Nature of Indian economy in first three five years plan.
Indian-economy-first-three-five-years-plan.

learning objectives.

After reading this answer we will be able to know about:

The economic growth of India during the first three five year plans.
Agricultural Development, initiative taken for the development of irrigation.
The role of monsoon for the development of the economy.
The role of IITs,UGC for the development of Secondary Education.
Second plan focused on the public sector that is industrialization and especially heavy industry.

Introduction.

Before independence Indian economy was an unplanned economy. India's national income grew at a paltry rate. Agriculture ,the largest sector of Indian economy, was in a state of ruin. The greatest damage, of course, was done to Indian industry. India, the world largest exporter of textile in the pre British Era became a major Importer of textile during this time. The situation regarding health ,education and social indicators was also very poor.

From 1947 to onwards, the Indian economy was premised on the concept of planning. This was carried through a five year plan. important measures were taken in the first three five years plan for the development of agriculture, people’s standard of living ,industry, health education and other social indicators..

On the path of a planned economy.

A planned economy is a type of economic system where investment, production and the allocation of capital goods take place according to economic wide economic plans and production plans.

India adopted the planned economy from the very first of the five year plans and adopted the following agenda.

Multipronged inward oriented strategy of economic development based on self- reliance to be adopted.
Rapid industrialization based on import substitution including capital goods Industries.
Prevention of imperialist or foreign capital domination.
Land reforms involving abolition of zamindari, tenancy reforms, introduction of cooperative, especially service Cooperative and credit etc.
growth to be attempted along with equity.
The state plays a central role in promoting economic development including direct state participation in the production process.

Agrarian sector

On the agrarian front, the comprehensive land reform measures initiated soon after independence, the setting up a massive network for agricultural extension and community development work at the village level ,the large infrastructural investment in irrigation, power, agricultural research etc had created a condition for considering agricultural growth during this period.
During the three plans, India's agriculture grew at an annual rate of over 3%, a growth rate 7.4% times higher than that achieved during the last half century or so of the colonial period.
Focus on irrigation projects and construction of Mettur Dam ,Hirakud Dam and Bhakra dam. Soil conservation was given importance. Good monsoon played Vital role for agricultural development.

Industry

Industry during the first three plans, grew even more rapidly than agriculture at a compound growth rate of 7.1 % per annum between 1951 and 1965.
The industrial growth was based on Rapid import substitution initial of consumer goods and particularly since the second plan of capital goods and intermediate goods.
The emphasis on the letter since the second plan was reflected in the fact that 70% of plan expenditure on industry went to metal, machinery and chemical industries in the second plan and 80% in the third plan.
Consequently the three fold increase in aggregate index of Industrial Production between 1951 and 1969 was the result of a 70% increase in consumer goods industries ,a quadrupling of intermediate goods production and a 10 fold increase in the output of capital goods.

Infrastructure and other social needs.

Apart from industry and Agriculture, the early planners gave utmost priority to the development of infrastructure, including education and health, areas greatly neglected in the Colonial past.

The average actual plan expenditure during each of the first three plans on transport and communication was about 13 billion, accounting for an average of about 26% of the total plan expenditure in each plan. The corresponding figures for social or community service and power 9.4 billion and 19.9% and 6.16 billion and 10.6% respectively.

Over time plan investment in these areas (and in irrigation) was to prove critical both in stepping off private investment and improving its productivity

In 1965-66 as compared to 1950-51 installed capacity of Electricity was 4.5 times higher, number of towns and villages electrified was 14 times higher, Hospital beds 2.5 times higher ,enrollment in school was little less than three times higher and very importantly admission capacity in technical education that is Engineering and Technology at the degree and diploma level was the higher by 6 and 8.5 times respectively.

Science and Technology

Jawaharlal Nehru and yearly Indian planners were acutely aware of India's backwardness in Science and Technology and therefore massive effort to overcome this shortcoming. Nehru's temples of modern India consisted not only of Steel and power plants, irrigation Dam etc but also included Institution of Higher Learning, particularly in the scientific field.
During the first plan itself, high power National laboratories and institutions were set up.
National expenditure on scientific research and development kept growing rapidly with plan.
Great emphasis laid on human resource development in the sphere of Science and Technology.

Conclusion.

At independence, India inherited an economy that had suffered over 200 years of Colonial rule. In the last four decades before independence India's national income Grew at a slower rate, per capita income declined ,agricultural production failed, and industrial growth stagnated. The nehruvian program of development focused on a police of self Reliance, rapidly industrialisation based on import substitution, resistance of foreign capital and land reforms. In the early decade of planning national income grew rapidly at an average of4% per annum, agriculture gave at 3% per annum and industries at 7.1 % per annum.

K C SCHOOLING

Aug 11, 2020