Concept of Rolling Plan
The Indian Planning Commission decided in September 1977 to introduce the rolling plan concept with effective from April I, 1978 with a view to ensuring greater flexibility and realism in planning.
It was felt that the past pattern proved to be vulnerable to changes in the domestic and international economies and did not adequately provide for the inevitable fluctuations in agricultural output . Under the rolling plan concept. a five-year plan i formulated as before. but it is revised level year of the performance of the various sectors economy and availability of resources. That is. there dual operational plan for each year with a fresh perspective. Thus, there is a five-year plan in continuous existence. being reviewed and extended year by year.
But it would be unfortunate if long-term perspectives are sacrificed on gerunds of expediency and excessive reliance placed on short-term changes in programmed. The complexities of the situation and structural problems make a clear tense of direction imperative. It is equally true that ad choc cuts in planned investment can disturb the basic
plan balances. In fact, the critics of the Rolling Plan complain that it may lead to no plan at all. They argue that a rolling perspective plan cannot take care of heavy industries with very long gestation periods. But it is not true that a roll perspective plan cannot plan for heavy industries at all. Only. the attainment of the targets in their case will depend upon the prevailing circumstances in anyone year.
Some people hold the view that it would usher in an era of “realistic and purposeful” planning in the country in the period to come. It is said that the rolling plan concept is eminently practical. It is considered that the rolling plan concept would make the government action-oriented. as accountability would increase when the yardstick for judging the results is short-term. It might help the administration cut bureaucratic red tape, and corruption involved in clearing industrial licences, as the people are impatient for results.
Related Economics Assignments
Planning in India | Economics-1
- 1938:‘National Planning Committee’ was established under the chairmanship of Jwahar Lal Nehru by the Indian National Congress. Its recommendations could not be implemented because of the beginning of the Second World War and changes in the Indian political situation.
- 1944: ‘Bombay Plan’ was presented by 8 leading industrialists of Bombay.
- 1944: ‘Gandhian Plan’ was given by Shriman Narayan Agarwal.
- 1945: ‘People’s Plan’ was given by M N Roy.
- 1950: ‘Sarvodaya Plan’ was given by J P Narayan. A few points of this plan were accepted by the Government.
THE PLANNING COMMISSION OF INDIA
- The Planning Commission was set – up on March 15, 1950 under the chairmanship of JL Nehru, by a resolution of Union Cabinet.
- It is an extra – constitutional, non – statutory body. (i.e., No provision in Constitution for its formulation.)
- It consists ofPrime Minister as the ex – officio Chairman, one Deputy – Chairman appointed by the PM and some full time members.
- The tenure of its members and deputy chairman is not fixed. There is no definite definition of its members also. They are appointed by the Government on its own discretion. The number of members can also change according to the wishes of the Government.
GOVERNMENT’S 1950 RESOLUTION
- To make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting those resources which are found to be deficient in relation to the nation’s requirement.
- To formulate a plan for the most effective and balanced utilisation of country’s resources.
- To define the stages, on the basis of priority, in which the plan should be carried out and propose the allocation of resources for the due completion of each stage.
- To indicate the factors that tend to retard economic development.
- To determine the conditions which need to be established for the successful execution of the plan within the incumbent socio-political situation of the country.
- To determine the nature of the machinery required for securing the successful implementation of each stage of the plan in all its aspects.
- To appraise from time to time the progress achieved in the execution of each stage of the plan and also recommend the adjustments of policy and measures which are deemed important vis-a-vis a successful implementation of the plan.
- To make necessary recommendations from time to time regarding those things which are deemed necessary for facilitating the execution of these functions. Such recommendations can be related to the prevailing economic conditions, current policies, measures or development programmes. They can even be given out in response to some specific problems referred to the commission by the central or the state governments.
NATIONAL DEVELOPMENT COUNCIL INDIA
- All the plans made by the Planning Commission have to be approved by National Development Council first. It was constituted to build co – operation between the States and the Planning Commission for economic planning.
- It is an extra – constitutional and extra – legal body.
- It was set – up on August 6, 1952, by a proposal of the Government. The PM is the ex – officio chairman of NDC. Other members are Union Cabinet Ministers, Chief Ministers and Finance Ministers of all States, Lt. Governors of Union Territories and Governors of Centrally – ruled States.
|Jawahar Lal Nehru||March, 1950||May, 1964|
|Lal Bahadur Shastri||June, 1964||Jan, 1966|
|Indira Gandhi||Jan, 1966||Mar, 1977|
|Jan, 1980||Oct, 1984|
|Morarji Desai||25.03.1977||Aug, 1979|
|Charan Singh||10.08.1979||Jan, 1980|
|Rajiv Gandhi||Nov,1984||Dec, 1989|
|V.P. Singh||22.12.1989||Nov, 1990|
|Chandra Shekhar||Dec, 1990||Jun, 1991|
|P.V. Narasimha Rao||June 1991||15.05.1996|
|Atal Behari Vajpayee||16.05.1996||31.05.1996|
|H.D. Deve Gowda||Jun, 1996||April, 1997|
|I.K. Gujral||April, 1997||March, 1998|
|Atal Bihari Vajpayee||March, 1998||May, 2004|
|Dr. Manmohan Singh||May, 2004||…………|
FIRST FIVE YEAR PLAN (1951 – 56)
- Based on Harrod – Domar Model.
