THE EIGHTH FIVE YEAR PLAN

Abby VargheseB.Sc. Geography, Tourism & Travel Management

Madras Christian College

What are Five Year Plan (FYP)?◦ Five-Year Plans (FYPs) are centralized and integrated national economic

programs. Joseph Stalin implemented the first FYP in the Soviet Union in the late 1920s. Most communist states and several capitalist countries subsequently have adopted them. China and India both continue to use FYPs, although China renamed its Eleventh FYP, from 2006 to 2010, a guideline (Guihua), rather than a plan (Jihua), to signify the central government’s more hands-off approach to development. India launched its First FYP in 1951, immediately after independence under socialist influence of first Prime Minister Jawaharlal Nehru.

◦ The First Five-Year Plan was one of the most important because it had a great role in the launching of Indian development after the Independence. Thus, it strongly supported agriculture production and it also launched the industrialization of the country.

Who plans these FYP?◦ Since 1947, the Indian economy has been premised on the concept of planning.

This has been carried through the Five-Year Plans, developed, executed, and monitored by the Planning Commission. With the Prime Minister as the ex-officio Chairman, the commission has a nominated Deputy Chairman, who holds the rank of a Cabinet Minister.

Advantages of FYP◦ Centralized Planning◦ Focusing on weaker sections of the economy.◦ Special emphasis on region aiming to bring equality in terms of development.◦ Better allocation of public resources

The situation of the Nation during the Eighth FYP◦ 1989–91 was a period of economic & Political instability in India and hence no five-

year plan was implemented.◦Unemployment and under employment.◦ Indian intervention in the Sri Lankan Civil War◦ Rajiv Gandhi Assassination◦Demolition of Babri Masjid◦ Social Stir caused by Mandal Commission◦ Insurgency in Jammu and Kashmir◦ In 1991, India faced a crisis in foreign exchange (forex) reserves, left with

reserves of only about US$1 billion.

What was the Eighth FYP & Why was it so significant for Modern India?◦Magic of P.V Narasimha Rao (the 10th PM) led one of the most important

administrations in India's modern history, overseeing a major economic transformation and several incidents affecting national security.

◦ At that time Dr. Manmohan Singh (former Prime Minister of India) launched India's free market reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of privatization and liberalization in India.

◦ Together it was known as the “Rao and Manmohan model of Economic Development”

◦  India became a member of the World Trade Organization on 1 January 1995.

Aims of the Eighth FYP◦ Modernization of industries was a major highlight of the Eighth Plan.◦ Controlling population growth◦ Poverty reduction◦ Employment generation◦ Strengthening the infrastructure◦ Institutional building (Empowering of Panchayati Raj through the 74th Amendment Act of 1992)◦ Tourism management◦ Human resource development◦ Decentralization◦ Energy was given priority with 26.6% of the outlay◦ The Eighth Plan proposed a growth rate of 5.6% per annum on an average during the plan period.

Effectiveness of Eighth FYP◦ The average rate of growth of the economy rose from 6 per cent per annum in

the seventh plan (1985-90) to 6.8 percent in the Eighth Plan (1992-97). Growth averaged a high of 7.5 per cent per annum in the last three years of the Eighth Plan (1994-95 to 1996-97).

◦ The Agricultural Sector registered an annual growth rate of about 3.9 per cent during the Eighth plan period.

◦ The Industrial production increased at the rate of 8.6 per cent per annum.◦ Employment generation and Anti poverty programs have started showing

positive results.

Masterminds of 8th FYP◦ P. V. Narasimha Rao, Chairman◦ Pranab Mukherjee, Deputy Chairman◦ Manmohan Singh, Member◦ Sharad Pawar, Member◦ Balram Jakhar, Member◦ H.R. Bhardwaj, Member◦ Chitra Naik, Member◦ D. Swaminadhan, Member◦ V. Krishnamurthy, Member◦ C. Rangarajan, Member◦ J. S. Bajaj, Member◦ Jayant Patil, Member◦ S. Z. Qasim, Member◦ N. K. Sengupta, Secretary

Present FYP12th Five Year Plan of the Government of India (2012–17) is under drafting which aims at one direction will help in doing so the growth rate at 8%.