Economic Planning- An Appraisal


Today, India has completed six decades of economic planning. Indian economy has undergone various transitions since the starting of its 1st five year plan in 1950-51. Although, it attained a high degree of maturity, yet these five year plans failed to accomplish the expectations of general public.

The economic planning of the country since Independence has achieved a lot but at the same time there have many areas of failures.

The achievements of economic planning in India are:

Increase in national income

Change in composition of income

Substantial growth in agriculture and industry

Changes in agriculture sector

Changes in industrial scenario

Increase in savings and investment

Large expansion of infrastructure

Development in science and technology

Progress in education and health facilities and


The failures of planning in India are:

Inadequate growth rate

Failure to eradicate poverty

Failure to remove unemployment

Large inequalities

Inefficient resource use

Slow growth of infrastructure

Inflationary pressures and

High magnitude of deficit financing

There are various factors that inhibited successful implementation of the plans, they are:

Unrealistic plans

Overambitious plans

Faulty implementation

Lack of coordination

Inadequate infrastructure

Bureaucratic approach

Financial constraints

Natural constraints and

Rapid population growth

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  • Q1

    Name the government initiative which transformed Indian agriculture.


    The Green Revolution transformed Indian agriculture and led to food self-sufficiency of India.

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  • Q2

    In which year were banks nationalized?


    Banks were nationalized in 1969.

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  • Q3

    State the factors responsible for limited success of economic planning in India.


    The factors responsible for the limited success of economic planning in India are:
    1. Unrealistic plans: The planners set objectives that were out of reach or impossible. They were unable to prioritise their goals. Also contradictory policies were used to achieve the goals.
    2. Overambitious plans: Planners had been overambitious while planning the policies. They drew huge plans without taking into considerations the availability of financial resources and the adequate logistics.
    3. Faulty implementation of the plans: Various projects undertaken during the plans were not worked out in detail. There was lack of adequate and efficient implementation machinery.

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  • Q4

    Mention any three achievements of Economic planning in India.


    Three achievements of Economic Planning in India are:

    1. Increase in National Income: Over the period of six decades (1950-51 to 2010-11), the real national income has increased at an average rate of around 4.7% per annum as compared to 0.75 during 1901-51.

    2. Substantial growth in agriculture and industry: Agricultural output had been growing at the rate of around 2.5%per annum during the planning period, whereas, the industrial output has been growing at a rate of more than 6% per annum. It further increased to 8.5% during the year 2004-05 to 2010-11.

    3. Progress in Education and Health facilities: The number of elementary schools increased by five times from 2.23 lakh in 1950-51 to 11.9 lakh in 2009-10. The literacy ratio was increased from 18%in 1950-51 to 67.6% in 2008. The number of doctors was increased by over 13 times from 1950-51 to 2010. The number of hospitals and dispensaries was increased by more than 6 times and the number of hospitals bed has increased by more than 8% from1950-51 to 2010-2011.

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  • Q5

    State any five the major failures of economic planning in India.


    The major failures of economic planning in India are:
    1. Inadequate growth rate: In the five year plans, growth rate of production was very slow in every sector. The growth rate of national income fluctuated till the ninth plan. Capital intensive industries were given preference over agriculture.
    2. Failure to eradicate poverty: Despite the best efforts and planning, huge proportion of the population is still living under the miserable conditions. As per an estimate done in 2004-05, 269 million people of India were below poverty line.
    3. Failure to remove Unemployment: During the periods of five year plans the rate of employment had been rising but the rate of increase in labour supply had been even more. This resulted in increasing the magnitude of unemployment from 8 million in 1983-84 to 10.8 million in 2013-14.
    4. Large inequalities: According to the human development report 2014, the richest 10% of Indian population earns 29% of the total national income and the poorest 10% got only 3.7% of the total national income.
    5. Slow growth rate of infrastructure: Growth of infrastructure had been very distressing. Inadequacies of infrastructure like power supply, transport facilities, health care, educational facilities, etc have created hurdles in the process of economic growth.

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