration of all policies affecting the small-scale sector.
15. Adoption of a model blue-print for administrative reforms.
16. Reform and strengthening of judicial systems and procedures.

Achievements of 10th Five Year Plan
1. Decline in % of population & poverty
2. Decline in population growth below 2%
3. Increase in literacy level From 52% to 65%
4. Improvement in GDP From 5.7% to 6.7%
5. Rapid development of IT & Software services
12. ELEVENTH FIVE YEAR PLAN (2007-12)
11th Five Year Plan (2007-2012)- heralding future growth :
Remarkable transition to a high growth path during the 10th Five Year Plan period reinforced the
underlying strength of the fundamentals of the economy and eventually resulted in evolving
strategies for 11th Five Year Plan. The Government of India has adopted ‘rapid and inclusive
growth’ as its core theme in the 11th Five Year Plan. Education, in particular, has been accorded
utmost priority during the 11th Five Year Plan period. Growth, recognized as an un-ignorable
engine for expanding incomes and employment necessary for social uplift, remains a pre
requisite for development. With the objective of ensuring that growth is widely spread so that its
benefits are adequately shared by the poor and weaker sections of the society, the Government
has geared up for meeting the challenges during the 11th Five Year Plan duly maneuvering its
resources .
A summary of performance during 11th
Five Year Plan (2007-11):
Impressive record of economic growth on a sustainable basis coupled with a certain positive
upsurge in the living standards of the people prompted the State to enter the Eleventh Five Year
Plan period on an optimistic note. The State has set a growth target of 9.5% for the 11th
Five Year
Plan as against 9% for the Nation.
The overall and comprehensive picture of the growth and plan performance during the first four
years under the 11th Five Year Plan and performance of various Flagship programmes being
implemented in the state are presented below.
Economic growth
The state economy, as measured by growth in the real Gross State Domestic Product (GSDP), on
an average grew at 7.93% during the first four years(2007-08 and 2010-11) of the 11th
Five Year
Plan period – almost catching up with the All India’s GDP growth of 8.16% for the same period.
This impressive growth performance in the State is marked by a phenomenal growth in the
beginning year (2007-08) of the 11th Plan period when the State could register a growth rate of

12.02% and a highly impressive growth rate of 8.89% during the 4th year (2010-11) of the 11th
Plan period. In between, despite the impact of the global slowdown, the State could muster
moderate growth performance (growth in excess of 5%) during the years 2008-09 and 2009-10.
This recovery in the growth pattern during 2010- 11, not only augurs well for the residual year of
the 11th Five Year Plan but for the ensuing 12th Five Year Plan also.
Regarding sectoral growth rates, Agriculture sector unlike during the 10th Plan period, showed
certain signs of recovery and posted an average growth of 7.16% during the Fouryear period
(2007-08 to 2010-11). The Industries sector during this period grew at 6.82%. The Services
sector continuing its predominance, posted a growth rate of 8.84% during the 4-year period. The
foodgrain production in the State after achieving a record level of 204.21 lakh tonnes during the
year 2008-09 has slipped to 156 lakh tonnes during 2009-10 due to adverse seasonal conditions.
However, despite repeated floods, the foodgrain production in the State is estimated to reach a
level of 189.78 lakh tonnes during 2010-11.
Within Agriculture sector, the impact of slowdown coupled with adverse seasonal conditions in
the State during the years 2008- 09 and 2009-10 is evident in all the subsectors except Livestock.
This sub-sector of late has emerged as an important alternate source of income to a large number
of small and marginal farmers, particularly in the drought prone areas of the state. Innovative
activities like Pasukranthi, Jeevakranthi, Sheep Insurance etc., taken up in the interest of farmer’s
welfare, appear to pay dividends. Forestry in the State is consistently growing below par
averaging 2.5% during the 4-year period. However, Fishing sub-sector recording a negative
growth during 2009-10, bounced back to register a growth of 8.39% during 2010-11 managed to
post a healthy average growth of almost 8% during the 11th
Plan period so far.
The growth in the Industry sector appeared to have been hit by recession. After registering
growth rates in excess of 10% continuously since 2005-06 onwards till 2007-08, the growth in
the Industry sector suddenly slipped to 1.51% during 2008-09. However, the Industry sector
witnessed a noticeable growth momentum in the subsequent years. Within the Industry sector,
Construction subsector, maintained a steady and sustained growth consistently. For the four-year
period of the 11th Plan, the Construction sub-sector grew at an overwhelming rate of 10.95%.
Mining & Quarrying subsector, showed volatile trends. However, after witnessing a slump
during 2008-09, this subsector is slowly yet surely turning out to surge ahead. The manufacturing
sub-sector(both registered as well as un-registered), which accounts for nearly 50% of the
Industrial output and more than 10% of the GSDP, has to grow at a higher pace if the Industry
sector were to propel the overall growth momentum and employment.

