Different Economic Planning Models in India

Different Economic Planning Models in India Since 1950

Economic planning is the process of setting long-term goals and objectives for the development of a country’s economy. Economic planning in India started after independence in 1950, when it was deemed necessary for economic growth and development of the nation. Since then, India has adopted various economic planning models to achieve its economic and social objectives. In this blog post, we will discuss some of the major economic planning models that have been used in India since 1950.

Different Economic Planning Models in India Since 1950
Indian Economy Models


First Five Year Plan Model (1951-56)

The First Five Year Plan was based on the Harrod-Domar model, which assumes a closed economy with constant prices and a fixed capital-output ratio. The main objective of the plan was to achieve food self-sufficiency, rehabilitate refugees, and control inflation. The plan achieved its targets and objectives more or less successfully, and also established five Indian Institutes of Technology (IITs) as major technical institutions. 

Second Five Year Plan Model (1956-61)

The Second Five Year Plan was designed by Prof. P.C. Mahalanobis, who proposed a two-sector model and a four-sector model of the economy. The two-sector model divided the economy into consumer goods sector and investment goods sector, and aimed at increasing investment in heavy industries to create a surplus for further investment. The four-sector model divided the economy into agriculture, consumer goods industries, capital goods industries, and services, and aimed at matching the demand and supply of different sectors through feedback mechanisms. The main objective of the plan was to achieve rapid industrialization and self-reliance.

 The plan also initiated the establishment of public sector enterprises, such as Hindustan Machine Tools (HMT), Oil and Natural Gas Corporation (ONGC), and Indian Oil Corporation (IOC). The plan faced some challenges due to the shortage of foreign exchange, the Suez Canal crisis, and the Indo-China war

Third Five Year Plan Model (1961-66)

The Third Five Year Plan was based on the Feldman-Mahalanobis model, which extended the two-sector model to include the intermediate goods sector. The main objective of the plan was to achieve balanced growth and self-sustaining development. The plan also emphasized on the development of agriculture, education, health, and social welfare. The plan was disrupted by the Indo-Pakistan war, the droughts, and the devaluation of the rupee, and could not achieve its targets

Fourth Five Year Plan Model (1969-74)

The Fourth Five Year Plan was based on the Ashok Rudra model, which modified the Feldman-Mahalanobis model to include the foreign trade sector. The main objective of the plan was to achieve growth with stability and social justice. The plan also focused on the development of small-scale and cottage industries, poverty alleviation, and population control. The plan faced difficulties due to the oil crisis, the inflation, and the political instability, and could not achieve its targets

Fifth Five Year Plan Model (1974-79)

The Fifth Five Year Plan was based on the D.P. Dhar model, which incorporated the Keynesian macroeconomic framework into the Feldman-Mahalanobis model. The main objective of the plan was to achieve growth with social justice and self-reliance. The plan also introduced the concept of minimum needs programme, which aimed at providing basic amenities, such as food, clothing, housing, education, and health, to the poor. The plan was terminated in 1978 by the Janata government, which launched a new plan for the remaining period. 

Sixth Five Year Plan Model (1980-85)

The Sixth Five Year Plan was based on the L.K. Jha model, which integrated the micro and macro aspects of the economy. The main objective of the plan was to achieve growth with modernization and social justice. The plan also emphasized on the development of rural infrastructure, irrigation, energy, and technology. The plan was successful in achieving its targets and objectives, and also witnessed the launch of the Integrated Rural Development Programme (IRDP) and the National Rural Employment Programme (NREP).

Seventh Five Year Plan Model (1985-90)

The Seventh Five Year Plan was based on the C.H. Hanumantha Rao model, which focused on the human development aspects of the economy. The main objective of the plan was to achieve growth with equity and social justice. The plan also stressed on the development of human resources, such as education, health, nutrition, and family welfare. The plan was successful in achieving its targets and objectives, and also launched the Jawahar Rozgar Yojana (JRY) and the Indira Awaas Yojana (IAY).

