ABOUT THE FIVE YEAR PLAN IN INDIA AND ROLE OF NITI AAYOG

1. FIVE YEAR PLAN IN INDIA
AND
ITS APPROACHES
SUBMITTED BY :
NILOFAR SAIFI
2ND SEM
DYNAMICS OF DEVELOPMENT
M.EKISTICS
FACULTY OF ARCHITECTURE & EKISTICS, JAMIA MILLIA ISLAMIA

2. CONTENT
1. INTRODUCTION
2. PLANNING COMMISSION OF INDIA
3. ABOUT THE PREVIOUS MASTER PLANS
4. 12th Five Year Plan
5. STRATEGIC CHALLENGES
6. 12th Five Year Plan SECTORS
7. NITI AAYOG
8. NITI AAYOG WILL COMPRISE
9. KEY HIGHLIGHTS OF NITI AAYOG
10. MERITS OF NITI AAYOG
11. DEMERITS OF NITI AAYOG
12. CONCLUSION

3. INTRODUCTION
 It should have some general goals as well as specific objectives which are to be achieved within
specific period of time.
 A plan spells out how the resources of a nation should be put to use.
 In India, plans are of five year duration and are called FIVE YEAR PLAN.
WHAT IS PLAN?
PLANNING COMMISSION OF INDIA
 It was Set up on 15 Mar, 1950 with prime minister Jawaharlal Nehru as the chairman.
 The economy of India is based on planning through its five-year plans, developed, executed and
monitored by the Planning Commission
ORGANIZATIONAL SET UP
 Chairman ( Prime Minister)
 Deputy Chairman
 Secretary
 Joint Secretary
 Four Members
Some of the problems necessitated need for an immediate plan:
 Vicious circle of poverty , Low Per Capita Income
 High Rate of Growth of Population., Low Level of Literacy.
 Backward Technology, Foreign Trade.
 Need for Rapid industrialization
WHY TO PLAN ?

4. WHAT IS PLAN AND NON-PLAN EXPENDITURE?
PLAN EXPENDITURE:
ANY EXPENDITURE THAT IS INCURRED OR EARNED ON PROGRAMMERS WHICH ARE
DETAILED UNDER THE CURRENT (FIVE YEAR) PLAN IS CALLED PLAN EXPENDITURE.
 Items of plan expenditure are:
(i) expenditure on electricity generation
(ii) irrigation and rural developments
(iii) construction of roads, bridges, canals and
(iv) science, technology, environment, etc.
NON-PLAN EXPENDITURE:
THIS REFERS TO THE ESTIMATED EXPENDITURE PROVIDED IN THE BUDGET FOR
SPENDING DURING THE YEAR ON ROUTINE FUNCTIONING OF THE GOVERNMENT.
 For this, the government has to spend on police, Judiciary, military, etc. Similarly, the
government has to incur expenditure on normal running of government departments and on
providing economic and social services

5.  Industrial sector (8.4 percent)
 National income increased more than the per capita income due to rapid population growth.
ABOUT THE PREVIOUS MASTER PLANS
(AS PER OUR PREVIOUS TOPICS)
SECOND PLAN (1956-1961)
 The second five-year plan focused on industry, especially heavy industry.
 Domestic production of industrial products was encouraged, particularly in the development of the public sector.
 Coal production was increased.
THIRD PLAN (1961-1966)
 The third plan stressed on agriculture and improvement in the production of wheat, but the brief Sino-Indian War of
1962 exposed weaknesses in the economy and shifted the focus towards the Defense industry.
 Many cement and fertilizer plants were also built.
Reducing rate of Unemployment both in Urban & Rural sectors
Encourage Self-employment
Encourage growth of Small scale industries
FIFTH FIVE YEAR PLAN (1974 TO 1979)
FIRST PLAN (1951-1956)
THREE ANNUAL PLANS (1966-69)
 During these plans a whole new agricultural strategy was implemented. It involving wide-spread distribution of high-
yielding varieties of seeds, extensive use of fertilizers, exploitation of irrigation potential and soil conservation.
 During the Annual Plans, the economy absorbed the shocks generated during the Third Plan.
 It paved the path for the planned growth ahead.

6. ROLLING PLAN (1978–1980)
THE JANATA PARTY GOVERNMENT REJECTED THE FIFTH FIVE-YEAR PLAN (1974-1979) AND
INTRODUCED A NEW SIXTH FIVE-YEAR PLAN (1978–1980). THIS PLAN WAS AGAIN
REJECTED BY THE INDIAN NATIONAL CONGRESS GOVERNMENT IN 1980.
DEFINITION-
A plan which runs for a period of time and is updated regularly for the same period.
I.e. every year the performance of the plan will be assessed and a new plan will be
made next year based upon this assessment.
IN THE ROLLING PLANS THERE ARE THREE KIND OF PLANS.
 First is the plan for the current year which comprises the annual budget.
 Second is a plan for a fixed number of years, which may be 3, 4 or 5 years.
 Third is a perspective plan which is for 10, 15 or 20 years.