Services sector continues to garner a lion’s share(over 53%) in the GSDP and the consistently
high growth rates have resulted in a growth in excess of 8.8% during the four-year period.
Among the sub-sectors of the Services sector, Communications, Banking & Insurance, Real
estate & Business services and Transport (other than Railways) & Storage show promise.
Noteworthy increases in the Per Capita Income in the recent past broadly indicate the
improvement in the livelihoods of the people. The Per Capita Income of the state at current prices
has more than doubled in a span of five years- from Rs. 28,539 during 2005-06 to Rs. 60,224 in
2010-11. In fact, the growth in Per Capita Income of the State during this period is more rapid
compared to All-India. Effective implementation of several poverty alleviating and employment
generating programmes of the State as well as of the Centre, aided by a better delivery
mechanism and safety nets in place in the state, appear to have helped the people maintain
relatively better standards.
Performance under Annual Plans:
The Planning Commission had approved a total amount of Rs. 1,44,797 crores as total Annual
Plans outlay for State during the first four years (2007-08 to 2010-11) of the 11th
Five Year Plan.
An amount of Rs.1,07,750 crores has been spent. The expenditure for 2010-11 has been taken
upto the end of (December, 2010) only. On the average, for the four year period, Economic
Services accounted for about 64% of the total outlay, while Social Services accounted for a little
over 35% and General Services less than 1% of the total outlay. Irrigation sector with an outlay
share of 41.3% and Housing with 9.9% share are the major stakeholders in the total outlay. Other
prominent stakeholders include: Rural Development, Urban Development, Industry and
Agriculture and Welfare sectors.
Ensuring Equity and Social Justice:
Consistent with recommendations of the Planning Commission to adhere to allocations for SCs
and STs in proportion to their shares in the State population, on the average, the respective shares
in the total outlays have been maintained under SCSP and TSP in the Annual Plans.
Review of performance under priority initiatives/ programmes:
The innovative and bold initiatives put in place by the state government in the last few years have
not only lifted the standards of living of the people but were also instrumental in ensuring welfare
of the people, especially the poor. Besides the achievements under the priority sectors like
irrigation, agriculture and rural development, the state has committed itself to focus on increasing

public spending on social sector-especially on Housing, Urban development and welfare of SCs,
STs, minorities etc. besides the new initiatives like Rajiv Arogyasri and 104/108 medical
services, Dr. YSR Abhaya Hastam, and others so as to ensure that the benefits of economic
development and technology reach the needy. The following is the outcome of some of the
programmes /initiatives implemented during the 4 years of the 11th Five Year Plan.
Agricultural resurgence:
The state has been implementing a number of farmer-friendly initiatives to encourage farming in
the state. These include supply of free power to Agriculture; insulate farmers from financial
losses and to restore their credit eligibility in the event of crop loss through Agricultural
insurance, disbursement of agricultural credit, debt waiver encouraging farmers to adopt
integrated pest management practices. Agriculture production and productivity have started
attaining new heights in Andhra Pradesh. The State has registered a record Foodgrains
production of 204.21 lakh tonnes during 2008-09 as against the normal of 160.17 lakh tonnes.
However, due to twin effects of drought and floods during 2009-10, the foodgrain production
slumped to 155.96 lakh tonnes. During current year, despite crop losses due to cyclones and
floods, the food grain production is estimated to touch a level of 190 lakh MTs. Agriculture
extension like Rythu Chaitanya Yatralu, Polambadi etc., and Govt. of India’s flagship programs
like Rastriya Krishi Vikas Yojana (RKVY) with 100% Central aid have helped the State to
achieve targeted growth rate in the Agriculture and Allied sectors during XI five year plan.
During the four-year Plan period (2007-08 to 2010-11-Jan.), an amount of Rs. 1023.08 crores has
been spent under RKVY and under the Agriculture & Allied sectors, Rs. 6762.72 crores has been
spent. The massive programme of ‘Jalayagnam’, of creating 98.41 lakh acres of new irrigation
potential and stabilizing 22.26 lakh acres by constructing a total number of 86 irrigation projects-
which include 44 major, 30 medium projects, 4 flood banks and modernizing 8 projects has been
mounted since 2004-05. 12 projects have been completed and water released for 21 more projects
creating partial irrigation potential during 2004-05 to 2009- 10. During the 4 years (2007-08 to
2010-11) of the 11th Five Year Plan, 17.59 lakh acres potential was created. An amount of Rs.
38793.17 crores has been spent under Plan in the Irrigation sector.
Health Initiatives:
Rajiv Arogyasri:
One of objectives of the Eleventh Five Year Plan is to achieve good health for the people,
especially the poor and underprivileged. To provide financial protection to families living below
poverty line for treatment of serious ailments, the Arogyasri Health Care Trust was set up to

