INDIA'S FIRST FIVE YEAR PLAN

 Since its original conception, right up until parliamentary discussion, plan making in India has proved itself to be a dynamic democratic exercise. But its end result, i.e., the final plan, is itself quite indicative of how such an exercise operates. The resultant final product, however, presents many difficulties, considering that one needs to map out an optimum strategy for economic development.

History Of Planning in India & Origin of Five Year Plans

While the actual economic planning for India started in 1951 with the initiation of the First Five Year Plan, the theoretical planning was actually started earlier, even before India became an independent nation. Forming of the National Planning Committee by the Indian National Congress in 1938, Bombay Plan &Gandhian Plan in 1944, Peoples Plan in 1945 (by post war reconstruction Committee Of  Indian Trade Union), and the Sarvodaya Plan in 1950 by Jaiprakash Narayan.

India adopted its First FYP after gaining independence in 1951 due to socialism in the influence of the first Indian Prime Minister Jawaharlal Nehru. The planning exercise commenced from the formation of the Planning Commission in March 1950 in pursuance of the objective set out by the government which included the enhancement of the standard of living through better utilization of the resources of the country as well as increased production in order to provide employment opportunities to everyone for serving the community. The responsibilities assigned to the Planning Commission included evaluation of all resources available in the country, development of scarce resources, formulation of plans for optimum use of resources and priority setting.

The Eighth Plan was not able to get under way in 1990 because of the rapidly changing political scenario prevailing in the Center during this period. While 1990-91 and 1991-92 were taken as annual plans, the Eighth Plan was eventually put into effect from 1992. In case of the first eight Plans, there has been an importance placed on the expansion of the public sector along with large-scale investments being made in heavy and basic industries. However, since the Ninth Plan was announced, the importance of the public sector has declined and currently the idea about planning is that it should become more indicative in nature.

A few of the problems that make an urgent plan necessary :

• Poverty Cycle 
• Foreign Trade
• Rapid Industrialization
• Population Pressure
• Development of natural Resources 
• Lack of Capital and Imperfect Markets

First Five Year Plan (1951 - 56) 

First of all, the first five-year plan was introduced and enacted by the first Prime Minister of India, Jawaharlal Nehru. This plan was initiated in 1951, and the main aim of the plan was to improve the economy of the nation with the focus on the primary sector only. As for the primary sector of India, the main area that could be pointed is agriculture, which has been considered to be the backbone of its economy.  The total outlay for this plan was ₹2,378 crores, which was quite substantial for that time period.

This plan for the first five years, i.e. 1951-1956, was drawn by K.N Raj and followed the Harrod-Domar model, which belongs to the Keynesian approach to planning the economy. The first five-year plan meant to save the Indian capital for larger investments in the future and to make smaller capital investments at this stage. This would contribute to the growth and productivity of their economy.

The aim of the plan was to have GDP growth of about 2.1 % but it was exceeded up to 3.6%. This successful start of implementation of this plan let India believe in it. The goal of the first five-year plan was to ensure India's prosperity through self-reliance and improvement of its primary sector.

Objectives 

The most important agenda during the first five years (1951 – 1956) was to improve and advance agriculture in India. It had mainly concentrated on the ways in which agricultural development would be achieved, handling refugee problems, and promoting self-reliance. Some of the first five-year facts that were to be attained include

• Saving as much capital as possible for large scale projects in future.
• Increase per capita income.
• Improving the efficiency of the primary sectors.
• Production.
• Reducing dependence on foreign exchange.
• Employment generation.
• Shelters and food provisions for refugees.
• Output investment control and concentrating on production of internal capital.
• Rehabilitation of landless farmers.
• Controlling inflation.

Success of The First Five Year Plan 

As per the study of growth, the first five-year plan had been very successful. While the plan had targeted an estimated growth rate of 2.1% GDP, an actual growth rate of 3.6% GDP was achieved. This helped in achieving great economic progress as India had not seen for years together. 

While improvement was experienced in primary activities like agriculture and irrigation, other benefits included stability in prices, low rates of inflation, growth in capital formation, employment opportunities, and self-sufficiency. Facts relating to the first five-year plan also revealed developments regarding health, infant mortality rate, transport, technology, and medical sciences.

Towards the conclusion of the first five-year plan, five new technical institutions known as the Indian Institutes of Technology were established in India by the end of 1956. These highly prestigious educational institutions had been financed by the University Grants Commission (UGC).

Key Highlights :

• It was based on Harrod-Domar Model.
•  Influx of refugees, severe food shortage & mounting inflation confronted the country at the onset of the first five year Plan. 
• The Plan focused on agriculture, price stability, power and transport
•  It was a successful plan primarily because of good harvests in the last two years of the plan. 
• Objectives of rehabilitation of refugees, food self sufficiency & control of prices were more or less achieved.

Conclusion 

Despite its success in various aspects, there were certain drawbacks to the plan as well. The level of poverty and deprivation was not increased to a greater extent than before. The achievements in science and technology were also restricted on account of lack of resources and ignorance regarding scientific advancements.

Certain portions of the society were still suffering from hunger and starvation. The economic conditions in India, though slightly improved, were far behind those of other countries. Improvement in terms of employment and education was also needed.