indian 11th 5 year plan report

7/31/2019 Indian 11th 5 Year Plan Report

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India to target 8 % growth in 11th Plan

1. Agriculture

2. Backward Classes

3. Communication & Information4. Development Policy

5. Education

6. Environment & Forests

7. Financial Resources

8. Health & Family Welfare

9. Housing & Urban Development

10. Industry & Minerals

11.Labor, Employment and Manpower12. Multi Level Planning ,Power & Energy, Energy Policy and Rural Energy

13.Programme Evaluation Organization14. Rural Development15. Social Justice & Women Empowerment16. Science & Technology17. State Plans18. Tourism19. Transport20. Village & Small Enterprises21. Voluntary Action Cell22. Water Resources23. Women and Child Development24. International Economics

New Delhi: With greater focus on agriculture and infrastructure, India should be able to achieve agrowth rate of 8% in the 11th Plan period (2007-12), Planning Commission Deputy ChairmanMontek Singh Ahluwalia said here Monday.

Notwithstanding the average 5.5% growth in the 9th Plan (1997-2002) and less than 7% growth inthe first three years of the Tenth Plan (2002-07), Ahluwalia said, 'We should be aiming at 8 %growth in the 11th Plan period.'

The real challenge is to support the industry and agriculture sector to record a higher growth rate,said Ahluwalia during an interactive session on the projections for the 11th Plan with the Forum ofFinancial Writers.

Agriculture has remained the weakness in India's failure to achieve high growth rates, he admitted.'The first target in the 11th Plan, the deliberations on which have just begun, has to be to put inplace a strategy to double agriculture growth.'

'In retrospect, the critical weakness was that agriculture growth was expected to be 4 % but it wasonly half that in the Ninth Plan. Similarly, in the 10th Plan also, it has been below target,'Ahluwalia said.


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The official said it is not just landless labor and marginal farmers who are facing a problem in theagriculture sector but the various issues like market access and 'underlying growth problems'pervade across the board.

The real issue, he said, is that of low agriculture growth due to lack of irrigation facilities in about

60 percent of agricultural land.

An estimated investment of Rs.800 billion is required to provide better irrigation facilities in thedry areas. In the case of urban and rural infrastructure, under the Bharat Nirman project, he said thegovernment is relying on public-private partnership.

'The 11th Plan will provide a credible strategy to promote industrial and agriculture growth. In thecase of infrastructure, we will rely on more public-private partnerships,' the official said.

With the demand for urban services set to increase in the years ahead, 'which no city is equipped tohandle', Ahluwalia said there is a critical need to take up renewal of urban reforms.

In the social sectors like health and education, the economist said there would be a greaterrequirement for stepping up public sector funding with the private sector providing partnership inimproving the delivery system.

He suggested that local elected representative should be made responsible for ensuring betterdelivery of primarily health service to people in villages.

NEW DELHI: Rejecting the charges levelled by BJP-ruled states that the 11th plan focused onminorities, Prime Minister Manmohan Singh on Wednesday said there was no attempt to dividepeople on caste and religion and the focus remained on the most marginalized sections of the

society.

"The goal of this plan is to invest in our people to enable them to become active participants ineconomic growth processes. The plan does not attempt to divide people on the basis of caste, creedor gender or religion," he said just before the National Development Council approved the 11thFive Year Plan document.

Gujarat Chief Minister Narendra Modi had alleged that the Centre had resorted to "communalbudgeting" and demanded that there be a review of the Prime Minister's 15-point agenda forminorities. Madhya Pradesh Chief Minister Shivraj Singh Chauhan had echoed the sentiment.

The Prime Minister said that it was, however, a reality that there are certain social groups who arerelatively badly placed on all developmental indicators. The plan does pay special attention on theneeds of these marginalized groups and targets them in a precise manner.

"Inclusiveness does mean better targeting and it is not at the cost of other groups. You will allagree that if we hope to have a prosperous, equitable, just India, we must cover all groups andensure that no one is left behind," he said.


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Earlier, opposing "communal budgeting", BJP's Modi sought a review of the programme thatstipulates earmarking 15 per cent of targets under various schemes for minorities.

He said the 15-point programme that focuses on earmarking certain outlays of developmentalschemes among the eligible beneficiaries, based on their minority status, should be reviewed for

maintaining the social fabric of the nation.

Later, Planning Commission Deputy Chairman Montek Singh Ahluwalia said the allocation offunds for minorities in the 11th plan was part of government's commitment toward inclusive andequitable growth.

"It is an unfortunate reality that our society is socially fragmented and the minorities along withother groups have not benefited adequately from many of our development schemes," Ahulwaliasaid while reacting to Modi's criticism.

He said inclusive growth and social harmony could not be achieved if minorities remained

excluded. "It is for this reason that the plan contains specific proposals to ensure an equitable flowof benefits to the minorities who are different in different states," he said.

Ahluwalia pointed out that the Plan proposals were based on Prime Minister's 15-Point Programmefor Minorities, and focused on "ensuring adequate access to essential services in various forms oflivelihood support".

Government would focus on districts where there is high concentration of minorities. However, theprogrammes in these districts would not involve discrimination in favor of minorities as such, hesaid.

"The services provided will be available to all persons in these districts. Where the programme arein-principle individual beneficiary-oriented, the eligibility criterion remains BPL (below povertyline)," he said.

India envisages 12% growth for MSE in 11th Plan

New Delhi: The Government of India has envisaged a growth rate of 12 per cent for the micro andsmall enterprises (MSE) sector during the 11th 5 Year Plan 2007-12.

Stating this, the Minister for Micro, Small and Medium Enterprises Mahabir Prasad said thegovernment implements various schemes and programmes to enable MSE compete in the global

market and strengthen their export competitiveness.

Such programmes and schemes, inter alia include assistance for participation in internationalexhibitions and fairs and reimbursement for obtaining bar-code certification under its MarketDevelopment Assistance (MDA) scheme, the Minister said.

In addition, other support measures such as organizing training programmes on packaging forexports, assistance for technology up gradation under Credit Linked Capital Subsidy Scheme


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(CLCSS) and incentives for obtaining ISO/9000-14001 are included to promote exportcompetitiveness of the MSE sector.

Prasad said that during the year 2005-06, Indian MSE sector accounted for approximately 33 percent of the total exports from the country.

Meanwhile, the Confederation of Indian Industry (CII) has pointed out that quality and innovationare essential for micro, small and medium enterprises (MSMEs) to compete in the global businessenvironment and drive the Indian economy.

Speaking at the fifth India Global Summit on MSMEs 2008 in New Delhi, the Minister ofOverseas Indian Affairs Vayalar Ravi called the growth of this sector a movement.

The summit organized by the Confederation of Indian Industry (CII), the Ministry of MSMEs inassociation with Small Industries Development Bank of India (SIDBI) themed transformingMSMEs into world class entities.