implement a Community Health Insurance scheme – Arogyasri. Since inception in April, 2007,
in all 23,582 medical camps were held in network hospitals in rural areas wherein 40.06 lakh
patients have been screened. Of these, 20.35 lakh patients have been treated as outpatients and
9.99 lakh as in-patients. 8.71 lakh patients underwent surgery/therapy at a cost of Rs. 2491.51
crores.
Emergency Transport(108) and Health
Information (104) Services:
Toll Free 108 (EMRI): to enable rural poor easy access to hospital services, free of cost, in times
of emergency. Further, a Caller-free Telephone service(104) for the rural and urban population of
the State to disseminate information, advice and guidance related to any health problem have
been undertaken by the Government. Medical and Health sector has been adequately funded.
During the 4 year period(2007-08 to 2010-11), an amount of Rs. 4142.05 crores has been
provided in the Plan Budgets.
Education:
To make education more meaningful and effective, the State Government has been implementing
several schemes of its own and those sponsored by the Government of India. 133.64 lakh
children have been enrolled in different levels with 53.40% in the Primary stage. Government is
taking all necessary measures to retain children in schools. During 2009-10, the dropout rates
have fallen to 15.80% at Primary level and 53.36% at the Secondary level. An amount of Rs.
3530.21 crores has been spent towards General Education in the State during the 4-year period of
the 11th Plan.
Housing & Pensions under INDIRAMMA:
Andhra Pradesh has been the pioneer in implementing “Housing for All” duly making it a reality
on saturation basis. During 1st four years of the 11th Five Year Plan, (2007-08 to 201011), 32.51
lakh houses have been constructed. In order to accomplish saturation on the housing front,
sizable budgetary allocations have been made during the recent past. In fact, housing accounts for
9.93% (amounting to Rs. 14,377 crores) of the total plan outlay during the 4 year period of the
11th Five Year Plan. Incidentally, Housing sector happens to be the 2nd largest shareholder of Plan
budget, falling only behind the massive Irrigation sector. Largest ever social security net target is
to provide pensions every month to around 71.96 lakh persons comprising old-aged, disabled and
widows across the state. Substantial budgetary allocations provided in the plan budgets and
pensions have been distributed to 65,13,326 persons every month during 2010-11.

Self Help Groups(SHGs)
The concept of Indira Kranthi Patham has been evolved with an objective of enabling all the rural
poor families in 22 rural districts of Andhra Pradesh to improve their livelihoods and quality of
life. All households below the poverty line, starting from the poorest of the poor are the target
group of Indira Kranthi Patham. At present, 9.75 lakh SHGs covering 1.10 crore rural women are
functioning in the state and nearly 53% of them are covered under Bank linkage.
Social Harmony
From the year 2008-09, applications and sanction of scholarships to S.C, S.T and B.C students
were made ONLINE to ensure that scholarships reach the students by the 1st of every month and
also to ensure transparency by keeping all the information in the public domain. Apart from the
above, other educational and economic development programmes are also being implemented to
SC,ST,BC and Minorities. An amount of Rs. 7076.33 crores has been spent towards welfare of
SCs, STs, BCs and Minorities in the State during the 4-year period (2007-08 to 2010-11) of the
11th Plan.
Urban Development
Economic growth, substantially driven by Industries and Services sector is witnessing accelerated
demographic expansion of urban population, not seen during last century. The emerging
challenge needs to be tackled on multiple fronts simultaneously. An amount of Rs. 8322.16
crores has been spent for Urban Development in the State during the 4-year period (2007-08 to
2010- 11) of the 11th Plan.
Infrastructure Projects
Several infrastructure have been taken up by the State. Some of them are : a) Hyderabad
International Airport commenced work during 2005 and itis made operational in March,2008. b)
158 kms length of Outer Ring Road (ORR) around the capital city of Hyderabad is being
implemented to reduce inner-city traffic congestion. – 1st phase of ORR had been opened up for
the common traffic which now effectively connects Cyberabad and Airport. c) Hon’ble Prime
Minister has laid foundation stone on 1.9.2010 for upgradation of Tirupathi Airport as
International Airport. d) The Hyderabad Metro Rail project spanning over 71 Km and estimated
to cost Rs. 12,132 crore is being implemented in PPP mode under Viability Gap Funding(VGF)
scheme. M/s Larsen & Toubro Ltd. is selected as the Concessionaire for the project.

