INDIAN ECONOMY : What is the rank of India in economy?
Top 5 rank of India in economy
CHARACTERISTICS OF INDIAN ECONOMY
1. Under-developed Economy It is characterized by
INDIAN ECONOMY High population growth rates Abundant but unutilised natural resources
.Low rate of capital formation
Low standard of living characterized by continuous and sustained efforts to raise it through a proper utilization of available natural, man power, financial and entrepreneurial resources,
2. Mixed Economy
India has a mixed economy because of existence of private and public sector industries makes our economy mixed
⚫ market trends determine production, investment and business dealings in the private sector But marketing mechanism is not completely free from
⚫ existence of the public sector along with free enterprise.
⚫economic planning since Independence gave it the character of a socialistic INDIAN ECONOMY enconomy.
3. Federal Economy
As India has a federal form of government, its financial system is federal • India has a strong Centre from the point of view
(i) Use of powers of concurrent taxation avoided. is (i) Sources of revenue allotted to Centre are
high-yielding and elastic
(i) Money, banking and currency are with the Centre. (iv) Some exclusive sources of revenue are given
to the Centre
Financial powers are divided between Centre and the States efficiently. Three means are used for resource transfer
(i) Grants (iii) Loans
There is flexibility in resource transfer
PLANNING COMMISSION was set up in M
Assessment of material, capital and human resources of the country.
Formulation of plans for the most effective and balanced utilisation of the country’s resources. Definition of stages in which the plan should be carried out.
• Determination of the nature of the machinery necessary for the implementation of the plan in all its aspects.
• Appraisal from time to time of the progress achieved
in the execution of each stage of the plan. • Public co-operation in national development • Perspective planning.
NATIONAL DEVELOPMENT COUNCIL
It comprises Chief Ministers of all the States and is headed by the Prime Minister.
Main functions To prescribe guidelines for the formulation of National Plan, including assessment of resources
for the plan. To consider National Plan as formulated by the
Planning Commission To consider important questions of social and economic policy affecting national developments
To review working of the plan from time to time.
To recommend such measures as are necessary for
achieving aims and targets set out in the National Plan
It includes measures to ()secure active participation and co-operation of
() improve efficiency of the administrative services Tia) ensure fullest development of the less advanced regions and sections of the community through sacrifices borne equally by all the citizens to build
up resources for national development
. FIRST FIVE YEAR PLAN (1951-56)
Highest priority to agriculture
Achieving self-sufficiency in food grains production Rehabilitation of the economy devastated by the
Second world war and partition Building economic overheads and providing appeal justice.
SECOND FIVE YEAR PLAN (1956-61)
Giving a big push to the economy in order to enable
it to take off in the context of economic development
Rapid industrialization with particular emphasis on
the development of basic and heavy industries, an
increase of 25 per cent in national income over the five
year period and large expansion of employment
• Reduction of inequalities in income and wealth and a more even distribution of economic power The plan also aimed at increasing the rate of investment from about seven per cent of the national income to 11 per cent by 1960-61 THIRD FIVE YEAR PLAN (1961-66)
This plan aimed at securing a marked advance towards
self sustaining growth
Objectives INDIAN ECONOMY
To secure an increase in the national income of
over five per cent per annum and at the same time ensure pattern of investment which could sustain this rate of growth during subsequent plan periods To obtain self-sufficiency in production
To expand basic industries like steel, chemicals, fuel and power, etc. To create substantial employment opportunities
To provide greater equality of opportunities and reducing economic disparities.
FOURTH FIVE YEAR PLAN (1969-74) In the last two years
food grains production led to a decline in price
The foreign exchange position improved By 1969, the economy had absorbed the stocks it had
received during the Third Plan.
Fourth Plan was launched in April 1969. Objectives
Progressive achievement of self-reliance
. Growth with justice Balanced regional development
• Providing a minimum nutritional level to the people
FIFTH FIVE YEAR PLAN (1974-79) It was formulated against the backdrop of severe inflationary pressure.
Objectives Removal of poverty and attainment of self-reliance Attaining 5.5 per cent annual growth in GDP
Employment generation National programme for minimum needs, elementary education, drinking water, medical care in rural areas, nutrition, home sites for landless labour, rural roads, rural electrification and slum improvements, etc.
Emphasis on agriculture
• Development of key and basic industries
• Adequate public procurement and distribution system.
Export promotion and import substitution
• Restraint on non-essential consumption and reduction in economic, social and regional inequalities.
SIXTH FIVE YEAR PLAN (1980-85)
This plan was formulated for the period 1978-83 by the Janta Party Government and was referred to as the Rolling plan. But in 1980 when Congress (I) came to power, the new government abandoned the concept and a new Sixth plan was prepared for the period 1980- 85. This plan was conceptualized considering achievements and shortcoming of the past three decades of planning. Removal of poverty was the foremost objective of the plan, even though it was recognized that task of this magnitude could not be accomplished in a short period of five years. Objective
Achieving economic and technological self-reliance
Reducing poverty and unemployment
• Developing indigenous energy sources. Improving quality of life of the poorest through
INDIAN ECONOMY Top 5 rank
Minimum Needs Programme. • Reducing inequalities of income and health through better redistribution.
• Population control.
• Involving sections of people in the process of development. SEVENTH FIVE YEAR PLAN (1985-90)
Basic objectives of this plan was
⚫ social justice
Focus of this plan was on
• Productivity Objectives
• To accelerate growth in food grains production • To increase employment opportunities
• To raise productivity.
EIGHTH FIVE-YEAR PLAN (1992-97)
This plan envisaged an aggregate investment of INDIAN ECONOMY
27,98,000 crore-73,61,000 crore in the public sector, 1.49,000 crore in the private sector and 2,88,000 crore in the household sector. Thus, public sector investment amounted to 45.2 per cent of the total domestic investment, allowing a much higher scope for the private sector than had hitherto been given to it INDIAN ECONOMY