Mentioning that the government has supported this sector since the 1950s, he said with theenactment of Micro, Small and Medium Enterprises Development Act (MSMED Act) 2006, thegovernment continues to give full support to the MSMEs.

The MSMEs Additional Secretary and Development Commissioner Jawahar Sarcar emphasizedthe importance of this sector, with a total size of US $140 billion, as the driving force for the long-term growth of the Indian economy.

The MSMEs are a vital part of the Indian economy contributing over 45 per cent of the countrysindustrial production and around 40 per cent of the total exports, while employing over 31 million

people by 13 million MSMEs, Sarcar said.

He further stated that the government has identified three thrust areas for increasingcompetitiveness in this area, which include technology, skills development and finance.

The Development Commissioner spoke on the National Manufacturing CompetitivenessProgramme, which has 10 components in various stages of approval, of which six concentrate onquality.

Emphasizing on quality and innovation, CIIs Manufacturing Innovation Mission Chairman DrSurinder Kapur said in the long term it will be innovative SMEs which will drive transformation.

Speaking at the Summit, ELICO Managing Director Ramesh Datla said that while the MSMEshave been globally recognized as a priority growth sector for growth and development, there is stilla lack of clear developmental agenda and program of action for MSMEs for various reasons.

Any future agenda, he said, needs to encourage the development of SMEs in an environment ofincreased economic interdependence and open regionalism.I Government Bureau---


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Average 9% growth in 11th Plan possible: Eco Survey

Finance Minister, P Chidambarampresented the Economic Survey 2007-08 beforethe Parliament today. While asserting that inflation can be contained, Mr.

Chidambaram also emphasized that an average GDP growth of 9% is achievable inthe 11th Plan. The FM said the countrys growth has been reflected in the pace atwhich the average income is growing.

The Economic Survey, however, reveals that capital inflows have been putting pressure on prices.On investment opportunities, the Survey assures that a climate conducive for investment will be

maintained. The FM said there is no need to ensure non-inflationary growth.

Excerpts from Finance Minister, P Chidambaram's speech:

I have just placed the Economic Survey for 2007-08 on the table of the House, and I wish to makea brief statement. The economy has decisively moved to a higher growth trajectory during the fiveyears to 2007-08. In terms of GDP, the growth rate has averaged 8.7% per annum during these fiveyears. This indicates stability and sustainability.The growth is reflected in a near doubling of the pace at which the average income of our people isgrowing. If the rate of growth of per capita GDP at market prices continues at a five-year averageof 7.2% per year, average income would now double in a decade instead of a generation or more.The acceleration and improvement in the condition of the common man is also reflected in a neardoubling of the rate of growth of per capital private consumption to 5.1% per annum from 2.6% inthe previous 11 years.With better targeting of government services, and an increase in their quality, we can ensure thatoverall welfare of the common man in terms of both private consumption and supply of publicgoods continues to increase rapidly.I am optimistic about growth and containment of inflation in the coming year, which will be mypriority - to continue to provide a conducive investment climate and manage the macro economy tofacilitate non-inflationary growth. We have to ensure that the benefits of this growth percolate tothe most marginal and vulnerable segments of society.

If you wish me to sum up in one phrase the outlook for 2008-09, I would say, Optimism, but withcaution as the watchword. There are a number of things going in favor of India. We need tocapitalize on these opportunities, while at the same time, responding to the evolving situation inthe global economy, in a manner that our growth story is not affected.

Additional inputs from CNBC-TV18's Vivian Fernandez:


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Economic fundamentals

Economics maintains a cautious stance on economic growth it says that even thoughmacroeconomic fundamentals are sound and the investment climate is full of optimism,maintaining 9% growth will be a challenge and raising it to double digits will be tougher still. TheSurvey admits that with the economy modernizing, globalizing and after last years unexpectedlyhigh growth of 9.4%, some degree of cyclical fluctuation was expected for deceleration of growthto 8.7% - this has not come as a surprise. This has been factored into the 11 th Plan to achieve anoverall growth of 9% growth during this Plan. The economy will have to grow by 10% to 11% inthe closing years of the 11th plan.The economic fundamentals continue to inspire confidence and the investment climate is full ofoptimism for further economic growth the survey says as translated into the governments mantrathat is more inclusive growth both in terms of job opportunities and poverty reduction. But whileemployment growth has risen to 2.6%, the labor force has grown faster; the unemployment rate hasrisen to 8.3% in the 5-years to 2005 from 7.3% in the previous 5-years. So the unemploymentsituation has deteriorated.

Policy on FDIsUnlike in previous years, when policy options were scattered through the Economic Survey, theSurvey revisits the controversy on FDI and retailing and wants some equity to be given to foreigninvestors in all retailing sectors and 100% FDI allowed in consumer durable, semi-durable andluxury brand chains. It makes a case for 51% FDI in special category insurance firms, providinghealth and weather covers for farmers while renewing the call for raising the limit to 49% in other

areas. Inbanking, it wants 100% FDI in new private Rural Agricultural Banks, with freedoms totakeover other private sector banks as an incentive - it wants them to be allowed to freely expandin small towns.All these are recommendations and it does not mean that all these recommendations will be carriedout because the Finance Minister will have to negotiate the political midfield and the numbers arenot stacked in his favor for example on retailing. Even though the Survey says that 100% FDIshould be allowed in consumer durable and luxury brand chains, the Left parties may not allowhim to do that.

Rupee/ Exports-Imports/ Fiscal Deficit

The Survey also endorses the demand of the labor intensive and rupee-hit sectors like garmentexporter for an increase in the working week to 60 hours to an amendment of the Factorys Act, sothat they can meet seasonal demands. It says that controls on sugar, fertilizer and drugs should bephased out and reiterates the call that made in the Economic Survey of 2005 to amend the CoalMines Nationalization Act, to allow regulated private entry into coal mining, as coal mining is onlyallowed for captive users in cement and power.


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The Survey says that the government will be able to meet both the revenue and fiscal deficit targetsfor this year. One would recall that the Prime Ministers Economic Advisory Council has saidearlier this year - While the fiscal deficit targets could be met, the revenue deficit targets might behard to achieve. But the Survey says that is not the case both the deficit targets will be met. Butnext year it says, it will be difficult to bring revenue deficit to zero as mandated by the FRBM

(Fiscal Responsibility and Budget Management) because strong tax revenues seen this year areconditional on the economy continue to grow strongly next year and because of the adverse globalclimate that might not be possible.

But on a fiscal deficit front it says, that the deficit target of 3% will be achieved, the target set forthis year will be met because of record tax collections. There is a word of praise for the States, thesurvey say that the State has done much better than the Centre. All 26 States have enacted FRBMlegislation and they will together turn in a revenue surplus of 0.3% this year. The survey says thatthere is a need to reduce the fiscal deficit to below 3% in the coming years to make RBIsmonetary policy more effective, lower interest rates, reduce the gap with other countries and easepressure on the rupee.

