A. Achievements of Planning:
1. Rise in national income:
These has been significant increase in national income during the plan period. The national income increased by an average of above 4% during economic planning.
2. Increase in per capita income:
Prior to independence, rate of increase in per capita income had been almost zero. But during the period of planning, per capita income increased at the rate of 2% p.a.
3. Increase in rate of capital formation:
Capital formation plays a significant rule in the economic growth of a country. During five year plans rate of capital formation has significantly increased. As the rate of capital formation depends on the rate of saving and investment, there has been considerable increase in the rate of saving and investment.
4. Institutional reforms in agriculture and Green Revolution:
Plans have contributed to the development of agriculture in two ways: Land reforms have been introduced in agriculture. Since 1966, stress has been given another technological advancement of agriculture. It resulted into Green revolution. During the period of planning, production of food grains has trebled.
5. Development of industries:
Industrial sector has received a lot of encouragement as a result of planning. Basic and capital goods industries like iron and steel, machinery, chemical fertilizers, etc. have developed adequately. During the period of planning, growth rate of industrial production has been around 6.9% per annum industrial production during the First Five Year Plan increased by 8%.
6. Development of Economic Infrastructure :
Economic infrastructure mainly includes transport, means of communication, irrigation facilities and the generation capacity of power, etc. During the period of planning, economic infrastructure has developed considerably.
7. Development of Social Infrastructure:
During the period of planning, country’s social services like education, health, and medical facilities, family planning, etc. also developed appreciably.
8. Employment:
Serious efforts have been made during plans to increase employment opportunities.
B. Failures of Economic Planning:
The following are the main features of economic planning in India.
1. No substantial increase in the Standard of Living:
All the five-year plans of India aimed at raising the standard of living of the people.
2. Rise in Prices:
Price stability has been one of the objectives of each Five Year Plans in India. But almost all the plans witnessed considerable rise in price level. First Plan is the only exception when price level comes down, in all other plans the prices recorded a steep rise.
3. Increase in Unemployment:
Unabated rise in unemployment was witnessed during the period of planning.
4. Less Growth in Production:
In the Five Year Plans, growth rate of production was slow in many states. Priority should have been given to the development of agriculture in all the plans, but it was not done.
5. Inadequate Development of Infrastructure:
Development of infrastructure like electricity, roads, transport, education, etc. ramained inadequate during the period of planning.
6. Inequality in Distribution of Income and Wealth:
The main objective of the Five Year Plan is to minimise inequality in distribution of income and wealth but during the period of planning the problem of inequality further.
7. Inecident Administration:
An expert team of U.N.O. observed that one of the main shortcomings of Indian planning has been with reference to its implementation.
8. Lack of Strong Foundation:
Despite completion of Nine Five Year Plans, economic base could not acquire strength. Even now use depend heavily on rainfall for agricultural production. Due to the failure of monsoon in 1965-66, 1966 – 67, 1979 – 80 and 1982 – 83, the entire economy was thrown out of gear.
