Economic Planning & Objectives & Reason Behind Failures of Economic Planning
Economic Planning & Objectives & Reason Behind Failures of Economic Planning
Economic Planning & Objectives & Reason Behind Failures of Economic Planning
7. Basic Objectives: One of salient features of Indian Five Year Plan is that each and every plan is guided by certain basic or
fundamental objectives which are almost common in most of our plans.
The major objectives of economic planning in India mostly consist:
(a) Attainment of higher rate of economic growth (b) Reduction of economic inequalities (c) Achieving full employment (d)
Attaining economic self reliance (e) Modernisation of various sectors (f) Redressing the imbalances in the economy. In
general, Growth with social justice is the main objective of economic planning in India.
8. Unchanging Priorities: Five year plans in India are determining its priorities considering the needs of the country. It is being
observed that Indian Five Year Plans have been giving too many priorities on the development of industry, power and
agriculture with minor modifications. Thus there is no remarkable changes in the priority pattern of Indian planning, although
in recent years increasing priorities are also being laid on poverty eradication programmes and on employment generating
schemes.
9. Balanced Regional Development: Another salient feature of Indias Five Year Plan is that it constantly attaches much
importance on balanced regional development. Development of backward regions is one of the important objectives of Indian
planning. Indias planning system has even isolated some states under special category states so as to channelize additional
resources to these backward states for their rapid development.
10. Perspective Planning on Basic Issues or Problems: Another important feature of Indian planning is that it has adopted the
system of perspective planning on some basic issues or problems of the country, for a period of 15 to 20 years on the basis of
necessary projections.
11. Programme Implementation and Evaluation: Indian planning system is broadly supported by programme implementation
machinery, which used to play a very important role. Programme implementation machinery includes various Government
departments which are usually involved for the implementation of the plan. More there is an evaluation machinery which
usually conducts pre-project evaluation and post-project evaluation of every planning project of the country.
12. Shortfalls in Target Realization: Another notable feature of Indias Five Year Plan is its shortfalls in target realization.
Although targets are fixed for every plans in respect of rate of growth of national income, employment, population, production
of some important items etc. But in most of the cases these targets are not fulfilled to the fullest extent, excluding certain
specific cases. Such shortfalls in target realization lead to the problems of spill over of projects into next five year plans and
cost over-runs.
7. Paradox of Saving and Investment: Although during the planning period there has been appreciable increase in saving and
investment, yet the growth rate of economy has been very slow. Several factors account for this paradox: (a) Capital output
ratio is very high in India. It is around 3.6:1 relatively less increase in production. (b) Considerable part of investment is in the form
of buffer stocks of food grains and not in time form of fixed capital formation. No wonder, despite the increase in the rate of
investment there is no corresponding increase in production. (c) Large portion of investment is made in traditional sector instead of
modern one.
8. No increase in the Standard of Living: All the five year plans of India aimed at raising the standard of living of the people. In fact
what to say of improving the living standard, even the basic necessaries have not yet been provided to the people. On an average, a
normal healthy person needs 2508 calories of food per day but in India per capita availability of food is 2400 calories.