Indian Economy, 5th edition (14 page)

The setting up of the NDC can be considered as the step in India towards decentralised planning.

(iii)
In the constitutional design of the federal rigidities it was necessary to provide the whole planning process a unified outlook. The NDC serves the purpose of diluting the autonomous and rigid federal units of the Union of India.
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The basic nature, legal status and other details of the NDC are same except its composition
and functions. It is composed
of all the members of the PC, the Union Cabinet, the Chief Ministers of the States, the Administrators/Lt. Governors of the Union Territories (UTs). The PM, naturally, chairs
its meetings. The cabinet Resolution by which the NDC was set up defines its functions
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which are as under:

(i)
to consider the proposals formulated for Plans at all important stages and accept them;

(ii)
to review the working of the Plans from time to time;

(iii)
to consider the important questions of social and economic policy affecting national development; and

(iv)
to recommend measures for the achievement of the aims and targets set out in the national Plan, including measures to secure the
active participation
and co-operation of the people, improve the efficiency of the administrative services, ensure the fullest development of the less advanced regions and backward sections of the community and through sacrifices borne equally by all citizens, build up resources for national development.
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Though the first Plan of India was launched before the arrival of the NDC, the body had many meetings before the terminal year of the plan and useful deliberations (almost all) after due consideration were included by the Government into the planning process. But after the death of J.L. Nehru—the greatest champion of the democratic decentralisation in the country
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the NDC had become a small gathering of only those who had the same vested interests with only the Congress CMs participating in its meetings. The CMs belonging to other political parties usually did not come to its meetings the Government hardly gave any importance to their advice. A phase of tussle between the centre and the states started worsening from here onward with a degradation in principles of the
co-
operative federalism,
with every five-year plan which followed. It was only by the mid-1990s that we see the revival of the lost glory of NDC as well as that of the spirit of decentralised planning. This has been possible due to three major reasons:

(i)
In the era of the economic reforms, with greater dependence on the private capital made it necessary to allow states greater autonomy in economic matters. Once the WTO regime started it became an economic compulsion.

(ii)
The enactment of the Constitutional Amendments 73
rd
and the 74
th
had made local level planning a constitutional compulsion.

(iii)
And lastly it was the compulsion of coalition politics in the formation of the Union Governments which made the centre to favour the states.

As per the major experts on the issue of decentralised planning, the last of the above given three reasons has played the most important role. After a long-long time, two plans (
the Tenth and the Eleventh
) were passed by the NDC with complete support coming from the CMs.

It is believed that as the local-level planning (i.e. the gram panchayat and the urban municipalities and corporations) allows more and more scope of planning by the states, the NDC will be able to function on its more original principles. The contemporary concerns of the Governments give enough hope to think like this, at least it seems so.

CENTRAL PLANNING

The Plans which are formulated by the Central Government and financed by it for the implementation at the national level are known as Central Plans. Over the years, the Centre has launched three such plans and the Governments have maintained continuity in their implementation. The three central plans are:

A. Five-Year Plans,

B. Twenty-Point Programme, and

C. Member of Parliament Local Area Development Scheme.

An introductory description of these plans is given as follows:

A. The Five-Year Plans

This is the most important among the central plans and is being continuously implemented one after the other since planning commenced in India. As planning has been a purely political excercise in India, the Five-Year Plans of the country have seen many unstable and critical moments till date. Several new developments related to planning also took place during the years. Given below is a concise summary of the Plans as we see their different periods of implementation:

First Plan:

The period for this plan was 1951–56. As the economy was facing the problem of large-scale foodgrains import (1951) and the pressure of price rise, the plan accorded the highest priority to agriculture including irrigation and power projects. About 44.6 per cent of the plan outlay went in favour of the public sector undertakings (PSUs).

The Plan was launched with all the lofty ideas of socio-economic development which had frustrating outcomes in the following years.

Second Plan:

The plan period was 1956–61. The strategy of growth laid emphasis on rapid industrialisation with a focus on heavy industries and capital goods.
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The plan was developed by Professor Mahalanobis. Due to the assumption of a closed economy, shortages of food and capital were felt during this Plan.

Third Plan:

The Plan period was 1961–65. The Plan specifically incorporated the development of agriculture
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as one of the objectives of planning in India besides for first time
considering the aim of balanced, regional development.

Enough misfortunes a waited this plan—two wars, one with China in 1961–62 and the other with Pakistan in 1965–66 along the Gujarat border and a severe drought-led famine in 1965–66 had to be faced. Due to heavy drain and diversion of funds, this plan utterly failed to meet its targets.

Three Annual Plans:

The period of the three consecutive Annual Plans was 1966–69. Though the Fourth Plan was ready for its implementation in 1966, the weak financial situation as well as the low morale after the defeat by China, the Government decided to go for an Anuual Plan for 1966–67. Due to the same reasons the Government went for another two such plans in the forthcoming years. The broader objectives of these Annual Plans were inside the design of the Fourth Plan which would have been implemented for the period 1966–71 had the financial conditions not worsened by then.

Some economists as well as the opposition in the Parliament called this period as a discontinuity
in the planning process, as the Plans were supposed to be for a period of five years. They named it a period of “Plan Holiday”, i.e. the planning was on a holiday.
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Fourth Plan:

The Plan period was 1969–74. The Plan was based on the Gadgil strategy with special focus to the ideas of growth with stability and progress towards self-reliance.
Droughts and the Indo-Pak War of 1971–72 led the economy to capital diversions creating financial crunch for the Plan.