On the rupee front the survey says that the rupee has appreciated by 9.8% since April last year andby 13% last calendar. It quotes an IMF study to suggest that the rupee might be close to itsequilibrium level. It says that it is not possible to establish a link between overall exports and thereal exchange rate in the short-term; in the medium to long-term the survey says that productivitygrowth is a key to sustaining exports or manufacture growth and services. It admits that labourintensive export sectors like textiles have been hit apart from the rising rupee. The survey blamelabour laws, lack of scale economy, logistical delays and high cost of power for all these things.

Investments on infrastructure

Even though the Survey says that the fiscal deficit should be reduced below 3% in the comingyears, the planning commission itself has said that we must relax the fiscal deficit target toaccommodate more investment in infrastructure, so I dont think the government will reduce fiscaldeficit below 3%.

The point regarding revenue deficit, the economic survey says that the target for this year will bemet but I think there is a bit of fudge here because the survey is completely silent on off-Budgetsubsidies given in the form of bonds to oil companies, fertilizer units and to the Food Corporationof India. It is says that the subsidies this year are expected to be increased this year by Rs 6,550crores over the Budget estimate of Rs 51,247 crore and that this might arrest their decline aspercentage of GDP. It glosses completely over off-Budget subsidies and infact there is not a single

mention of off-Budget subsidies that the government has given.On the ratio of inflation, the economic survey says that inflation in case of investment goods hasdeclined from 5.3% or so and that is positive from investment point of view.

Tighter fiscal deficit targets


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The economy survey says that this is necessary so that the interest rates can be brought down andthe pressure on the rupee can be eased and the bankfunds are not pre-empted by the governmentbut I do not think that the government will actually go below 3%.

There is no need actually to go below 3% in fact it can use a fiscal deficit to invest in

infrastructure. What is required is of course to contain the revenue deficit which is unproductivebut to expand a government expenditure on infrastructure because it has multiple effects on theeconomy.This is what the Survey recommends

Prime Minister Manmohan Singh today said that the Eleventh Five Year Plan would focus oneducation, particularly vocational and science education, with a five-fold increase in the spendingon this sector compared to the Tenth Plan.

Inaugurating the 95th Indian Science Congress at Andhra University campus in the port city of

Visakhapatnam, Singh reiterated the Government's commitment to investing more, in education,especially science education.

"The 11th 5 Year Plan is in fact a National Education Plan. The Plan allocation for education hasbeen stepped up from 7.7% of gross budgetary support for the Plan, in the 10th Plan, to over 19% inthe 11th Plan. In nominal terms, there is going to be a 5-fold increase in spending on education inthe 11th plan. This is an unprecedented increase in financial support for education in India," hepointed out.

"We are planning to fund 30 new Central Universities, five new Indian Institutes of Science,Education and Research, 8 new IIT, 7 new IIM & 20 new IIIT," he added.

The Prime Minister said the Central government would launch a Mission on Vocational Educationand Skill Development through which 1,600 new ITIs and Polytechnics, 10,000 new vocationalschools and 50,000 new Skill Development Centers would be opened across the country.

"We will ensure that annually, over 100 lakh students get vocational training - which is a 4 timeincrease from today's level. Detailed plan for implementing these proposals will be spelt out in thenext 6 months," he explained.

To enlarge the pool of scientific manpower and foster research in the sciences, a new programmeentitled "Innovation in Science Pursuit for Inspired Research" (INSPIRE), is being launched.

Under this programme, over the next 5 years, 10 lakh school students will be given scienceinnovation scholarships of Rs 5,000 each. The Plan will also support Scholarships for HigherEducation (SHE), providing 10,000 scholarships of Rs One lakh (Rs 100,000 million) per year, toattract talented students to enroll in B.Sc. and M.Sc. courses.

"Our strategy for the promotion of science education in the 11 th Plan will aim at expanding andstrengthening the Science & Technology base in our Universities and promoting excellencethrough competitively secured funding at centers for advanced research. In addition, discipline-
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specific education programmes will be launched in strategic sectors like nuclear sciences and spacesciences to capture talent at the "plus-two" stage itself," he added.

The Prime Minister said this would mark a quantum leap in the infrastructure available for goodquality teaching and research. He reiterated the Central Government's commitment to increase the

annual expenditure on science and technology from less than 1% of the GDP to 2% of GDP in thenext 5 years.

"We must make science a preferred discipline of study for our students. We must attract the bestand the brightest young people to a career in science. We need both a qualitative improvement anda quantitative expansion in the pool of science students in India. This means we will also needmore teachers. We will need an army of teachers, especially in the basic sciences and in the field ofmathematics. Shortage of good teachers is an immediate challenge," he told the delegates attendingthe 5-day Science Congress.

He urged the academic community to come forward with innovative ideas to help overcome and

meet this challenge effectively. "Tried and tested methods will not suffice. We need fresh creativethinking. Out-of-the-box solutions. The academic community too must be willing to thinkcreatively," he observed

Kolkata, Feb 3 - External Affairs Minister Pranab Mukherjee Sunday said a major thrust in the

11th Five-Year Plan (2007-12) will be on agriculture and the aim would be to achieve a record four

percent growth in the sector.

Predicting a 10 percent growth in the 11th Plan, Mukherjee said: 'We need to have food security

and for that, ensuring agricultural productivity is our foremost challenge. ''In the last five years,

agriculture has grown at an average of two percent per annum. We will have to achieve four

percent growth in the 11th plan period,' Mukherjee said while addressing the 176th annual general

meeting of Calcutta Chamber of Commerce here. 'By assisting growth in yields and productivity,

we would entail creation of better infrastructure in irrigation facilities, including cold chains,

development of commodity exchanges and forward markets.' He said the population pressure on

land has to be eased and agro-based food processing promoted by public-private partnerships.

9th Year Plan

1.1 The Ninth Five Year Plan, launched in the 50th year of Indias Independence, will take thecountry into the new millennium. Much has happened in the fifty years since independence. The

people of India have conclusively demonstrated their ability to forge a nation united despite itsdiversity, and their commitment to pursue development within the framework of a functioning,vibrant and highly pluralistic democracy. In this process democratic institutions have put downfirm roots and flourished and development has also taken place on a wide front. As the millenniumdraws to a close, the time has come to redouble our efforts at development, especially in the socialand economic spheres, so that the country will realise its full economic potential and the poorestand the weakest will be able to shape their destiny in an unfettered manner. This will require not


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only higher rates of growth of output and employment, but also a special emphasis on all-roundhuman development, with stress on social sectors and a thrust on eradication of poverty.