Eighth Five Year Plan Model (1992-97)

The Eighth Five Year Plan was based on the Raja Chelliah model, which advocated the structural adjustment and stabilization policies of the economy. The main objective of the plan was to achieve growth with liberalization and globalization. The plan also initiated the economic reforms, such as deregulation, privatization, and foreign direct investment. The plan was successful in achieving its targets and objectives, and also witnessed the launch of the Mahila Samridhi Yojana (MSY) and the Swarnjayanti Gram Swarozgar Yojana (SGSY)

Ninth Five Year Plan Model (1997-2002)

The Ninth Five Year Plan was based on the P.R. Brahmananda model, which emphasized on the demand management and fiscal consolidation policies of the economy. The main objective of the plan was to achieve growth with social justice and empowerment. The plan also focused on the development of agriculture, infrastructure, and social sectors. The plan could not achieve its targets and objectives, and also faced the challenges of the Asian financial crisis, the Kargil war, and the Gujarat earthquake

Tenth Five Year Plan Model (2002-07)

The Tenth Five Year Plan was based on the Vijay Kelkar model, which suggested the second generation reforms and the medium-term fiscal framework of the economy. The main objective of the plan was to achieve growth with quality and efficiency. The plan also aimed at achieving the Millennium Development Goals (MDGs), such as poverty reduction, universal primary education, gender equality, and environmental sustainability. The plan could not achieve its targets and objectives, and also faced the challenges of the global recession, the SARS outbreak, and the tsunami. 

Eleventh Five Year Plan Model (2007-12)

The Eleventh Five Year Plan was based on the C. Rangarajan model, which proposed the inclusive growth and development strategy of the economy. The main objective of the plan was to achieve growth with equity and social inclusion. The plan also focused on the development of rural areas, urban areas, and backward regions. The plan could not achieve its targets and objectives, and also faced the challenges of the global financial crisis, the inflation, and the drought. 

Twelfth Five Year Plan Model (2012-17)

The Twelfth Five Year Plan was based on the Montek Singh Ahluwalia model, which advocated the faster, sustainable, and more inclusive growth of the economy. The main objective of the plan was to achieve growth with environmental sustainability and social harmony. The plan also stressed on the development of infrastructure, energy, education, health, and governance. The plan could not achieve its targets and objectives, and also faced the challenges of the slowdown in growth, the fiscal deficit, and the current account deficit. 

In Conclusion

Economic planning in India has evolved over time, reflecting the changing needs and aspirations of the country. Economic planning in India has also been influenced by various economic theories and models, such as the Harrod-Domar model, the Mahalanobis model, the Feldman-Mahalanobis model, the Ashok Rudra model, the D.P. Dhar model, the L.K. Jha model, the C.H. Hanumantha Rao model, the Raja Chelliah model, the P.R. Brahmananda model, the Vijay Kelkar model, the C. Rangarajan model, and the Montek Singh Ahluwalia model. Economic planning in India has also faced various challenges and constraints, such as the shortage of resources, the external shocks, the political instability, the social unrest, and the environmental degradation. Economic planning in India has also achieved various achievements and outcomes, such as the growth of output, the development of infrastructure, the reduction of poverty, the improvement of human development, and the integration with the global economy. Economic planning in India is still relevant and important, as it provides a vision and a direction for the future of the country. Economic planning in India also requires constant review and evaluation, as it has to adapt to the changing circumstances and realities of the economy. Economic planning in India also requires the participation and cooperation of all the stakeholders, such as the government, the private sector, the civil society, and the people, as it affects the lives and livelihoods of everyone. Economic planning in India is a dynamic and continuous process, which aims at achieving the economic and social goals of the nation.



Athar Maqsood

Woking as an Author and Writer since 2020.
Education :
Bachelor in Political Science and Economics. Diploma in Computer Science, Tally, and Typing.

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