Industry:
In all there are 113 SEZs approved by the Government of India and out of these, 74 are notified
and 27 are operational. Employment has been created for 82,606 persons and it is projected to
generate employment for 8.50 lakh persons. An amount of Rs. 1169.15 crores has been spent
under Industries & Minerals sector during the 4-year period (2007-08 to 2010- 11) of the 11th
Plan.
Information Technology
Information Technology and Communications continue to thrive in our State. I.T. exports worth
Rs.12,521 crores during 2005- 06 have increased to Rs.18,582 crores during 2006-07 and further
to Rs. 33,482 crores during 2009-10. Similar upward surge in IT exports is expected to continue
during 2010-11 also.
Curbing Left Wing Extremism- Integrated Action Plan (IAP):
With the aim of giving a fillip to development schemes in tribal and backward regions, mostly
affected by Naxal violence, GOI have taken up of an Integrated Action Plan (IAP) in 60 selected
districts across theCountry. In Andhra Pradesh State, the IAP programme is implemented in
Khammam and Adilabad districts. It is aimed at quick resolution of problems concerning
healthcare, drinking water, education and roads. During 2010-11 alone, each of the two districts
are given a block grant of Rs. 25 crore and the grant will go up to Rs. 30 crore each in 2011-12.
Developmental works have been taken up in both these LWE districts on a war footing.
Performance of Flagship programmes:
With a view to impart greater momentum to the efforts being made in various sectors, the
Government has launched flagship programmes under sectors of Rural Development, Urban
Development , Health and Sanitation, Agriculture, Women & Child Development, Education etc.
The sector-wise performance of various flagship programmes during the 11th Five Year Plan
period is briefed hereunder. A brief assessment of four flagship programmes, namely, Mahatma
Gandhi National Rural Employment Guarantee Scheme (NREGS), Indira Awas Yojana (IAY),
Pradhan Mantri Gram Sadak Yojana (PMGSY) and National Rural Drinking Water Programme
(NRDWP) etc., sponsored by the Central Government are given below.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS):
The Mahatma Gandhi National Rural Employment Guarantee Act 2005 came into force on 2nd
February 2006. The Act gives legal guarantee of providing atleast 100 days of wage employment

to rural households whose adult members are willing to do unskilled manual labour. Government
of Andhra Pradesh has adopted the Central Act and formulated the Andhra Pradesh Rural
Employment Guarantee Scheme. This scheme was implemented in 1095 mandals across the state
in the 22 districts excluding Hyderabad. Since inception of the scheme, an amount of Rs.14,041
crores had been spent up till December, 2010. This has resulted in the generation of 120.27 crore
person days of employment. This programme has so far covered 1.19 crore households through
issuing job cards in 22 districts of Andhra Pradesh. The implementation of the scheme in Andhra
Pradesh has been improving over time. Implementation of the programme in the State has
received much acclaim by various apex level bodies and monitoring agencies.
Pradhan Mantri Gram Sadak Yojana (PMGSY)
Good infrastructure is necessary not only for economic development of rural areas but also for
overall human development and an acceptable standard of living. Infrastructure like rural roads
can enhance connectivity and offer better marketing possibilities. A 100% Centrally Sponsored
Scheme “Pradhan Mantri Gram Sadak Yojana (PMGSY)” was launched on 25th
Dec. 2000,
primarily aiming to provide all-weather road connectivity to unconnected habitations. Under this
programme, in all, a total amount of Rs. 3321.55 crores has been spent during the 4 years(2010-
11 upto Dec. 2010), covering a total road length of 18,714 km under 5897 completed works.
Indira Awas Yojana (IAY):
Indira Awas Yojana(IAY) is a Centrally Sponsored scheme being implemented in the state with a
sharing pattern of 75:25 between the centre and the state. Under the IAY programme, in all, a
total amount of Rs. 3051.55 crores has been spent during the 4 years(2010-11 upto Dec. 2010.
The amounts include the state contribution besides the Central allocation. Under the IAY
scheme, 10.42 lakh houses have been constructed during the four year period 2007- 08 to 2010-
11 ( till Dec. 2010).
Health, Nutrition and Drinking Water
The National Rural Health Mission (NRHM) launched in the country during April 2005 is an
articulation of the government's commitment to increase public spending on health. The main
focus of this programme is to make all health facilities a fully functional, community owned,
decentralised health delivery system with an emphasis on intersectoral convergence with
sanitation, water, education, nutrition, social and gender equality besides strengthening all health
facilities according to Indian Public Health Standards (IPHS). For implementation of various