1.2 The Approach Paper to the Ninth Five Year Plan, adopted by the National DevelopmentCouncil, had accorded priority to agriculture and rural development with a view to generating

adequate productive employment and eradication of poverty; accelerating the growth rate of theeconomy with stable prices; ensuring food and nutritional security for all, particularly thevulnerable sections of society; providing the basic minimum services of safe drinking water,primary health care facilities, universal primary education, shelter, and connectivity to all in a timebound manner; containing the growth rate of population; ensuring environmental sustainability ofthe development process through social mobilization and participation of people at all levels;empowerment of women and socially disadvantaged groups such as Scheduled Caste, ScheduledTribes and Other Backward Classes and Minorities as agents of socio-economic change anddevelopment; promoting and developing peoples participatory bodies like Panchayati Rajinstitutions, co-operatives and self-help groups; and strengthening efforts to build

1.3 Some specific areas from within the broad objectives of the Plan as laid down by the NDChave been selected for special focus. For these areas, Special Action Plans (SAPs) have beenevolved in order to provide actionable, time-bound targets with adequate resources. Broadly, theSAPs cover specific aspects of social and physical infrastructure, agriculture, informationtechnology and water policy.

1.4 The Ninth Plan is based on a careful stock taking of the strength of our past developmentstrategy as well as its weakness, and seeks to provide appropriate direction and balance to thesocio-economic development of the country. The principal task of the Ninth Plan will be to usherin a new era of growth with social justice and participation in which not only the Governments atthe Centre and the States, but the people at large, particularly the poor, can become effective

instruments of a participatory planning process. In such a process, the participation of public andprivate sectors and all tiers of government will be vital for ensuring growth with justice and equity.

Special Area Programmes

1.1 The objectives of the Ninth Plan have been spelt out in the Approach to the Ninth Five YearPlan document adopted by the National Development Council. "Growth with Social Justice andEquity" is proposed to be achieved with the objectives outlined in the Approach Paper. Somespecific areas from within the broad objectives of the Plan as laid down by the NDC have beenselected for special focus. For these areas, Special Action Plans (SAPs) have been evolved in orderto provide actionable, time-bound targets with adequate resources. Broadly, the SAPs cover

specific aspects of social and physical infrastructure, agriculture, information technology and waterpolicy.

1.2 Volume-I of the Ninth Plan document covers not only the macro and economy-wide issues butalso reflects on the important general aspects of the sector specific issues, particularly theapproaches to policy formulation. The main thematic areas covered in Volume-I, inter alia, includeEconomic infrastructure, energy, agricultural development and food security, industry andcommerce, and the financial sector.


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1.3 Volume-II gives perspectives on how the sectoral programmes fit into realisation of planningthemes enumerated in Volume-I. The sectoral chapters deal with the trade-off in objectives bothfor the perspective period and during the Ninth Plan, commonality in approach, policy framework,institutional structure, delivery mechanism, possibility of synergy and convergence and majorrequirements i.e. labour, input and technology.

1.4 In individual sectoral chapters, policies and programmes during the Eighth Plan period havebeen reviewed, shortcomings identified and new policy framework suggested to overcome theshortcomings and ensure sustainability of the development process not only in economic terms butalso in terms of social and environmental factors. Sectorwise overview is discussed in thesucceeding paragraphs:

Agriculture, Food Security and Irrigation

1.5 The Strategy of agricultural development would be centred around achieving the objectives ofsustainability of employment generation, food and nutrition security, equity and poverty

alleviation. Efforts will be made to achieve a growth rate of 4.5 per cent per annum in agriculturaloutput in order to make a significant impact on overall growth and poverty. Regionallydifferentiated strategies will be followed to realise the full potential of growth in every region. Theemphasis will be on raising the capabilities of small peasants and promoting sustainableagricultural systems, while at the same time conserving and maximising the value from scarceresources, water and land. Infrastructure development will be given the highest importance.Emphasis will be laid on minor irrigation by harnessing ground water resources. Timely andadequate availability of inputs will receive special attention. The regional programmes will beformulated in such a manner as to ensure provision of inputs to the farmer, particularly in theremote, hilly, backward and tribal areas. Agricultural credit is a crucial input and it will receivespecial attention. The programmes relating to land reforms would be strengthened to raise

agricultural growth and help the poor. Efforts will be made to increase public investment duringthe Plan period. In every district, the Rural Infrastructure Development Fund (RIDP) would beused to promote projects which encourage organisations of groups of small farmers, artisans andlandless labourers for skill up-gradation, processing, transport infrastructure, quality improvementetc. Support to agricultural research will be enhanced and emphasis will be placed on bio-technology, microbiology, genetic improvement of crops including hybrid technology, genetic up-gradation of animal resources, improvement of fish genetic stock and post-harvest technology, etc.Efforts will be made to accelerate the growth rates of allied sectors such as horticulture, includingfruits and vegetables, fisheries, livestock and dairy. Agricultural exports will receive specialattention as these have a lot of potential for increasing farm incomes and employment, besidesearning foreign exchange. Co-operatives will be strengthened. Greater participation of women inagriculture than at present will be encouraged. Linkages with markets will be strengthened andagro-processing and agro-industries will be encouraged.

1.6 Self-sufficiency in food-grains for the country as a whole does not necessarily imply food andnutrition security for all. Making food available through the PDS at affordable prices has been akey element of our food security system. However, untargeted PDS has resulted in a steady rise ofbudgetary food subsidy. During the Ninth Plan subsidised food grains is proposed to be targetedonly to people below the poverty line so as to ensure that budgetary subsidies reach the needy and


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become sustainable. In addition to reorienting PDS, food supplementation programmes for theidentified vulnerable groups such as women and children (such as ICDS, Mid-day Meal, Vitaminsand Iodine deficiency programmes) are proposed to be extended and strengthened.

Industry & Minerals

1.7 The thrust of the new industrial policy announced in July 1991 has been on substantialreduction in the scope of industrial licensing, simplification of procedures, rules and regulations,reforms in the Monopolies and Restrictive Trade Practices(MRTP) Act, reduction of areas reservedexclusively for the public sector, disinvestment of equity of selected public sector enterprises(PSEs), raising the limit of foreign equity participation in the domestic industrial undertakings,liberalisation of trade and exchange rate policies, rationalisation of duties, etc. with a view topromoting growth and increasing efficiency and international competitiveness. Steps were alsotaken to bring public sector enterprises within the ambit of Board of Industrial and FinancialReconstruction (BIFR), providing a social security net through National Renewal Fund (NRF),industrialisation of backward areas through growth centres scheme, opening up of mining sector to

private sector, strengthening of technological capacity etc. Industrial growth rate during the EighthPlan was, however, lower than that achieved in the Seventh Plan. One of the major constraintsfaced by the industrial sector is inadequate availability of infrastructural support, which not onlyaffected domestic production but exports as well. However, the industry has responded well to theopening up of the economy and has realised the importance of competitiveness with the result thatdue emphasis is being given to modernisation, up-gradation, economies of scale, quality, researchand development, etc. The rate of foreign direct investment has also started picking up in responseto the improved policy environment.