7. CONTED………..
SIXTH PLAN (1980-1985)
 Increase national income
 Aimed for rapid Industrial Development
SEVENTH PLAN (1985-1989)
 The plan lay stress on improving the productivity level of industries by up gradation of technology.
 To generate more scope of employment
 The Plan expected a growth in labor force of 39 million people and employment was expected to grow at the rate of 4
percent per year.
EIGHTH PLAN (1992-1997)
 Modernization of Industrial Sector
 employment generation
NINTH PLAN (1997 - 2002)
 Ninth Five Year Plan of India runs had the main aim of attaining objectives like speedy industrialization, human
development, full-scale employment, poverty reduction, and self-reliance on domestic resources.
TENTH FIVE YEAR PLAN (2002 - 2007)
 Providing gainful and high-quality employment at least to the addition to the labor force.
 Reduction in gender gaps in literacy and wage rates by at least 50% by 2007.
ELEVENTH FIVE YEAR PLAN (2007 - 2012)
 Create 70 million new work opportunities and reduce educated unemployment to below 5%.
 Raise real wage rate of unskilled workers by 20 percent.

8. PREVIOUS FIVE YEAR PLANS
Sixth plan 1980-85 5.2 5.54
Seventh plan 1985-90 5.0 6.02
Eight plan 1992-97 5.6 6.68
Ninth Plan 1997-02 6.5 5.55
Tenth plan 2002-07 8.0 7.8
Eleventh plan 2007-12 9.0 7.9
Twelfth plan 2012-17 9.0 -
Five year plan Period Target growth rate of
GDP (%)
Achievement (%)
First plan 1951-56 2.1 3.6
Second plan 1956-61 4.5 4.21
Third plan 1961-66 5.6 2.72
Fourth plan 1969-74 5.7 2.05
Fifth plan 1974-79 4.4 4.83

9. 12th Five Year Plan
(2012-2017)
 THE GOVERNMENT ON 4TH OCTOBER APPROVED THE 12TH FIVE YEAR PLAN
(2012-17) THAT SET AVERAGE GROWTH TARGET AT 8.2 PERCENT.
BASIC OBJECTIVE :
 Faster, More Inclusive, and Sustainable Growth.
 Faster creation of jobs, especially in manufacturing.
 Special plans for disadvantaged/backward regions.
 Growth rate at 8%.
 Reduce Poverty by 10% (29.8 % in year 2009-10).
 Improving the facilities of education, Infrastructure and health.
 The plan aims towards achieving a growth of 4 percent in
agriculture.
 Aimed to attract private investments of up to US$1 trillion in the
infrastructural growth.
 50m employment opportunities.

10. 12th Five Year Plan :
Sectors

11. ECONOMIC GROWTH
 In 12th five year plan, 9% GDP growth is expected. Higher investment and fund
mobilization will induce market development and employment.
 Well regulated and integrated markets would generate enough jobs and live hood
opportunities. Development through efficient capital markets and public private
partnership will further boost the economy and thus may sustain the growth rate of 9 %.
INDUSTRY
Need to grow at 11-12% per year to create 2 million additional jobs per year.Growth in
11th Plan is in 8%.
Tune-up FDI and trade policies to attract quality investment in critical areas.
Better consultation and co-ordination in industrial policy making.
AGRICULTUE
 Target at least 4% growth for agriculture.
 Cereals are on target for 1.5 to 2% growth.
 Land and water are the critical constraints. Technology must focus on land
productivity and water use efficiency.

12. GROWTH RATE TARGETS

13. ENVIRONMENT :
 Expenditure on health by Centre and States to increase from 1.3% of GDP to at
least 2.0%, and perhaps 2.5% of GDP by end of 12th Plan .
 Environmental degradation and ecological imbalance are the two aspects
which result out of development initiatives at local and global levels.
Growth of economy without compromising on environment is a key issue
to be addressed as, sustainable growth is essential now.
EDUCATION AND SKILL DEVELOPMENT :
 Must aim at raising the Gross Enrolment Ratio (GER) in Higher Education to 20
percent by 2017 and 25 percent by 2022.
 Must aim at significant reduction in social, gender and regional gaps in education.
 Research and innovation in higher education must be encouraged with cross-linkages
between institutions and industry.
HEALTH:

14.  Improve bus services/public transport in smaller cities, towns and
districts.
 Even after 65 years of Independence, we have 45% of households do not have
electricity connections.
 The share of private investment in total investment in infrastructure rose from
22% in Tenth Plan to 36.6% in 11th Plan. it will have to increase to 48% in 12th
plan to meet infrastructure investment target.
 More than 40% of household avail no banking facility at all in country.
insurance premia account for less than 1% of GDP, which is just one third of
international average.
 Just two cities, Delhi and Mumbai, which generate 17% of country’s urban
sewage have about 40% of total installed capacity.
ANALYSIS ON INFRASTRUCTURE

