Economic Planning in India
NCERT Class 11 • Indian Economic Development • Chapter "Indian Economy 1950-1990"
Economic Planning in India
Economic planning means using the resources of a country according to a set of priorities decided in advance for a fixed period. India adopted planning after independence because the market alone was not expected to build heavy industry, spread growth across regions or reduce poverty fast enough.
Objectives and Strategy
- The long term goals of Indian planning were growth, modernisation, self reliance and equity.
- Growth means a rise in the country's capacity to produce goods and services.
- Modernisation means adopting new technology and also changing social outlook, such as accepting women's participation in work.
- Self reliance means avoiding excessive dependence on imports and foreign aid.
- Equity means that the benefits of growth must reach every section, so basic needs are met for all.
- The second plan followed the Mahalanobis strategy, giving priority to heavy and basic industry in the public sector.
- Agriculture was addressed through land reform and later the Green Revolution.
Achievements and Shortcomings
- Planning built a large industrial base, an infrastructure network, scientific institutions and public sector enterprises.
- Food output rose enough to end dependence on food imports after the Green Revolution.
- Savings and investment rates rose, and life expectancy and literacy improved steadily.
- Shortcomings included slow growth for several decades, heavy licensing controls and inefficiency in some public enterprises.
- Poverty and unemployment remained high, and inequality between regions persisted.
- After 1991 the strategy shifted towards liberalisation, and the planning body was later replaced by a think tank that sets directions rather than fixed targets.
- Plans were drawn for five year periods, with annual plans in between whenever a longer plan could not be finalised.
- Each plan set physical targets for output and financial targets for investment across sectors.
- The main lesson of the planning era is that state capacity and market incentives both matter; neither works alone.
| Objective | Meaning |
|---|---|
| Growth | Rise in productive capacity |
| Modernisation | New technology and social change |
| Self reliance | Less dependence on imports and aid |
| Equity | Benefits reaching every section |
Self reliance — developing domestic capacity so that a country does not depend excessively on imports and foreign aid.
Exam me kaise aata hai
- The four goals of Indian planning are — growth, modernisation, self reliance, equity
- The second plan followed which strategy — Mahalanobis strategy
- Priority in the second plan went to — heavy and basic industry
- Reform towards liberalisation began in — 1991
UPSC/State PSC ke liye
- The heavy industry strategy created capacity but few jobs, because heavy industry is capital intensive, which is one reason employment lagged behind output.
- Planning shifted from target setting to indicative direction once the private sector became the main investor.
Yahan confuse hote hain
✗ Planning aimed only at growth | It aimed at growth, modernisation, self reliance and equity together | ✓
✗ The second plan prioritised agriculture | It prioritised heavy and basic industry | ✓
✗ Self reliance means no foreign trade at all | It means avoiding excessive dependence, not ending trade | ✓
Ek nazar me
- Planning set national priorities for fixed periods.
- Four goals: growth, modernisation, self reliance and equity.
- Second plan used the Mahalanobis heavy industry strategy.
- Achievements in industry and food; shortcomings in jobs and poverty.
Ab practice karein
National income aur planning se numerical aur factual dono tarah ke questions bante hain. ExamAtlas ke mock test se abhi jaanchein.