1.8 The Ninth Plan envisages an industrial growth rate of 8.50% per annum and export growth of11.8% per annum. For achieving this growth, special measures have been suggested to ensure

adequate availability and requisite quality of infrastructure and creating conditions conducive forunhindered growth of such industries which can produce products at internationally competitiveprices. Internal aberrations in policies are proposed to be removed and special measures envisagedto promote development of industries in backward areas. Special emphasis has been given to theindustrial and economic development of the North Eastern Region by evolving a special packagewhich, inter alia, includes changes in the funding pattern of growth centres and integratedinfrastructure development centres, extension of transport subsidy scheme, strengthening ofinstitutions concerned with entrepreneurship and human resources development etc., variousphysical concessions and incentives and specific measures for development of industrial sub-sectors like agriculture, handicrafts, handloom etc. It is also proposed to review the working ofBIFR and bring about necessary changes to make it an effective instrument of reviving sickindustrial units. The scheme of National Renewal Fund is also proposed to be recast throughappropriate modifications to make it more effective and achieve the objectives of providing asocial safety net as originally envisaged. The retention price-cum-subsidy scheme for fertilisersand dual pricing scheme for sugar is also proposed to be reviewed and necessary changes will bemade with a view to ensuring healthy development of these industries.

1.9 The small scale sector has shown considerable resilience and in-built strength and growth rateof this sector has been about two to three percentage points higher than that of large and medium


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industries. Due emphasis would be given for making available adequate credit to the sector, andpromote production and productivity through technological up-gradation.

1.10 In the unorganised sector, a cluster approach will be adopted for provision of training, up-gradation of skills and improvement in tool kits, equipment and production techniques to increase

production, productivity and income levels of artisans, craft-persons, weavers, spinners andworkers etc.

Energy

1.11 The major thrust of the on-going reform process in the Energy Sector has been to make itcommercially viable and also to attract private sector participation. The Ninth Plan lays emphasison bringing about a commercial outlook among the PSUs, attracting private sector participation inthe development of energy sector, encouraging a competitive environment not only between publicand private sectors, but between public sector units, need for regulatory agencies for fixation oftariff, conservation of resources, safeguarding the interest of consumers and protecting the

environment. Energy-economy interaction, viz. the demand for energy in the economy, the sourcesfrom which this demand is met, the changes in the pattern of energy consumption from non-commercial to commercial, changes in the composition of commercial energy use, energy-GDPelasticity along with some policy measures have been discussed. New policies in the Ninth Plan ongetting the private sector to invest in the electric power generation, transmission and distribution,in coal mining, in petroleum exploration, production and arranging of supply of liquefied naturalgas have been considered. Restructuring of the electricity supply system to make it commerciallyviable, bankable and professional, rapid increase in oil and coal production by deregulating theindustry in a short period of time are some of the aspects which will receive due consideration.

Transport

1.12 The country's transport system which comprises of rail, roads, sea port and airports is facingcapacity saturation. Inadequacies and imbalances in transport threaten to constrain economicgrowth and the quality of life in both urban and rural areas. A large number of villages lack reliableall-weather connection with nearby markets and towns. Areas like North East and Jammu &Kashmir have remained physically and emotionally isolated because the transport system has notlinked them adequately with the rest of the country. Environment friendly and socially cost-effective means of transport like coastal shipping, inland water transport and non-mechanizedtransport, etc. also have remained undeveloped. Distortions in the inter modal mix of transport;environment and energy linkages, safety and technology up-gradation have been examined. Thediverse issues facing the transport sector require a comprehensive policy package. Strengthening ofthe Indian railways in its reach and capacity so that it effectively links the distant parts of thecountry, helps to develop economic potential of the backward areas and carries the bulk of thenation's long or medium haul traffic is necessary. Similarly road networks need to be expanded andstrengthened. There is also a need to modernize our seaports and airports with a view toaugmenting their capacity and making them of international standard.

1.13 Policy options, each backed by adequate investment and complemented by suitable policychanges in other sectors, have been discussed and emerging issues and strategies visualized for


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development have been elaborated. The pricing policy in future would have to be based on fullrecovery of cost. Subsidies/concessions will be direct through General Budget or sectoral budgetso that the health of the transport enterprises is not impaired. Attempts will be made to mobilizeresource from user charges in various ways. Non-tariff measures will also be taken for resourcegeneration. Revenue mobilization through tariff and non-tariff measures, stress on productivity of

human and material assets and cost cutting will be pursued vigorously in the public sector transportenterprises. Measures will be taken for increasing the involvement of private capital in theexpansion and strengthening of infrastructure in railways, road, shipping and airports. The privateparticipation can take many forms like full or joint ownership management contract, leasing,concessions like BOT etc.

Communications, Broadcasting and Information Technology

1.14 Information Technology (IT) is fast emerging as the technological infrastructure for globalintegration and rapid development of all sectors of economy. IT broadly includes all sub-sectorsdealing with the generation, transmission and utilization of information like telecommunications,

computers, consumer electronics, media infrastructure etc. Recognizing the impressive growth thecountry has achieved in IT since mid-eighties, its immense potential for future growth and itsimportance as an agent of transformation of every facet of human life, a high priority has beenaccorded to the development of this sector. The Ninth Plan would aim to make India a global ITsuper power and a front runner in the information revolution. To help devise an appropriate policyframework towards achieving this objective, a National Task Force on Information Technologyand Software Development has been set up with Deputy Chairman, Planning Commission as itsChairperson. Expansion of the telecom network and its transformation into a modern and efficientsystem would be the two thrust areas during the Ninth Plan. Universal coverage or telephones ondemand, universal and easy accessibility, world standard services to consumers at affordableprices, demand based provision of existing value added services and introduction of new services

would be the major objectives for the Ninth Plan. To achieve the objective of providing telephoneson demand, 237 lakh new telephone connections are envisaged to be provided.

Environment & Forest

1.15 The Agenda 21 of the Rio Summit calls for integration of environmental aspects withdevelopment aspirations. One of the objectives of the Ninth Five Year Plan is to ensureenvironmental sustainability through social mobilization and participation of people at all levels. Itis also based on the belief that the principal task of planning in a federal structure is to evolve aclear vision and commitment to the national objectives and development strategy by both central,State and local governments. Therefore, emphasis is being placed on reorienting the policies ratherthan on direct intervention so as to send proper signals and induce economic development. Thestrategy in the Ninth Plan for the environment sector has been drawn up in accordance with thedevelopment needs of the nation. The measures required to protect the environment will be takenin such a way as to achieve sustainable development. The strategy recognizes the symbioticrelationship between tribal and the forests, and gives a special focus to the scheduled castes, thetribal and the weaker sections living in and around the forests. A number of enabling conditionshave already been created for harmonizing economic growth and environmental conservation.


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These include the macroeconomic compatibility, the implementation of the 73rd and 74thConstitutional amendments and the measures being undertaken in the implementing ministries.

