Chronology of India’s Five-Year Plans: from centrally planned economy to market liberalization

Five-Year Plans: Chronology of India’s Economy and History Essay 

 For the history students, especially the undergraduate and postgraduate ones, the Five-Year Plans are the integral course element to understand the contemporary economy, development, and the policies in India. After India’s independence, to establish the country as a developed one, the Planning Commission was formed under the influence of the USSR. Below are the key points of the Five-Year Plans history. 

 1. Background and emergence • The Planning Commission was formed in India ‘on 15th March 1950 by a resolution of the Union Cabinet’ with the Prime Minister of India as its ex-officio Chairman (Jawaharlal Nehru was the first Chairman). • The objective was to ‘secure rapid economic growth, social justice, and full employment by conscious policy, by effective mobilization and allocation of resources

’ 2. Five-Year plans and their historical significance 

First Five-Year Plan (1951 – 1956)
• The Harrod-Domar model was followed. • The emphasis was on developing agriculture, irrigation, and flood control, as there was a shortage of food grains after the partition. • The first multi-purpose river valley projects such as Bhakra Nangal and Hirakud were launched. 

Second Five-Year Plan (1956 – 1961) • The Mahalanobis model was followed. • The focus was on heavy industries. • Known also as India’s Industrial Plan; during this time, Bhilai, Rourkela, and Durgapur steel plants were constructed.

Third Five-Year Plan (1961 – 1966) • Aimed at making the country self-reliant. • However, the plan was not completed due to the Sino-Indian war in 1962, Indo-Pakistani war in 1965, and a bad harvest in 1965-66, a severe drought. • Consequently, a three-year ‘Plan Holiday’ was declared, during which the annual plans were drawn up instead of the five-year ones. During this period, the groundwork for the Green Revolution was laid. • This period is also known as the year of ‘Growth with Stability’ and ‘Garibi Hatao’. 

Fourth Five-Year Plan (1969 – 1974) • ‘Garibi Hatao’ (poverty eradication) was the slogan of Indira Gandhi, who pursued active foreign policy and economic reform. Her government nationalized 14 major commercial banks in 1969. • India conducted its first underground nuclear test (“Smiling Buddha”) in 1974, which fits better the topic of the 5 th Five-Year Plan

. Fifth Five-Year Plan (1974 – 1979) • The target was to fight poverty and achieve self-reliance. The Minimum Needs Programme was launched for the first time. • After the Janata Party came into power, the 5 th Five-Year Plan was aborted a year before its termination date (in 1978) and replaced with the ‘Rolling Plan’.

3. Dissolution of the Planning Commission and emergence of NITI Aayog After twelve consecutive Five-Year Plans, the Planning Commission was dissolved on 31st December 2014 (NITI Aayog was formed on 1st January 2015). New Development Think Tank was formed in accordance with the principles of ‘cooperative federalism’, and it promotes the bottom-up approach to development planning.