Question

Examine the role of five-year plans in economic development of India.

Hint:

Structure your answer chronologically and thematically. Mention the initial focus on industry (Second Plan), the later shift to agriculture (Green Revolution), and the overarching goals of self-reliance and infrastructure building. This shows a comprehensive understanding of the planning era.

Answer 1

Step 1: Understanding the Concept:
After independence in 1947, India adopted a model of centralized economic planning to guide its development. The Planning Commission was established in 1950, and it formulated a series of Five-Year Plans (FYPs) to allocate resources, set targets, and steer the nation's economic growth until the system was replaced by the NITI Aayog in 2015.
Step 2: Detailed Examination of the Role:
The FYPs played a crucial role in several key areas:
1. Building an Industrial Foundation: The Second FYP (1956-61), based on the Mahalanobis model, laid special emphasis on the development of heavy and capital goods industries. Large public sector undertakings (PSUs) were set up in crucial sectors like steel, mining, machine tools, and power. This created a diversified industrial base that was essential for long-term growth.
2. Development of Critical Infrastructure: The plans directed massive public investment into creating essential infrastructure. This included the construction of large dams for irrigation and hydroelectric power (e.g., Bhakra-Nangal), the expansion of the railway and road networks, and the establishment of scientific and technical educational institutions like the IITs.
3. Achieving Self-Sufficiency in Agriculture: While early plans focused on industry, the food crises of the 1960s shifted the focus. The plans during this period supported the Green Revolution by providing funding for high-yield variety (HYV) seeds, fertilizers, and irrigation. This transformed India from a food-deficient nation to one that was self-sufficient in food grains.
4. Promoting Self-Reliance and Social Justice: A core objective of the plans was to achieve economic self-reliance by reducing dependence on foreign aid and imports (import substitution). The plans also incorporated social objectives, with various schemes aimed at poverty alleviation, employment generation, and reducing regional disparities, though success on these fronts was often limited.
Limitations:
Despite these successes, the planning era was criticized for creating an inefficient "License Raj," stifling private enterprise, and leading to a relatively slow rate of economic growth compared to other Asian economies.
Step 3: Final Answer:
The Five-Year Plans were instrumental in shaping the first four decades of India's economic journey. They were successful in building a strong industrial and agricultural base and creating critical infrastructure, which laid the groundwork for the faster growth seen after the economic reforms of 1991.