Human and Social Development

1.16 Human Development and improvement in the quality of life are the ultimate objectives ofplanning. This is to be achieved through policies and programmes aimed at promotion of bothequity and excellence. Benefits of national economic programmes reach the different segments ofthe population through different channels and at different rates. Economic growth improvesemployment opportunities and employment improves income and purchasing power. But themarket mechanism may not improve access to available facilities or fully meet the essential needsof the population with inadequate purchasing power. Social sector planning therefore ensures thatappropriate policies and programmes are formulated and adequate investment provided by theState so that poor and vulnerable segments of the population can access essential commodities andfacilities based on their needs and not on the ability to pay.

1.17 Despite the fact that there has been a decline in the incidence of poverty over the past twodecades, millions continue to live below the poverty line, a large proportion of whom reside inrural areas. Therefore, specifically designed anti-poverty programmes for generation of both self-employment and wage-employment will continue in the Ninth Plan. These would, however, berationalised and re-designed in order to make them more effective as instruments of povertyalleviation. Under the self-employment programme of Integrated Rural Development Programme(IRDP) there would be a progressive shift from the individual beneficiary approach to the groupand/or cluster approach. A holistic approach would be adopted with an integration of the existingsub-schemes of Training of Rural Youth for Self Employment (TRYSEM), Development ofWomen and Children in Rural Areas (DWCRA), Supply of Improved Toolkits to Rural Artisans(SITRA), and Ganga Kalyan Yojana (GKY) in the IRDP. Jawahar Rozgar Yojana (JRY) will be

confined to the creation of rural infrastructure according to the felt needs of the people at thevillage level through panchayats. However, at the block and district level, the EmploymentAssurance Scheme (EAS) would be the single wage-employment programme. Efforts would bemade to bring about a greater integration between the poverty alleviation programmes and thevarious sectoral programmes as well as the area development programmes within the umbrella ofthe Panchayati Raj Institutions (PRIs).

1.18 In the area of basic minimum services, the Ninth Plan has placed greater emphasis on primaryhealth care, primary education and provision of safe drinking water and shelter.

1.19 Over the last five decades a massive health care infrastructure has been built up in urban andrural areas. National programmes to combat major health problems have been evolved andimplemented through this infrastructure. These have resulted in a steep fall in mortality. Howeverthere has not been any reduction in the communicable diseases and nutrition related morbidity.There has been a progressive increase in the non-communicable disease burden, occupational andenvironmental health related problems . Focus during the Ninth Plan will be to provide integratedpreventive, promotive, curative and rehabilitative services for communicable, non-communicableand nutrition related health problems, through appropriate strengthening of the existing health careinstitutions and ensuring that they are optimally utilised. Efforts will be made to achieve


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substantial reduction in morbidity and mortality rates by taking advantage of the ongoingdemographic transition and progressive increase in the population in the 15-59 age group.

1.20 Over the last five decades there has been a steep decline in severe grades of under-nutritionand related health problem. Currently major nutritional problems of public health importance are

(a) chronic energy deficiency (CED) especially in pregnant women and pre-school children; (b)obesity and consequent increase in non-communicable diseases especially among urban affluentsegments of population; (c) micro-nutrient deficiencies of iron, iodine and vitamin A andassociated health hazards. During the Ninth Plan, efforts will be made to achieve substantialreduction in CED and its health consequences through universalization of ICDS, screening ofpregnant and lactating women, growth monitoring and better targeting of food supplements tothose with CED, close monitoring of persons receiving food supplements; close inter-sectoral co-ordination to ensure early detection and management of health problem leading to or associatedwith under-nutrition. Prevention, early detection and effective management of micro-nutrientdeficiencies and associated health hazards will receive due attention.

1.21 The technological advances and improved quality and coverage of health care resulted in arapid fall in Crude Death Rate (CDR) from 25.1 in 1951 to 9.8 in 1991. In contrast, the reductionin Crude Birth Rate (CBR) has been less steep, declining from 40.8 in 1951 to 29.5 in 1991. As aresult, the annual exponential population growth rate has been over 2% in the last three decades.During the Eighth Plan period the decline in CBR has been steeper than that in the (CDR) andconsequently, the annual population growth rate has been around 1.9% during 1991-95. Reductionin the population growth rate has been recognised as one of the priority objectives during the NinthPlan period. This will be achieved by meeting all the felt-needs for contraception; and reducing theinfant and maternal morbidity and mortality so that there is a reduction in the desired level offertility. The efforts will be made to minimise the existing disparities between states by providingresources to fill the crucial gaps in infrastructure and manpower and improving the operational

efficiency of health system; improving the access and quality of reproductive and child healthservices to enable the increasingly aware and literate families to attain their reproductive goals inharmony with the national goals and accelerating the rate of reduction in population growth rate toachieve rapid population stabilisation.

1.22 Manpower development to provide adequate labour force of appropriate skills and quality todifferent sectors essential for rapid socio-economic development and elimination of the mismatchbetween skills required and skills available has been a major focus of human resource developmentactivities during the last fifty years. Employment generation in all the productive sectors is one ofthe basic objectives. In this context, providing enabling environment for self employment hasreceived special attention both in urban and rural areas. Objective is also to eliminate bondedlabour, employment of children and women in hazardous industries, and minimize occupationalhealth hazards. During the Ninth Plan period, elimination of such undesirable practices as childlabour, bonded labour, ensuring workers' safety and social security, looking after labour welfareand providing of the necessary support measures for sorting out problem relating to employment ofboth men and women workers in different sectors will receive priority attention. It is alsoenvisaged that the employment exchanges will be reoriented so that they become the source oflabour related information, employment opportunities and provide counselling and guidance toemployment seekers.


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1.23 The Ninth Plan treats Education as the most crucial investment in human development withobjective of eradicating illiteracy by 2005. Special Action Plan has identified the expansion andimprovement of social infrastructure in education as a critical area. An overriding priority will begiven for providing access to schooling to children in the age group 6-11 years. A special thrustwill be on girls' education by providing free education up to college level including professional

courses. Vocational education at the secondary and under-graduate levels will be expanded andrestructured so as to have strong linkages with industry and improve employability. The intakecapacity of the IITs, other reputed engineering institutions and IIMs will be doubled, particularly inhigh demand areas like software engineering and information technology. PRIs will be empoweredto serve as the nucleus in programme implementation. Non-governmental organizations will beencouraged to supplement the governmental efforts, private sector will also be facilitated to growparticularly in higher and technical education. Care will, however, be taken to ensure that thecountry does not lag behind in terms of creative artists and scientists. Accordingly, education inbasic sciences and areas of fundamental research will be promoted and strengthened.

1.24 To ensure the well-being of the disadvantaged sections of the society, there has been a

definite shift in the approach from `welfare' to `development' and to `empowerment' over the lastfour and a half developmental decades. In line with this new approach, all the welfare anddevelopmental measures have been directed towards empowering the Socially DisadvantagedGroups, such as women, Scheduled Castes, Scheduled Tribes, Other Backward Classes andMinorities, as the agents of social and economic change and development. While in the case ofwomen, efforts are now being made to make them economically independent and self-reliantthrough various employment and income-generating activities, the main thrust in respect ofchildren is to ensure their survival, protection and development with a special focus on the girlchild and the adolescent girl. In the field of social welfare, the special focus will be now onempowering the persons with disabilities; reforming the deviants like juveniledelinquents/vagrants, alcoholics and drug addicts; and caring for other disadvantaged, viz. street

children, older persons and destitutes. The main strength of these efforts is derived from variouslegislations enacted for protecting the interests of these groups. Towards empowering the SociallyDisadvantaged Groups, a three-pronged strategy of Social Empowerment, EconomicEmpowerment and Social Justice, will be adopted in the Ninth Plan.