- Community Development Program was launched in 1952.
- Emphasized on Agriculture, Price Stability, Power and Transport.
- It was more than a success, because of good harvests in the last two Years.
SECOND FIVE YEAR PLAN (1956 – 61)
- Also called ‘Mahalanobis Plan’ after its chief architect PC Mahalanobis. It was based on 1928 Soviet Model of Feldman.
- Its emphasis was on economic stability. Agriculture target fixed in the first plan was almost achieved. Consequently, the agriculture sector got low priority in the second five Year plan.
- Its objective was Rapid Industrialization, particularly basic and heavy industries such as iron and steel, heavy chemicals like nitrogenous fertilizers, heavy engineering and machine building industry.
- Besides, the Industrial Policy of 1956 emphasized the role of Public Sector and accepted the establishment of a socialistic pattern of the society as the goal of economic policy.
- Advocated huge imports which led to emptying of funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon. During this plan, price level increased by 30%, against a decline of 13% during the First Plan.
THIRD FIVE YEAR PLAN (1961 – 66)
- At its conception time, it was felt that Indian economy has entered a take – off stage. Therefore, its aim was to make India a ‘Self – Reliant’ and ‘Self – Generating’ Economy.
- Also, it was realized from the experience of first two plans that agriculture should be given the top priorityto suffice the requirements of export and industry.
- The other objectives of the plan included the expansion of basic industries, optimum utilization of country’s labor power and reducing the inequalities of income and wealth.
- Relied heavily on foreign aid (IMF).
- Complete failure due to unforeseen misfortunes, vizard Chinese aggression (1962), Indo – Pak war (1965), severest drought in 100 Years (1965 – 66).
- Prices increased by 36% in 5 – Years.
- Hence, third plan failed in every respect.
PLAN HOLIDAY – THREE ANNUAL PLANS (1966 – 69)
- Plan holiday for 3 Years.
- The prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans.
- During these plans a whole new agricultural strategy involving wide – spread distribution ofHigh – Yielding Varieties (HYVs) of seeds, the extensive use of fertilizers, exploitation of irrigation potential and soil conservation was put into action to tide – over the crisis in agricultural production.
- During the Annual Plans, the economy basically absorbed the shocks given during the Third Plan, making way for a planned growth.
FOURTH FIVE YEAR PLAN (1969 – 74)
- The Fourth Plan set before itself the two principal objectives – growth with stability and progress towards self – reliance.
- Main emphasis on agriculture’s growth rate so that a chain reaction can start.
- Fared well in the first 2 Years with record production,last 3 Years failure because of poor monsoon.
- Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo – Pak war.
- During the planning period, prices increased by about 61%.
FIFTH FIVE YEAR PLAN (1974 – 79)
- The Fifth Plan prepared and launched by DD Dhar proposed to achieve two main objectives vizard, ‘Removal of Poverty’ (Garibi Hatao) and ‘Attainment of Self Reliance’, through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings.
- National Program of Minimum needs was initiated in which Primary Education, Drinking Water; Medical facilities in rural areas, Nourishing Food, Land for the Houses of Landless Laborers, Rural Roads, Electrification of the Villages and Cleanliness of the dirty suburbs were included.
- The plan was terminated in 1978 (instead of 1979) when Janta Government, came to power.
ROLLING PLAN IN INDIA (1978 – 80)
- There were 2 Sixth Plans – One by Janta Government (for 78 – 83) which was in operation for 2 Years only and the other by the Congress Government when it returned to power in 1980. The Janta Government Plan is also called ‘Rolling Plan’.
- The focus of the plan was enlargement of the employment potential in agriculture and allied activities, encouragement to household and small industries producing consumer goods for consumption and to raise the incomes of the lowest income classes through minimum needs program.
SIXTH FIVE YEAR PLAN (1980 – 85)
Increase in National Income, Modernization of Technology, Ensuring continuous decrease in Poverty and Unemployment, Population Control through Family Planning, etc.
SEVENTH FIVE YEAR PLAN (1985 – 90)
- The Seventh Plan emphasized policies and programs which aimed at rapid growth in food – grains production, increased employment opportunities and productivity within the framework of basic tenants of planning.
