Q.(a) Describe the performance of Five Year Plans in India.

(a) The Five Year Plans raised income, food output, industry and social services, but poverty, unemployment and inequality remained. (b) The rural economy suffers from over-dependence on agriculture, disguised unemployment, poverty and indebtedness, tiny fragmented holdings, low productivity and weak credit, marketing and infrastructure.

PART (a): Performance of Five Year Plans in India

India adopted economic planning through Five Year Plans, begun in 1951 under the Planning Commission, following the Mahalanobis strategy of stressing heavy industry.

Achievements:

1. Growth of national income and per-capita income — the economy grew steadily over the plan periods.
2. Self-sufficiency in food grains — the Green Revolution made India self-reliant in food.
3. Growth of industry and the public sector — heavy and basic industries (steel, power, machinery) and infrastructure (dams, roads, railways) were built.
4. Development of infrastructure — power, irrigation and transport expanded greatly.
5. Progress in education and health — schools, hospitals and social services expanded, improving human development.
6. Development of science and technology and financial institutions (banks, etc.).

Failures / shortcomings:

1. Persistence of poverty — a large share of people remained below the poverty line.
2. Unemployment — the plans could not solve growing unemployment and disguised unemployment.
3. Inequality — income and wealth inequalities widened.
4. Inflation — prices rose steadily, hurting the poor.
5. Regional imbalances — some regions developed much faster than others.
6. Slow growth in early decades — the so-called "Hindu rate of growth" and inefficiency of some public-sector units.

PART (b): Problems of the Rural Economy

The rural economy, where a majority of Indians live, faces many problems:

1. Over-dependence on agriculture — too many people depend on farming, which is seasonal and monsoon-dependent.
2. Disguised and seasonal unemployment — more workers are engaged in agriculture than are actually needed.
3. Rural poverty — low incomes and low standard of living are widespread. …