15. NITI AAYOG
 “NITI” MEANING "POLICY" IN HINDI.
 "AAYOG” IS THE HINDI WORD FOR "COMMISSION".
 NATIONAL INSTITUTION FOR TRANSFORMING INDIA AAYOG (niti aayog, Policy
Commission) is a Government of India policy think-tank established by Prime
Minister Narendra Modii after his having dissolved the Planning Commission. The
Union Government of India announced formation of NITI Aayog on 1 January 2015.
 NITI will include leaders of India's 29 states and seven union territories.
WHY DID GOVT. INTRODUCED NITI AAYOG ,WHERE WE ALREADY HAVE
PLANNING COMMISSION OF INDIA?
 The stated aim for NITI Aayog's creation is to foster involvement and participation in the economic
policy-making process by the State Governments of India. It has adopted a "bottom-up" approach in
planning which is a remarkable contrast to the Planning Commission's tradition of "top-down"
decision-making.
 One of the important mandates of NITI Aayog is to bring cooperative competitive federalism and to
improve centre state relation .
 NITI Aayog will provide opportunities, that the previous Planning Commission structure lacked, to
represent the economic interests of the State Governments and Union Territories of India.

17. POSITION PLANNING COMMISSION NITI AAYOG
INTRODUCED •1950, March 15th •died in 2014, August after Modi became
PM.
2015, January 1st
CHAIRMAN Prime minister same
VICE CHAIRMA Last Dy.Chairman was Montek Singh Ahluwalia (Cabinet
minister rank).
Free market economist Arvind Panagriya. He was the Chief
economist of Asian Development bank, and the the brain
behind Rajasthan’s land-labour reform
CEO •Member-Secretary (IAS) •Sindhushree Khullar (IAS) •A secretary level bureaucrat with fixed tenure. •Same Ms.
Sindhushree Khullar is the first CEO.
EX-OFFICIO MEMBERS •Finance Minister
•Planning minister
PM can nominate four-Union ministers. Modi has nominated
following:
1.Home 2.Finance 3.Railway 4.Agriculture
FULL TIME MEMBERS 4-7 full time members, who enjoy “Minister of State” rank. •Bibek Debroy (Free market economist)
•Dr. V.K. Saraswat (technocrat, missile scientist and Ex-DRDO
chief.)
SPECIAL INVITEES Union ministers for
1.Transport
2.HRD
3.Social Justice +PM can invite other experts as and when
needed.
PART-TIME MEMBERS Tech experts from research institutes. Currently none
declared. Rotational posts.
GOVERNING COUNCIL
REGIONAL COUNCILS
•Chairman: Prime minister •Chief ministers of all states
•Lieutenant governors of all Union territories.
Will have CMs of states that fall in the region. They’ll be
dealing with specific issue concerning a group of states for
example irrigation, naxal-problem, infrastructure etc.
ORGANIZATIONAL SET UP: Planning Commission vs Niti aayog

18. FUNCTIONAL COMPARISON: Planning Commission vs Niti aayog

19. MERITS OF NITI AAYOG MERITS OF NITI AAYOG
 Improving relationship between state and center
government
 Planning commission used to monitor of human
development in the States, Sub-plans for women, SC and
ST. Niti Aayog doesn’t say how they’ll do it.
 Paying special attention to the backward areas and
villages.
 It has been suggested that allocation of Plan resources
could be tasked to the Finance Commission, which is
required to make recommendations regarding the sharing
of Union taxes, principles governing grants-in-aid to
states and transfer of resources to local bodies, and any
other issue that has a bearing on Centre-state financial
relations.
 This will be great help for involving PPP (public private
partnership) projects in infrastructure which are lacking
behind.
 Niti Aayog should have been created through a
legal/Constitutional amendment. There should be a
perspective plan spanning for 15 to 20 years.
 Its focus on infrastructure development with ministries
and implementation delays.
 Niti Aayog will conflict with Cabinet Secretariat (for
inter-ministerial coordination) and constitutional body
Inter State Council (for coordination with states).
 Though it found resources to speed up social sector
development (education) and for social security by
expanding centrally-sponsored schemes, the next round
of results are less likely to come from more of the same
approach.
 At present we’ve 60+ centrally sponsored schemes. Modi
aims to combine them into just 10 schemes. Thus, poor
and marginalized communities will suffer.

20. CONCLUSION
 The economy will enter the 12th plan period in an environment of great
promise but also one that presents major challenges. India has done well
on the growth front, but not so well on inclusion. Much of what needs to be
done to accelerate GDP growth to 9% so will be done by the private sector,
but the central and state governments have a crucial role to play in
providing a policy environment that is seen as investor friendly and is
supportive of inclusive growth
 . Finally, the efficiency in implementation of projects on the ground needs
to be greatly improved.
 The NITI Aayog took place of planning commission on the principals
of cooperative federalism, giving states a more free hand in planning
and implementation of schemes, but the contribution and role of five
year plan in development of India as a nation and as an economy will
always be revered.