.UPSC aspirants need to know the basics of Indian economics. 5 Year plans were the first ones to make way towards Indian development. Though initially they were not very successful. later on the 5 year plans played humongous role in India's development .Syllabus of UPSC GS paper 3 has economics in it. And students should be clear with zIndia;s journey of economic progress. It is also very essential for the students to keep a track of current affairs related to economics. To read more articles on Economics click here


  • Five year plans


  •  Father of Indian Planning: M. Visvesvaraya
  • The first attempt to initiate economic planning in India was made by Sir M. Visvesvaraya, a noted engineer and politician, in 1934 through his book, Planned Economy for India.
  • In 1944, 'Bombay Plan' was presented by 8 leading industrialists of Bombay.
  • In 1945, 'People's Plan' was given by MN Roy.
  • In 1950, 'Sarvodaya Plan' was given by JP Narayan. A few points of this plan were accepted by the Government.
  • The concept of the planning is based on the Russian model initiated by Joseph Stalin.
  • The Planning Commission was set up in 1950 with Jawaharlal Nehru as its first Chairman.
  • — The Planning Commission is only an advisory body according to the 39th article of the Constitution.
  •  The National Development Council (NDC) was set up on August 6, 1952.
  • It gives final approval to plans in The Prime Minister is its chairman.
  • All the Chief Ministers of the States, Governors of Union Territories, all Union Cabinet Ministers and other Planning Commission members are its members.

The First Plan (1951-56)

  • It gave priority to agricultural development.
  • Community Development Programme (CDP) and Family Planning Programme (FPP) were launched in 1952.
  • National Extension Service (NES) was launched in 1953 during the First Five Year Plan period.
  • Important multipurpose projects in India like Bhakra Nangal, Hirakud and Damodar Valley projects were also launched during this Plan period.
  • The First Five Year Plan was a successful one.

The Second Plan (1956-61)

  • The second Five-year Plan functioned on the basis of Mahalanobis model. The Mahalanobis model was propounded by the famous Prasanta Chandra
  • Mahalanobis.
  • It gave priority to industrial development.
  • The three important steel plants of India were built during this Plan period. They are Durgapur (West Bengal) with British help, Bhilai (Chhattisgarh) with Russian help and Rourkela (Orissa) with German help.

The Third Plan (1961-66)

  • It failed because of the Chinese aggression in 1962 and the conflict with Pakistan in 1965.
  •  A plan holiday was declared during 1966-1969 due to the conflict with Pakistan.

The Fourth Plan (1969-74)

  •  It also failed due to the Indo-Pak war of 1971.
  • Growth with stability was the objective of the plan.

The Fifth Plan (1974-79)

  • It is associated with Indira Gandhi's slogan of “Garibi hatao” (remove poverty).
  • Indira Gandhi launched the 20-point programmes during this Plan. Self-sufficiency in food-grains was the major achievement of this Plan.
  • The Plan was terminated in 1978 by the Janata Government, and they started the Rolling Plan.

The Sixth Plan (1980-85)

Elimination of unemployment and poverty was its objective.

The Seventh Plan (1985-90)

  • It also aimed to eliminate poverty and increased employment opportunities and productivity within the framework of basic tenants of planning.
  • The 8th plan would not take off due to fast changing political situation at the centre. So the new government decide that the 8th plan would start in 1992.
  • During 1990-92, two Annual Plans were launched

The Eighth Plan (1992-97)

It proposed a growth rate of 5.6% per annum and the energy sector was accorded top priority in the Plan allocation.

The Ninth Plan (1997-2002)

  • The slogan of this Plan was to achieve growth with equity.
  • It was developed in the context of four important dimensions: Quality of life, generation of productive employment, regional balance and self-reliance.

The Tenth Plan (2002-07)

  • The total outlay envisaged for the 10th Plan was 19,68,815 crore in 2001-02.
  •  The strategy of this Plan was to make India one of the ten fastest growing nations. The main elements in the strategy of the Tenth Plan was to increase the rate of growth of national incomes and per capita income.

The Eleventh Plan (2007-12)

  • The theme of the Plan was ‘towards faster and more inclusive growth’.
  • The main elements in the strategy of the Eleventh Plan are: (i) To achieve rapid growth and to bring general improvement in living conditions of the masses; (ii) To ensure that benefits of growth reach all sections of population, especially rural areas; (iii) Promoting foreign investment for achieving faster growth in the economy.

Twelfth Five-Year Plan

  • The Indian economy on the eve of the 12th plan was characterised by good performance in the Eleventh Plan period. Eleventh Plan had achieved annual growth rate of around 8.1 per cent in GDP, which was the highest growth rate achieved in any Plan period.
  • The duration of the twelfth Five-Year Plan is from 1st April 2012 to 31st March 2017. The slogan of the 12th Plan is ‘Faster, Sustainable and More Inclusive Growth’.
  • The priority areas of this Plan are: agriculture, irrigation, manufacturing, education, health, innovation and infrastructure.

For a long time, there had been a feeling that for a country as diverse and big as India, centralised planning could not work beyond a point due to its one-size-fits-all approach. Therefore, the NDA government has dissolved the Planning Commission which was replaced by the NITI Aayog. Thus, there was no thirteen Five Year Plan, however, the five-year defense plan was made. It is important to note that the documents of the NITI Aayog have no financial role. They are only policy guide maps for the government.

The three-year action plan only provides a broad roadmap to the government and does not outline any schemes or allocations as it has no financial powers. Since it doesn't require approval by the Union Cabinet, its recommendations are not binding on the government.

Economics is one of the most important part of UPSC syllabus. To read more articles on Economics click here