- It was a great success, the economy recorded 6% growth rate against the targeted 5%.
EIGHTH FIVE YEAR PLAN (1992 – 97)
- The Eighth Plan was postponed by 2 Years because of political upheavals at the Centre and it was launched after a worsening Balance of Payment (BoP) position inflation during 1990 – 91.
- The plan undertook various drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6%.
- Some of the main economic performances during Eighth Plan period were rapid economic growth, high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit.
- The most notable feature of the Eighth Plan period was that the GDP grew at an average rate of 6.8% exceeding the target growth rate of 5.6%.
NINTH FIVE YEAR PLAN (1997 – 2002)
- It was developed in the context of four important dimensions: Quality of life, generation of productive employment, regional balance and self-reliance.
- Growth rate of GDP during the plan was 5.4% per annum as against the target of 6.5%.
- Agriculture grew by 2.1% as against the target of 4.2% p.a.
- Industrial growth was 4.5% as against the target of 3% p.a.
- Exports grew by 7.4% (target was 14.55%) and imports grew by 6.6% (target was 12.2% p.a.).
- Services grew at the rate of 7.8% p.a.
TENTH FIVE YEAR PLAN (2002 – 2007)
- The major objectives were as under:
- To attain a growth rate of 8%.
- Reduction of poverty ratio to 20% by 2007 and to 1.0% by 2012.
- Providing gainful high quality employment to the addition to the labor force over the Tenth Plan period.
- Universal access to primary education by 2007.
- Reduction in gender gaps in literacy and wage rates by at least 50% by 2007.
- Reduction in decadal rate of population growth between 2001 and 2011 to 16.2%.
- Increase in literacy rate to 72% within the plan period and to 80% by 2012.
- Reduction of Infant Mortality Rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012.
- Reduction of Maternal Mortality Rate (MMR) to 20 per 1000 live births by 2007 and to 10 by 2012.
- Increase in forest and tree cover to 25% by 2007 and 33% by 2012.
- All villages to have sustained access to potable drinking water by 2012.
- Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.
- The plans have traditionally focused on setting national targets, but it has been found that there is a variation in the performance of different States. The Tenth Plan focused on ways and means of correcting the regional imbalance.
- Currently, eight States, with poor health and demographic indices, constitute 44.7% of India’s population. Special efforts were made during the Tenth Plan to enable these States to fully achieve their potential.
- The plan laid great emphasis on agriculture since growth in this sector is likely to lead to the widest dissemination of benefits, especially to the rural poor including agricultural labor.
- The growth strategy of the Tenth Plan seeked to ensure the rapid growth of those sectors which are most likely to create high quality employment opportunities. These included such sectors as construction, real estate, and housing, transport, Small Scale Industries, modern retailing, entertainment, IT-enabled services, etc.
- On the eve of the 11th Plan, our economy is in a much stronger position than it was a few Years ago. After slowing down to an average growth rate of about 5.5% in the 9th Plan period (1997 – 98 to 2001 – 02), it has accelerated significantly in recent Years.
- The average growth rate in the last four Years of 10th Plan period (2003 – 04 to 2006 – 07) is likely to be a little over 8%, making the growth rate 7.2% for the entire 10th Plan period. Though, this is below the 10th Plan target of 8%, it is the highest growth rate achieved in any plan period.
- This performance reflects the strength of our economy and the dynamism of the private sector in many areas. Yet, it is also true that economic growth has failed to be sufficiently inclusive, particularly after the mid – 1990s.
- Agriculture lost its growth momentum from that point on and subsequently entered a near crisis situation. Jobs in the organized sector have not increased despite faster growth. The percentage of our population below the poverty line is declining but only at a modest pace.
- Malnutrition levels also appear to be declining, but the magnitude of the problem continues to be very high. Far too many people still lack access to basic services such as health, education, clean drinking water and sanitation facilities without which they cannot claim their share in the benefits of growth.
- Women have increased their participation in the labor force as individuals, but continue to face discrimination and are subject to increasing violence, one stark example of which is the declining child sex ratio.
INDIA’S VISION FOR THE 11TH FIVE YEAR PLAN :
- The 11th Plan provides an opportunity to restructure policies to achieve a new vision based on faster, more broad – based and inclusive growth. It is designed to reduce poverty and focus on bridging the various divides that continue to fragment our society.
- The 11th Plan must aim at putting the economy on a sustainable growth trajectory with a growth rate of approximately 10 per cent by the end of the Plan period. It will create productive employment at a faster pace than before, and target robust agriculture growth at 4% per Year.
- It must seek to reduce disparities across regions and communities by ensuring access to basic physical infrastructure as well as health and education services to all. It must recognize gender as a cross – cutting theme across all sectors and commit to respect and promote the rights of the common person.