items subsumed under NRHM, in all an amount of Rs. 2024.77 crores has been spent during the
period 2007-08 to 2010-11(Dec.2010). The scheme covers several health parameters.
Integrated Child Development Services (ICDS)
The ICDS is a Centrally Sponsored Scheme and is the single largest integrated programme of
child development in the country and in the state. At the block level, the Child Development
Project Officer (CDPO) implements all ICDS services. One or more Anganwadi Centres (AWCs)
are functioning in each village, with one Anganwadi Worker (AWW) and one Anganwadi Helper
(AWH) to manage the AWC.
The main activities of ICDS centres are: 1) Provision of supplementary nutrition for children in
the ages of 6 months to 6 years and pregnant and lactating mothers 2) Education for children
between 3 to 6 years (Early Childhood Education) 3) Immunization of children and women in
collaboration with the health department (ANM in the village) 4) Health check-up for children
and women 5) Referral services for children and women 6) Nutrition and health education to
mothers and adolescent girls. For undertaking various ICDS activities, an amount of Rs. 2717.48
crores has been spent during the years 2007-08 to 2010-11(Till Dec.2011). A total of no. 385
ICDS projects have been implemented with 73,944 AWCs are operational in the state. With
regard to physical achievements under Supplementary Nutrition, in all 62.65 lakh persons have
been benefited under the programme during the year 2010-11.
National Rural Drinking Water Programme (NRDWP)
An amount of Rs. 1757.80 crores was spent during the last four years 2007-08 to 2010- 11(till
Janu.2011) against an allocation of 2079.70 crores under the National Rural Drinking Water
Programme for providing drinking water to 14,616 habitations.
Sarva Shiksha Abhiyan (SSA)
Sarva Siksha Abhiyan (SSA) is a comprehensive and integrated flagship programme of
Government of India, to attain Universal Elementary Education (UEE) in the country in a
mission mode. Launched in partnership with the State Governments and local self governments,
SSA aims to provide useful and relevant education to all the children in the 6 14 age groups by
2010. Under the SSA programme, an amount of Rs. 3134.68 crores was spent during the last four
years 2007-08 to 2010-11(till Dec.2011). Under this scheme, during the 4-year period, 210 new
school buildings have been constructed, 170 schools have been made operational. Further,
several schools have been provided with adequate drinking water facility and toilet facility. Due

