7/31/2019 Study Material 3rd Year Economics(PLANNING STRATEGY)

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Planning strategy

India after achieving independence adopted the strategy of economic planning for itsvarious economic goals including growth & development. So far 10 five-year plans & afew annual plans have already been completed. This is the 11 th five-year in which thecountry has entered.

At the time of independence, Indian economy was facing the problems of acute poverty,unemployment & the quality of life was extremely low. To solve these problems 5-year planning was adopted. During all these years of planning, the country has achievedsome kind of growth but the main problems of poverty, inequality & unemployment havenot eradicated. Therefore, what is important is that the steps have to be taken which

can ensure rapid growth of the economy & also the removal of poverty, inequality &unemployment.

OBJECTIVES OF ECONOMIC PLANNING:

1. Rapid Economic Growth: The basic aim of economic planning in India hasbeen to bring about rapid economic growth through development of agriculture,

industry, power, transport & communication and all other sectors of the economy.The basic measure of economic growth of a country is the continuous expansionyear after year of real natural income & real per capita income. Economic growthshould also include improvement in quality of life consisting of life expectancy,infant mortality, literacy etc. During the last 60 years the growth rate has beenbetween 5 & 7% but the increase of income was not accompanied by removal of poverty.

2. Increase in Employment: Unemployment is a very important cause of poverty inIndia. Hence an important objective of planning has been removal of unemployment. This may be admitted that the government has not succeeded increating sufficient number of jobs, so that unemployment to some extent isminimized.

7/31/2019 Study Material 3rd Year Economics(PLANNING STRATEGY)

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3. Reduction of Inequality of Income: A very small group of persons in India arebetter off. There are rich landlords, merchants, industrialists, bankers & topofficials. The vast majority of people are however very poor because their incomeis low. Even though income inequalities have always been mentioned as one of the objectives in all the plans but 5 year plans never had a clear, positive strategyto redistribute wealth & income.

4. Establishment of Socialist Society: Finally, the Indian planners visualized theestablishment of a socialist society in which everyone would have equalopportunities in the matter of education, occupation etc. Wealth would bedistributed equally & there would be no concentration of economic power in thehands of a few individuals & families. But the ground reality is that not much hasbeen done in this regard.