- Rapid growth is an essential part of our strategy for two reasons. Firstly, it is only in a rapidly growing economy that we can expect to sufficiently raise the incomes of the mass of our population to bring about a general improvement in living conditions. Secondly, rapid growth is necessary to generate the resources needed to provide basic services to all.
- Work done within the Planning Commission and elsewhere suggests that the economy can accelerate from 8 per cent per Year to an average of around 9% over the 11th Plan period, provided appropriate policies are put in place.
- With population growing at 1.5% per Year, 9% growth in GDP would double the real per capita income in 10 Years. This must be combined with policies that will ensure that this per capita income growth is broad based, benefiting all sections of the population, especially those who have thus far remained deprived.
- A key element of the strategy for inclusive growth must be an all out effort to provide themass of our people the access to basic facilities such as health, education, clean drinking water etc. While in the short run these essential public services impact directly on welfare, in the longer run they determine economic opportunities for the future.
- The private sector, including farming, micro, small and medium enterprises (MSMEs) and the corporate sector, has a critical role to play in achieving the objective of faster and more inclusive growth.
- This sector accounts for 76% of the total investment in the economy and an even larger share in employment and output. MSMEs, in particular, have a vital role in expanding production in a regionally balanced manner and generating widely dispersed off – farm employment. Our policies must aim at creating an environment in which entrepreneurship can flourish at all levels, not just at the top.
- All this is feasible but it is by no means an easy task. Converting potential into reality is a formidable Endeavour and will not be achieved if we simply continue on a business – as – usual basis. There is need for both the Centre and the States to be self critical and evaluate programmes and policies to see what is working and what is not.
MACROECONOMIC INDICATORS FOR THE 11TH FIVE YEAR PLAN
|SI. No.||Macroeconomic Indicators||10th Plan (Actual)*||11th Plan (Average)|
|1.||Growth rate of GDP (%); of which;||7.2||9.0|
|2.||Investment rate (% of GDP)||27.8||35.1|
|3.||Domestic Savings rate (% of GDP) of which||28.2||32.3|
|4.||Current account balance (% of GDP)||0.2||-2.8|
|5.||Government revenue balance (% of GDP)||-4.4||-0.2|
|6.||Government Fiscal balance (% of GDP)||-8.0||-6.0|
|*||1. GDP growth rate is actual up to 2005 – 06 and as estimated by the EAC to PM for 2006 – 07. Savings rate, investment rate and CAB are actual up to 2004 – 05.|
|2. Government Fiscal Balance and Revenue Balance are Based on Actuals (3 Years for Centre and 2 Years for states) and for remaining Years RE / BE / Projected.|
MONITORABLE SOCIO – ECONOMIC TARGETS OF THE 11TH PLAN
Income & Poverty in India
- Accelerate growth rate of GDP from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016 – 17.
- Increase agricultural GDP growth rate to 4% per Year to ensure a broader spread of benefits
- Create 70 million new work opportunities.
- Reduce educated unemployment to below 5%.
- Raise real wage rate of unskilled workers by 20 percent.
- Reduce the headcount ratio of consumption poverty by 10 percentage points.
- Reduce dropout rates of children from elementary school from 52.2% in 2003 – 04 to 20% by 2011 – 12.
- Develop minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality.
- Increase literacy rate for persons of age 7 Years or more to 85%.
- Lower gender gap in literacy to 10 percentage points.
- Increase the percentage of each cohort going t6 higher education from the present 10% to 15% by the end of the 11th Plan.
- Reduce infant mortality rate (IMR) to 28 and maternal mortality ratio (MMR) to 1 per 1000 live births.
- Reduce Total Fertility Rate to 2.1.
- Provide clean drinking water for all by 2009 and ensure that there are no slip – backs by the end of the 11th Plan.
- Reduce malnutrition among children of age group 0 – 3 to half its present level.
- Reduce anemia among women and girls by 50% by the end of the 11th Plan.
Women and Children
- Raise the sex ratio for age group 0 – 6 to 935 by 2011 – 12 and to 950 by 2016 – 17.
- Ensure that at least 33 percent of the direct and indirect beneficiaries of all government schemes are Women and Girl Children.
- Ensure that all children enjoy a safe childhood, without any compulsion to work.
- Ensure Electricity connection to all villages and BPL households by 2009 and round – the – clock power by the end of the Plan.
- Ensure all – weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015.
- Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012.
- Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016 – 17.
- Increase forest and tree cover by 5 percentage points.
- Attain WHO standards of air quality in all major cities by 2011 – 12.
- Treat all urban waste water by 2011 – 12 to clean river waters.
- Increase energy efficiency by 20 percentage points by 2016 – 17.
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