to the infrastructure facilities and academic support, there has been improvement in enrolment as
well as reducing drop out ratios.
Mid Day Meal Scheme (MDMs)
Midday Meal scheme (MDM) is being implemented from January 2003 in the state. Under the
scheme, a minimum content of 450 calories and 12 grams of protein content is provided per child
on each working day of the school for classes I to V and 700 calories and 20 grams of protein
content is provided per child on each working day of the school for classes VI to X. Primary
School, Upper Primary and High School Children of Classes I – X studying in
Government/Local bodies and Aided institutions are covered under this scheme. Under the Mid-
Day Meal programme, an Amount of Rs. 597.29 crores, has been spent during 2007-08 to 2010-
11(Till Dec.2011).The amounts include the state contribution besides the Central allocate on.
Under the scheme, 60.33 lakh students during 2007-08, 70.44 lakh students during 2008-09,
70.43 lakh students during 2009-10 and 74.44 lakhs students during 2010-11 have been covered.
Jawaharlal Nehru National Urban Renewable Mission (JNNURM):
The Government of India had launched the Jawaharlal Nehru Urban Renewal Mission
(JNNURM) for a period of 7 years beginning from 2005-06. The Mission, in effect, seeks to
ensure sustainable infrastructure development in select cities of the country, selected on 2001
population criteria. The JNNURM Urban Reforms Mission has two Sub-Missions, viz., Urban
Infrastructure & Governance (UI&G) and Basic Services to the Urban Poor (BSUP). Besides
these two sub-missions, two other components viz., Urban Infrastructure Development Scheme
for Small & Medium Towns (UIDSSMT) and Integrated Housing and Slum Development
Programme(IHSDP) are also associated with the development of the select cities, together
making the Package of JNNURM. So far, an amount of Rs. 1519.91 crores under UI&G scheme,
Rs. 1156.16 crores under UIDSSMT, Rs. 942.49 crores under BSUP and Rs. 353.44 crores under
IHSDP has been spent.
Accelerated Irrigation Benefit Programme
Government of India has initiated assistance under AIBP to complete the ongoing Major and
Medium Irrigation projects taken up with Central Water Commission and Planning Commission
Clearances, since 1996 – 97 to create Irrigation Potential at Optimum cost, based on the
guidelines issued from time to time. While 22 projects(12 major and 10 medium) have been
included under AIBP after 2005- 06, out of which, 3 major and 1 one medium projects have been
completed and the IP created upto Sept.2010 is 2.905 lakh Ha. A total amount of Rs. 8658.66

crores has been spent during the 4 years of the 11th Five Year Plan 2007-08 to 2010-11(till
Dec.2010) under various AIBP projects in the state.
State Horticultural Mission (SHM):
The project envisages development of Horticulture sector focusing on Plantation Infrastructure
Development, Rejuvenation, post-harvest management techniques, For carrying out the said
activities, an amount of Rs. 503.56 crores have been spent since inception of the scheme.
13. TWELFTH FIVE YEAR PLAN (2012-2017)
The Indian economy on the eve of the Twelfth Plan is characterised by strong macro
fundamentals and good performance over the Eleventh Plan period, though clouded by some
slowdown in growth in the current year with continuing concern about inflation and a sudden
increase in uncertainty about the global economy. The objective of the Eleventh Plan was faster
and inclusive growth and the initiatives taken in the Eleventh Plan period have resulted in
substantial progress towards both objectives. Inevitably, there are some weaknesses that need to
be addressed and new challenges that need to be faced. Some of the challenges themselves
emanate from the economy’s transition to a higher and more inclusive growth path, the structural
changes that come with it and the expectations it generates. There are external challenges also
arising from the fact that the global economic environment is much less favourable than it was at
the start of the Eleventh Plan. These challenges call for renewed efforts on multiple fronts,
learning from the experience gained, and keeping in mind global developments.
Experience with Growth
The Eleventh Five Year Plan (2007-08 to 2011-12) had aimed at achieving faster and more
inclusive growth. Rapid GDP growth, targeted at 9.0 per cent per annum, was regarded necessary
for two reasons: first, to generate the income and employment opportunities that were needed for
improving living standards for the bulk of the population; and second, to generate the resources
needed for financing social sector programmes, aimed at reducing poverty and enabling
inclusiveness.
The economy has performed well on the growth front, averaging 8.2 per cent in the first four
years. Growth in 2011-12, the final year of the Eleventh Plan was originally projected at around
9.0 per cent continuing the strong rebound from the crisis, which saw an 8.5 per cent growth in
2010-11. Instead, the economy actually slowed down somewhat in 2011-12 compared to the
previous year – a phenomenon common to all major economies reflecting the fact that 2010 was
a rebound from depressed levels in 2009. Growth in 2011-12 is likely to be around 8.0 per cent.

