Achievements & Drawbacks Of Economic Planning


Economic planning in India was started in 1951. There were certain objective of economic planning which include –

  • achieving economic growth in terms of increase in real national and per capita income,
  • increase in the level of employment,
  • removal of inequality in the distribution of income removal of poverty,
  • ensuring social and economic justice etc.

By 2014, India has completed 63 years of planning and has entered into twelfth plan period. It is high time to know the achievements and drawbacks of planning keeping in view its objectives. Let us discuss them.

Achievements of Planning

Achievements in Economic Growth

Achieving economic growth was a major objectives of planning. To achieve growth it is necessary to achieve increase in national income and per capita income as well as increase in production of agricultural and industry sectors.

A review of different plans shows that, the first five-year plan was a success as it achieved a growth rate of 3.6 per cent against a target of 2.1 percent growth rate in national income. Then except for 5th and 6th plans, during the other plan periods i.e. from second to eleven five year plan the targeted growth rate in national income could not be achieved.

Similarly, The per capita income has attained growth but the rate of growth has been very slow. For example –

  • During the first 30 years of planning the per capita income grew at a very slow rate of 1.2 per cent per year. Recently this growth rate has increased to some extent.
  • Coming to agriculture, the food grain production has gone up from 51 million tones at the beginning of the first plan to 257.4 million tones in 2011-12.
    • Particularly the production of rice, wheat has been spectacular, but production of pulses and oil seeds etc., has been below target.

In terms of industrial development, a major achievement has been the diversification of Indian industries. There has been expansion of transport and communications, growth in generation and distribution of electricity and considerable progress in steel, aluminium, engineering goods, chemicals, fertilizers and petroleum products.

During the planning period, the per capita availability consumer goods and other essential items has increased considerably. The goods worth mentioning here include – cereals, sugar, milk, egg, edible oil, tea, cloth and electricity.

Creation of Infrastructure

India has achieved a great deal in the area of creation of infrastructure. There has been large expansion roads and railway networks. Domestic air travel has increased significantly. Expansion of irrigation and hydro-electric projects has given boost to agricultural production. There has been growth in establishment of towns and cities due to increase in urban infrastructure. Communication network in the form of mobile telephony, internet has expanded tremendously.

Development in Education

One of the brightest areas of achievements of planning has been the development in education in India. There has been a significant increase in the enrolment of children at school level. There are 378 universities and 18,064 colleges in India which is a good development for higher education. India has also 1.52 lakh higher secondary and 10.43 lakh primary and upper primary schools.

Development of Science and Technology

Another significant area of achievement has been the growth in science and technology including the increase in technical and skilled manpower. India’s march in space research has been noticed by the developed countries. It has made impact in the field of nuclear energy as well. Today India’s Dependence on foreign experts for consultation has reduced. On the contrary it is now able to send technical experts to many foreign countries in the middle east, Africa etc.

Expansion of Foreign Trade

Due to industrialization in the country, India’s dependence on import of capital goods has delivered. Many items, which were imported earlier are being produced domestically. Due to industrial progress, India is also able to export manufacturing and engineering goods.

Drawbacks or Failures of Planning

Besides the achievements as told above, there are many unfulfilled tasks which the planning in India is yet to achieve completely.

Failure to Remove Poverty and Inequality completely

Even after more than sixty years of planning, India has not been able to remove poverty completely. More than 240 million people are still under absolute poverty according to official estimates. The situation is worse in rural area. The government has introduced many anti-poverty measures. But they have not been very successful so far.

Similarly, there is no significant improvement in the distribution of income and asset holding resulting in existence of inequality. The number of landless agricultural labourers is very high as compared to the land holding population. The process of industrialization has helped some big industrial houses. This has resulted in concentration of economic wealth and power in few hands. This trend must be reversed if India wants to achieve equity and social justice.

Problem of Unemployment Persists

Despite of growth in income and output, India’s employment situation has not improved much. Due to faster growth of population and labour force the situation has worsened further. According to official estimates India’s unemployment rate is 6.6%. There is also huge backlog of unemployment due to lack of creation of required amount of jobs every year.

Failure to Curtail Corruption and Black Money

Existence of rampant corruption in various public offices is a matter of grave concern in India. Common person faces a lot of problem in getting things done without giving bribe. In fact corruption has become a major political issue in elections. Various forms of corruption include paying or accepting bribe, non-payment of tax to government, political influence to get contract, secret understanding among sellers to increase price etc. Corruption has given rise to black money which is not accounted anywhere but very much in circulation. A sizeable portion of India’s GDP is unaccounted . Black money creates inflation and pressure in the society. It is also the root cause of inequality in distribution of income as people who possess black money grow richer at the cost of common citizen.

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Bibliography : NIOS – Economics

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