Housing, Urban Development and Water Supply

1.25 The key urban concern is the growing gap between demand and supply of basic services.While there has been a steady growth in the housing stock, infrastructure and basic services, thegaps between demand and supply have been growing even in terms of conservative norms. Thisgap has a deteriorating impact on the urban environment, inadequacy of urban planning, urbanpoverty and degradation. With a view to achieving the goal of `Health for all', the Government iscommitted to provide drinking water to every settlement in the rural and urban areas within nextfive years. It has also been decided to ensure that sanitation facilities are improved and expandedrapidly. A new National Housing and Habitat Policy has been evolved which aims at providing`Housing for All'. Towards this end the Government will facilitate construction of 20 lakhadditional housing units annually in urban and rural areas. To achieve these objectives SpecialAction Plans have been prepared.


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1.26 The rural hinterland has played a critical role in sustaining urbanization. This is reflected inthe indicators of sources of primary inputs, competitively priced labour for urban economicactivities, primary funds as reflected in comparative urban and rural credit-deposit ratios andmarket for urban pockets. But the unending migration of the rural poor to the urban areas may havea destabilizing effect of urbanization and its sustainability. Income and employment opportunities

will have to rise in rural areas through both the farm and non-farm sectors. The rural - urbancontinuum would be strengthened so that the gaps between rural and urban life styles are reduced.Effective urban strategies and programmes cannot be developed in isolation of those living in ruralareas. The Ninth Plan will take cognisance of this ground realities, particularly in respect of thethree critical components viz. drinking water, sanitation and housing.

Science and Technology

1.27 The Science and Technology policy and approach for the Ninth Plan reflects the reality of thepresent day world in which nations progress along their own chosen path but in a much moreclosely inter-connected and inter-dependent manner. Science and Technology continues to remain

the main focal point for exploring new horizons and new vistas, economic prosperity and meetingthe economic, industrial, trade and societal challenges. Policy initiatives have been suggested toensure the benefits emerging from the S&T reach all sections of the community including theweaker sections of the society. Since a strong science base is a pre-requisite for achievingtechnological competitiveness, efforts will be continued to build and maintain the same. Scientistswith exceptional capabilities would be nurtured and supported fully by offering them within thecountry facilities comparable with international standards, by creating more centres of excellencein institutions of higher learning for supply of future S&T manpower and by utilizing the existinginfrastructure in terms of facilities and manpower more efficiently. Research programmes,particularly in some of the chosen fields of agriculture, export and industry would be taken up onin a mission mode through appropriate restructuring and reorientation of many of the scientific

institutions and laboratories. The emphasis will be on clean and eco-friendly technologies. Themajor focus of the S&T programmes will be to encourage and strengthen interaction among R&Dinstitutions and the users. Development of core strength and concentration on areas wherecompetitive strength can be built so that the technological competitiveness can be converted intocommercial strength are envisaged. In the light of the international control regime, greaterawareness would be created among the scientists and technologists regarding the patents and IPRrelated issues for protecting the interest of the country. Science and technology activities in theStates and UTs would be geared up to take up location specific R&D programmes for S&T inputsin the key sectors of the socio-economic development through promotion of joint innovativeprogrammes with industry and NGOs.

1.28 The importance of developing S&T in a major way has been recognized since independence.The whole hearted support provided to science and technology since then has resulted in manyaccomplishments in a wide variety of disciplines. Support to basic research has been receiving arather high priority during the earlier plans. Though this may continue to a considerable extent, aproper balance would be maintained between fundamental research and applied research inscientific fields. Recent developments have brought home the need to accord high priority totechnology related areas, particularly the process technologies, which may be characterizsed ascore technologies, which need to be strengthened with particular emphasis on ensuring partnership


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with the concerned socio-economic activities and industry wherever possible. In this process theIndian industry and the users of technology have a crucial role to play in generation of technologyin order to sustain a competitive technological edge.

5TH YEAR Plan

A REVIEW OF THE ECONOMIC SITUATION

The Draft Fifth Five Year Plan was formulated in terms of 1972-73 prices and in the context of theeconomic situation obtaining in the first half of the fiscal year 1973-74. Thereafter, two majordevelopments took place. The inflationary pressures gathered momentum till September, 1974; andthe balance of payment position worsened due to the steep rise in the prices of imported oil andother materials.

1.2. The first intimations of the inflationary pressures came in 1972-73, thereafter these pressuresgathered strength in 1973-74 and continued unabated right upto September, 1974. During thisperiod, the index rose by 31.8%. Food articles and industrial raw materials accounted for abouttwo-third of the price increase. The prices of machinery, transport equipment and manufacturedgoods contributed to a little over one-fourth to the overall increase in prices. These pressures werefirst felt as a result of severe drought conditions in 1 972-73, followed by shortages of variousessential consumer goods and critical raw-materials and inputs. Shortage of power together withhigher international prices of imported inputs and their inadequate availability led to the stagnationof industrial production during 1973-74. The price situation was aggravated by continuedexpansion in money supply partly due to large deficit financing and partly due to excessive

expansion of bank credit to the commercial sector. Thus in 1973-74 the money supply increased by15.4% over and above the increase of 15.9% registered in 1972-73. Acting together with theunaccounted money unregulated expansion of money supply in a situation of shortages providedan added impetus to the activities of speculative and unsocial elements. Owing to the escalation ofcosts and prices, even the administered prices of important intermediate goods such as steel, coal,cement and aluminum had to be raised as a defensive action. The procurement and issue prices ofimportant cereals such as rice and wheat were also increased significantly. This not only had adirect impact on the cost of living index but also strengthened the inflationary tendencies.

1.3. The balance of payment position also came under severe strain. Large quantities of food grainsand essential wage goods had to be imported. The four-fold increase in oil prices and increase in

prices of cereals, fertilizers, machinery and equipment, non-ferrous metals and other importedgoods severely eroded the resources. The value of the three principal items of imports, namelyfood, fertilizers and POL accounted for as much as 53.2% of the total import bill in 1974-75, asagainst 42.6% in 1973-74 and 23% in 1972-73. In absolute terms the import bill for these itemsincreased from Rs. 431 corers in 1972-73 to Rs. 1260 corers in 1973-74 and to about Rs. 2500crores in 1974-75. No doubt value of exports also increased but the balance of trade showed adeteriorating trend. The trade gap turned from a surplus of Rs. 103.4 crores in 1972-73 to a deficitof Rs. 432 crores in 1973-74 and Rs. 1190 crores in 1 974-75. This trend was both on account of


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sharp deterioration in the terms of trade since 1 973 and larger imports of certain commoditiesmentioned above. Borrowings from IMF including special oil facility to the extent of about Rs.485 crores was resorted to in 1974-75 to meet the deficit in balance of payment. Thesedevelopments together with uneasy economic conditions in some countries abroad and unstableinternational monetary conditions could not but have an adverse impact on the Plan.