The economy is therefore, likely to achieve an average GDP growth of around 8.2 per cent over
the Eleventh Plan period, which is lower than the 9.0 per cent targeted originally, but higher than
the 7.8 per cent achieved in the Tenth Plan. This implies a nearly 35 per cent increase in per-
capita GDP during this period. It has also led to a substantial increase in government revenues,
both at the Centre and the States, resulting in a significant step-up of resources for the
programmes aimed at inclusiveness. A healthy increase in aggregate savings and investment
rates, particularly in the private sector, testifies to the strength of our economy as it enters the
Twelfth Plan period.
Inclusiveness
The progress towards inclusiveness is more difficult to assess, because inclusiveness is a
multidimensional concept. Inclusive growth should result in lower incidence of poverty, broad-
based and significant improvement in health outcomes, universal access for children to school,
increased access to higher education and improved standards of education, including skill
development. It should also be reflected in better opportunities for both wage employment and
livelihood, and in improvement in provision of basic amenities like water, electricity, roads,
sanitation and housing. Particular attention needs to be paid to the needs of the SC/ST and OBC
population. Women and children constitute a group which accounts for 70% of the population
and deserves special attention in terms of the reach of relevant schemes in many sectors.
Minorities and other excluded groups also need special programmes to bring them into the
mainstream. To achieve inclusiveness in all these dimensions requires multiple interventions, and
success depends not only on introducing new policies and government programmes, but on
institutional and attitudinal changes brought about, which take time.
Inter-State and Inter-Sectoral Variations
One important feature of the growth experienced in the Eleventh Plan, which is relevant for
inclusiveness, is that high rates of economic growth have been more broadly shared than ever
before across the States. While most States have shown sustained high rates of growth, several of
the economically weaker States have demonstrated an improvement in their growth rates.
Amongst them are Bihar, Orissa, Assam, Rajasthan, Chhattisgarh, Madhya Pradesh, Uttarakhand
and to some extent Uttar Pradesh.1 According to the available data, no State has averaged GSDP
growth of less than 6.0 per cent during the Eleventh Plan period.
While the economically-weaker states are catching up in growth rates, there is growing concern
about the backwardness of individual districts, several of which are located in States that are
otherwise doing well. Many of these districts are also affected by Left-wing Extremism. The

Backward Regions Grant Fund (BRGF) and various other regional initiatives have been specially
designed to address this problem. Progress in Reducing Poverty 1.10 Reducing poverty is a key
element in our inclusive growth strategy and there is some progress in that regard. According to
previous official poverty estimates, the per centage of the population living below the poverty
line had declined by 8.5 per centage points between 1993-04 and 2004-05. Since the
appropriateness of the poverty line was questioned in some quarters, the Government appointed
an Expert Committee under the Chairmanship of the late Prof. Suresh Tendulkar. The Tendulkar
Committee recommended a recalibration of the rural poverty line to make it more comparable
with the urban poverty line, which it found to be appropriate. The application of the Tendulkar
Committee poverty line provides a higher estimate of rural poverty and therefore also of total
poverty, but if the new method is applied to the earlier years, as it should be, it shows that the per
centage of the population in poverty declined from 45 per cent in 1993-94 to 37 per cent in 2004-
05. Thus, poverty declined at roughly 0.8 per centage points per year during the 11 year period
before the Eleventh Plan.
Most of these programmes are Centrally Sponsored Schemes (CSS), which are implemented by
State Government agencies, but are largely funded by the Central Government with a defined
State Government share. The total expenditure on these schemes by the Central Government in
2011-12 (budget estimate) is Rs.188,573 crore, and the total expenditure during the Eleventh
Plan period is almost Rs. 700,000 crore. As one would expect, the effectiveness of their
implementation varies from State to State. Instances of misuse of funds are frequently reported in
studies and press reports, and these are a legitimate source of concern that needs attention.
However, it must be kept in mind that while instances of misuse or leakage present serious
problems, they do not necessarily imply that the overall impact of the programme is not positive.
For example, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which
was started in 2006-07 and extended to cover the whole country during the Eleventh Plan, has
seen several instances of misuse of funds, but it has also notched up a remarkable success.
Employment and Livelihood
For growth to be inclusive it must create adequate livelihood opportunities and add to decent
employment commensurate with the expectations of a growing labour force. As noted above,
India’s young age structure offers a potential demographic dividend for growth, but this potential
will be realised only if the extent and quality of education and skill development among new
entrants to the workforce is greatly enhanced. One of the most remarkable things brought out by
the 66th round National Sample Survey Organization (NSSO) survey on Employment (2009-10)
is that the number of young people in education, and therefore, out of the workforce, has

