The Planning Commission was set up in March, 1950 by a Resolution of the Government of India. The economy of India is based on planning through its five-year plans. Five year plans are developed, executed and monitored by the Planning Commission (Prime Minister is the ex-official Chairman). Now the planning commission is being replaced by the NITI Ayog (National Institution for Transforming India). Till date 12 five year plans have been launched by the planning Commission. The final approval to any five year plan is given by the National Development Council (NDC).
Eighth Five-Year Plan (1992–1997)
Time of 1989–91 was of political chaos that leads to economic instability in India and hence no five-year plan was implemented. Between 1990 and 1992, there were only Annual Plans. In 1991, India faced a crisis in Foreign Exchange (Forex) reserves, left with reserves of only about US$1 billion. Thus, under pressure, the country took the risk of reforming the socialist economy. P.V. Narasimha Rao was the twelfth Prime Minister of the Republic of India and head of Congress Party, and led one of the most important administrations in India's modern history overseeing a major economic transformation and several incidents affecting national security. At that time Dr. Manmohan Singh (currently, Prime Minister of India) launched India's free market reforms that brought the nearly bankrupt nation back from the edge. It was the beginning of privatisation and liberalisation in India.
Modernization of industries was a major highlight of the Eighth Plan. Under this plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt. Meanwhile India became a member of the World Trade Organization on 1 January 1995.This plan can be termed as Rao and Manmohan model of Economic development.
An average annual growth rate of 6.78% against the target 5.6% was achieved.
Ninth Five-Year Plan (1997–2002)
Ninth Five Year Plan India runs through the period from 1997 to 2002 with the main aim of attaining objectives like speedy industrialization, human development, full-scale employment, poverty reduction, and self-reliance on domestic resources.
During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the target GDP growth of 6.5 per cent.
Tenth Five-Year Plan (2002–2007)
Target growth: 8% Growth achieved: 7.8%
Eleventh Five-Year Plan (2007–2012)
The eleventh plan has the following objectives:
Income & Poverty
Women and Children
Target growth: 8.4% Growth achieved: 7.9%.
Twelfth Five-Year Plan (2012-2017)
The 12th five year plan (2012-17) document that seeks to achieve annual average economic growth rate of 8.2 per cent, down from 9 per cent envisaged earlier, in view of fragile global recovery. 12th five-year plan is guided by the policy guidelines and principles to revive the following Indian economy, which registered a growth rate of meagre 5.5 percent in the first quarter of the financial year 2012-13.
The plan aims towards the betterment of the infrastructural projects of the nation avoiding all types of bottlenecks. The document presented by the planning commission is aimed to attract private investments of up to US$1 trillion in the infrastructural growth in the 12th five-year plan, which will also ensure a reduction in subsidy burden of the government to 1.5 percent from 2 percent of the GDP (gross domestic product). The UID (Unique Identification Number) will act as a platform for cash transfer of the subsidies in the plan.
The plan aims towards achieving a growth of 4 percent in agriculture and to reduce poverty by 10 percentage points by 2017. The main aim of this plan is to achieve Faster, More Inclusive and Sustainable Growth.