1.4. Inevitably, the financial and physical magnitudes of the Plan as well as the balance of paymentposition got distorted. Escalation in costs, higher outlays on public consumption and non-development expenditure led to erosion of resources for the Plan resulting in staggering ofprogrammers owing to diminution in the size of investment in real terms. Investments in theprivate sector also felt the impact. With such fluidity both at home and abroad, the finalization ofthe Plan had to await the emergence of a more stable situation.

1.5. Deferment of the finalization of the Plan did not imply a Plan holiday but a rephrasing of thePlan outlays, in the light of emerging circumstances. It implied that while planning, one hadinevitably to pay considerable attention to the short-term management of the economy. Measures

had to be devised urgently for containing inflation at home and for keeping the economy in properalignment with the fast changing international developments. Necessarily priorities had to bedefined even amongst the stated priorities, consistent with the objectives of the draft Plan.Naturally, food and energy became the most important sectors for investment planning. Thesuccessive Annual Plans had to be formulated on these considerations.

1.6. The Annual Plan 1 974-75 was formulated at a time when the inflation rate was quite high. Itwas, therefore, designed mainly to control inflation and increase production particularly in the keysectors. The Plan outlays had to be kept at a modest level. Yet care was taken to ensure adequateprovisions for agriculture including irrigation and fertilizers, energy (power, coal and oil), ongoingprojects in steel, non-ferrous metals and certain basic consumer goods industries. Emphasis was on

fuller utilization of the unutilized capacities. The provisions for social services was restrained butkept at a reasonable level.

1.7. During the year, a comprehensive strategy was evolved and a package of measuresfiscal,monetary and administrativewas introduced. It included mobilization of additional resources(both by the Centre and the States), allocation of funds to high priority projects, restraint on growthof money supply and a crack down on anti-social elements. Disposable incomes were regulatedthrough impounding of certain additional incomes, imposition of restrictions on dividends andcompulsory savings by tax payers in the higher brackets. The procurement prices of majoragricultural crops were not allowed to rise. These measures effected deceleration in the rate ofgrowth of money supply, significant improvement in price situation and easy availability ofessential goods. The money supply increased by only 6.9% in 1 974-75 as against an increase of 15.4% in the previous year. The index of wholesale prices declined by 7.1% between endSeptember, 1974 and end March, 1975.

1.8. Though inflation was contained, yet the economy was still operating under various constraints.Agricultural production in 1 974-75 declined by 3.1 %. Industrial production grew at 2.5%. Whilethe rate of aggregate investment (net) increased from 13.6%, in 1973-74 to 14.8% in 1974-75, the


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rate of domestic savings (net) recorded a marginal increase from 12.8% in 1973-74 to 13.1% in 1974-75. As already mentioned the balance of payment deteriorated.

1.9. Having achieved a certain measure of price stability by the end of 1974-75, the Annual Planfor 1975-76 could aim at growth under conditions of price stability. Agriculture, Irrigation, Power,

Coal, Oil and Fertilizers, therefore, continued to receive priority. Projects capable of yielding quickresults received special attention. Labor discipline and sustained anti-hoarding/smugglingoperations created an appropriate climate. An excellent harvest gave timely vigor and push. Thenational income is estimated to have increased by 6 to 6.5% during 1 975-76agriculturalproduction by about 10% and industrial output by 5.7%. Procurement of nearly 1 3 million tones offood grains in 1 975-76, along with imports enabled the build-up of a high level of stocks of foodgrains (17 million tones). The wholesale price index fell from 307.1 at end of March, 1975 to283.0 at the end of March, 1976by about 8%,. The year 1975-76 closed with an overallbudgetary surplus of over Rs. 200 corers against a deficit of Rs. 490 corers estimated earlier. Thebalance of trade continued to be a matter for concern during 1975-76 and the trade gap was as highas Rs. 1216 cores. This was in spite of the fact that the value of exports had increased by 18.4%

and imports by only 14%. However, as a result of larger inflow of private remittances because ofeffective action against smuggling and illegal dealings in foreign exchange and increase in netforeign aid the balance of payments was not strained. The foreign exchange reserves reached ahigh level of Rs. 1885 crores at the end of the year as against Rs. 969 crores at the end of theprevious year.

1.10. With stability of prices and growth in economy achieved during 1 975-76, a bolderprogramme of investment was drawn up for 1976-77. The Annual Plan 1976-77 envisages anoutlay of Rs. 7852 crores which represents an increase of 31.4% over the original Plan allocationfor 1975-76. The New Economic Programme and consideration of social justice could receivegreater attention. The high priority accorded to critical sectors of the economyagriculture

including irrigation, energy and intermediate goods was continued. Not only did on-going schemesreceive full attention, but new starts in critical sectors could also be envisaged on a selected basis.This strategy together with mobilization of additional resources was expected to maximise thegrowth potential of the economy.

1.11. Thus, the efforts made so far have succeeded in checking inflationary tendencies and givingthe economic situation a promising turn. Some of the constraints which seriously hampered theprocess of growth in the earlier period have been removed to a considerable extent. There is easyavailability of essential raw materials and inputs. There is greater economic discipline and arenewed dynamism in the country at present. A considerable measure of price stability has beenachieved and it is hoped that the recent increase in price level will be contained by effectivemeasures which have been initiated. There is a large buffer stock of foodgrains with the publicagencies and the position of foreign exchange is satisfactory. The international monetary systemhas also stabilised to a certain degree. The Planning Commission, therefore, consider this anappropriate time to finalize the Fifth Plan. With this end in view a meticulous and detailedexamination of the development programme for the remaining two years of the Fifth Five YearPlan has been undertaken. What emerges is a clearer delineation of the targets and policiesespecially in relation to the priority sectors.


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Resolution of the National Development Council on the FifthFive Year Plan

Fully considering the Draft of the Fifth Five Year Plan as finalized;Re-affirming the objectives of

self-reliance and removal of poverty; Noting, the effective steps taken to curb the inflationarytendencies; Endorsing the emphasis on Agriculture, irrigation, energy and related core sectors; andAppreciating the strength and purposiveness of the Nation in its desire to implement the newEconomic Programmed; Realizing the continued need for maximizing return on the massiveinvestments made and the imperative necessity for mobilizing resources; The NationalDevelopment Council at its meeting in September 1976 hereby adopts the Fifth Five Year Plan;andAppeals to all sections of the people to cooperate in the national effort to fulfill the targets setout in the Plan.

indian 11th 5 year plan report

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