increased dramatically causing a drop in the labour participation rate.2 The total number of
young working-age (15-24) people who continued in educational institutions doubled from about
30 million in 2004-05 to over 60 million in 2009-10.
The 66th round NSSO Survey of Employment shows that the vast majority of new jobs created
between 2004-05 and 2009-10 was in casual employment, mainly in construction. While such
jobs are often more attractive for rural labour than casual work in agriculture, there is a potential
for an accelerated pace of creation of more durable rural non-farm jobs/livelihood opportunities.
Such job opportunities could come from faster expansion in agro-processing, supply chains and
the increased demand for technical personnel for inputs into various aspects of farming that is
undergoing steady modernisation, and also the maintenance of equipment and other elements of
rural infrastructure. The service sector too has to continue to be a place for creation of decent
jobs/livelihood opportunities, in both rural and urban areas.
Agriculture
A weakness in the economic performance thus far is that growth in the farm sector (agriculture
and allied activities), though better than in the Tenth Plan, remains short of the 4.0 per cent Plan
target. The farm sector has grown at an average rate of around 3.2 per cent during the first four
years of the Eleventh Plan and assuming conditions remain favourable in 2011, the average farm
sector growth in the Eleventh Plan period may be a little over 3.0 per cent. This is a marked
improvement from the average growth of about 2.0 per cent during the Tenth Plan period. Still,
with half of our population dependent on agriculture and allied activities, we need faster farm
sector growth to benefit poor farmers, many of whom are women. The below target growth in
this sector is one of the reasons for increase in food prices over the last two years. Global
development experience, especially from the BRIC countries, reveals that one per centage point
growth in agriculture is at least two to three times more effective in reducing poverty than the
same magnitude of growth emanating from non-agriculture sector.
Since agriculture is a State subject, the Centre will have to work hand in hand with the States to
bring coherence in policies and strategies. Overall investment in agriculture, which had dipped to
less than 10.0 per cent of agri-GDP in 2002-03 has been substantially raised and today stands at
more than 21.0 per cent of agri-GDP. Higher levels of investments in agriculture, both by the
public and private sector can yield much better results if the reforms are undertaken to streamline
not only the incentive structures for the farmers, but also the institutional framework in which
agriculture and related activities take place. Seeds and irrigation are priority areas, which can be
catalysts for raising productivity on the supply side. On the demand side, there is urgent need to

remove most of the controls that have denied a unified and seamless all India market for most
agri-products. Finding the most effective ways of ushering in these changes must be a key
priority area in the Twelfth Plan. Health
The Eleventh Plan had drawn attention to the fact that India’s health outcome indicators continue
to be weaker than they should be, at our level of development. The Plan had therefore expressed
the necessity of allocating additional resources to health and laid down monitorable targets for
parameters relating to Infant Mortality Rate (IMR), Maternal Mortality Rate (MMR),
institutionalised delivery, extent of full immunisation, etc. Data on these parameters, available for
the first three years of the Eleventh Plan, show some improvement. The Infant Mortality Rate
(IMR) fell from 57.0 per cent in 2006 to 50.0 per cent in 2009. The percentage of deliveries in
institutions increased from 54.0 per cent in 2006 to 73 per cent in 2009, while the Maternal
Mortality Rate (MMR) came down by 32 points to 212 (2007-09). These are marked
improvements but their rate of decline is lower than what is needed for achieving the desired
targets. We must accelerate the pace of progress in this area in the Twelfth Plan.
Education
The Eleventh Plan had articulated the need for expanding educational facilities and improving
quality of education, as key instruments for achieving faster and inclusive growth. There has
been notable success in expanding capacity, but the challenge of improved quality still persists.
There has been improvement in the extension of primary education, both in regard to enrolment
and in reduction of dropout rates. The Right to Education (RTE) Act, which became operational
in 2009, has laid a solid foundation on which we need to build. A major achievement is that most
children are now in school. The ASER 2010 report shows that for the age group 6–14 years in all
of rural India, the per centage of children who are not enrolled in school has dropped from 6.6
per cent in 2005 to 3.5 per cent in 2010. The proportion of girls in the age group 11–14 years
who were out of school has also declined from 11.2 per cent in 2005 to 5.9 per cent in 2010.
However, the absolute numbers of children who are out of school remains large. While this needs
to be reduced, it is not unreasonable to state that access is now more or less universalised. As
increasing number of children finish elementary school, there will be need to expand capacity in
secondary and higher secondary schools. Envisaging universalisation of secondary education by
2017 should be a priority in the Twelfth Plan.
Resource constraints will make it difficult to meet the need of expanding higher education
entirely through the public sector. Not all private educational institutions are of good quality and
some are quite inferior. Minimum standards will have to be ensured. But free entry will, in the

Planning Commission of India and its Five Year Plans

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