- Five year plans are centralized economic programs developed and executed by the Planning Commission of India to promote economic development. The first three five year plans are summarized. - The first plan (1951-1956) focused on increasing food production and reducing inequality. It achieved higher than targeted GDP growth of 3.6% but had mixed results. - The second plan (1956-1961) emphasized heavy industry and import substitution. It achieved its GDP target of 4.5% growth but had regional imbalances and ignored agriculture. - The third plan (1961-1966) prioritized agriculture but shifted to defense due to wars with China and Pakistan. It achieved much lower than targeted GDP growth of only 2.7% due to

1. Indian Economics
Policy Regimes

2. 1. What are five year plans?
2. First five year plan
3. Second five year plan
4. Third five year plan
In brief

3. What are Five year plans?
Five year plans are centralized and integrated national economic programs.
The indian economy is premised on the concept of planning.
Five year plans are developed, executed and monitored by the planning commission (1951-2014)
and the NITI Aayog (2014- 2017)

4. First Five Year Plan (1951-56)
Objectives
To increase food production
To fully utilise available raw materials.
To correct the disequilibrium in the economy
which was created by the second world war
and partition of India.
To check inflationary pressure
To build economic overheads and to reduce
inequalities in income and wealth.
Assessment
The target growth rate was 2.1%(GDP) but the actual
growth rate was much higher at 3.6%. Net domestic
product went up by 15%
Increase of 33% in the number of students attending
primary schools. IIT’s were set up and UGC was
commissioned
Many irrigation projects were initiated. Food
production rose from 52.2 million tonnes in 1951-52
to 65.8 million tonnes in 1955-56. Railway system was
also strengthened.
Plan was quasi successful for the govt.

5. 2nd Five Year Plan
(1956-61)
The second plan was particularly in the
development of the public sector and rapid
industrialisation. The focus was mainly on Heavy
Industries,
The plan followed the Mahalanobis model, an
economic development model emphasising on
state of art techniques of operations research
and optimisation,
This plan assumed a closed economy in which
the main trading activity would be centered
around import of capital goods,
Import Substitution Industrialisation policy was
adopted,
Greater emphasis on employment expansion
was laid.

6. Developments during the second plan
Industries
Hydroelectric power plants and
five steel plants at Bhilai,
Durgapur, Rourkela were
established with the help of
Russia, Britain and West
Germany
GDP growth
Target growth rate was 4.5%
and the actual growth rate was
4.27%
Institutes
The TATA institute of
fundamental research and
Atomic Energy Commission
was established as research
institutes.
Other Sectors
Railways was being developed
special focus being on north
east India.
Coal production increased
dramatically

7. Drawbacks :(
Unbalanced regional and economic growth.
Ignorance of agriculture lead to shortage of food grains in turn leading to import of food
grains. Over the five years period, the rise in the general index of wholesale prices was
about 30%.
The condition of the most disadvantaged classes, including almost the entire labour
population remained stagnant and perhaps deteriorated during the decade when socialistic
programme was implemented by the govt.

8. 3rd Five Year Plan
(1961-66)
The third plan had given top priority to
agriculture.
It also laid adequate emphasis on the
development of basic industries vitally
necessary for rapid economic
development
Later the approach of the third plan
shifted from Development to Defence.
(1962 war with China and 1965 war
with Pakistan)

9. More about 3rd FYP
Many primary schools started in rural India. In effort to bring democracy to grass root levels, panchayat
elections were held and states were given more development responsibilities.
State electricity boards and state secondary education boards were formed. Many cement and fertiliser
plant were built. Green revolution was at the initial level.
The targeted growth rate was 5.6% but the actual growth rate remained lower at 2.7% only. A lot of
reasons contributed to such low growth rate. The reasons are discussed below-
War with China and Pakistan diverted attention from development to defence.
High Inflation due to low productivity because of droughts.
Foreign exchange difficulties and number of financial difficulties
Devaluation of rupee.
FYP’s were then discontinued and we had annual plans for 3 years from 1966-69

10. Thank you :)
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