The politicisation of planning started from this plan which takes serious ‘populist’ design in the coming plans. Frequent double-digit inflations, unreigned increase in the fiscal deficits, subsidy-induced higher non-plan expenditures and the first move in the direction of ‘nationalisation’ and greater control and regulation of the economy were some of the salient features of this plan which continued unchanged till the early 1990s. The search for political stability at the centre converted planning into a tool of real politics with greater and greater ‘centralisation’ ensuing plan after plan.

Fifth Plan:

The Plan (1974–79) has its focus on poverty
alleviation and self-reliance
.
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The popular rhetoric of poverty alleviation was sensationalised by the Government to the extent of launching a fresh plan i.e the Twenty-point Programme (1975) with a marginal importance being given to the objective of ‘growth with stability’ (one of the major objectives of the Fourth Plan).

The planning process got more politicised. The havocs of hyper-inflation led the Government to hand over a new function to the Reserve Bank of India to stabilise the inflation (the function which the RBI carries forward even today). A judicious price wage policy was started to check the menace of inflation on the wage-earners. This Plan saw an increase in the socio-economic and regional disparities despite the many institutional, financial and other measures which were initiated by the Government to attend them. The nationalisation policy continued. There was an overall decay in the quality of ‘governance’. A nexus of the ‘criminal-politician-bureaucrat’ seems to emerge for the first time to hijack the political system.
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The plan period was badly disturbed by the draconian emergency and a change of the government in the centre. The Janata Party came to power with a thumping victory in 1977. As the government of the time had then complete say in the central planning in India how could the new Government continue with the Fifth Plan of the last Government which had still more than one year to reach its completion. The dramatic events related to Indian planning may be seen objectively as given below:

(i)
The Janata Government did cut-short the Fifth Plan one year ahead of its terminal year i.e. by the fiscal 1977–78. in place of the decided 1978–79.

(ii)
A fresh Plan, the Sixth Plan for the period 1978–83 was launched by the new Government which called it the
‘Rolling Plan’.
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(iii)
In 1980, there was again a change of government at the centre with the return of the Congress which abandoned the Sixth Plan of the Janata Government in the year 1980 itself.

(iv)
The new Government launched a fresh new
Sixth Plan
for the period 1980–85. But by that time, two financial years of the Janata Government’s Sixth Plan had already been completed. These two years of the Plan were adjusted by the Congress Government in a highly interesting way:

(a)
The first year i.e 1978–79 was added to the fifth plan which was cut-short by the Janata Government to four years. And thus the Fifth Plan officially became of 5 years again (1974–79).

(b)
Now what to do with the second year i.e. 1979–80. The Congress Government announced this year to be a year of one Annual Plan. This Annual Plan (1979–80) may be considered the lone independent remnant of the ‘Rolling Plan’
of the Janata Government.

The Sixth Plan
(1978–83) which could not become an official plan of India had emphasis on some of the highly new economic ideas and ideals with almost a complete no to foreign investment; new thrust on the price control; rejuvenation of the Public Distribution System (PDS); emphasis on small scale and the cottage industries; new lease of life to the Panchayati Raj Institutions (i.e. the 2
nd
Phase of the frevival of the PRIs); agriculture and the subject of rural development getting the due; etc. being the major ones.

Sixth Plan

This Plan (1980–85) was launched with the slogan of ‘
Garibi Hatao
’ (alleviate poverty).
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Already, a programme (the TPP) was tested and tried by the same Government in the Fifth Plan which tried to improve the standard of living of the poor masses with the ‘direct approach’ (the idea of poverty alleviation but such a slogan of ‘
Garibi Hatao
’ was not given to the programme).

Some of the major issues addressed by the Plan were—emphasis on socioeconomic infrastructure in the rural areas; eliminating rural poverty and reducing regional disparities through the IRDP (1979); ‘target group’
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approach initiated; a number of national level programmes and schemes were launched during the plan which tried to attend to the specific areas and the specific concerns of socioeconomic development (this is ‘target group’ approach):
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•
National Rural Employment Programme (NREP)—1980

•
Restructured Twenty-Point Programme–1982

•
Biogas Programme—1982

•
Development of women and children in Rural Areas (DWERA)—1983

•
Rural Landless Employment Guarantee Programme (RLEGP)—1983

•
Self-Employment to Educated Unemployed
y
outh Programme (SEEUP)—1983

•
Dairy Development Programme (DDP)—1983

•
Village and Small Industries Development Programme (VSIDP)—1983

•
Tribal Development Agency (TDA)—1983

•
Village and Small Industries Development Programme (VSIDP)—1983.

•
Tribal Development Agency (TDA)—1983.

•
National Seeds Programme (NSP)—1983.

•
Intensive Pulses Development Programme (IPDP)—1983.

•
Intensive Cotton Development Programme (ICDP)—1983.

•
Khadi and Village Industries Programme (KVIP)—1983

•
Programme for Depressed Areas (PDA)—1983.

•
Special Programme for Women and Children (SPWC)—1983

Seventh Plan:

The Plan (1985–90) emphasised on rapid foodgrain production, increased employment creation and productivity in general. The basic tenets of planning i.e.
growth, modernisation, self-reliance
and
social justice
remained as the guiding principles.
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The
Jawahar Rojgar Yojana
(JRY) was launched in 1989 with the motive to create wage-employment for the rural poors. Some of the already existing programmes such as the IRDP, CADP, DPAP and the DDP were re-oriented.