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 Liberalisation, Privatisation ,

Globalisation

  The present process of economic reformswas born out of the crisis in the economy,which climaxed in 1991. The crisis compelledthe government to adopt a new path-breaking economic policy under which aseries of wide-ranging economic reform

measures were initiated with the objective todeal with the crisis and to take the economyon a high-growth path. ajor characteristicsof the crisis situation in 1991-9! were the

following "

THE CRISIS OF JUE !""! #$ ECOO%IC REFOR%S

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Cont&&  # serious $scal crisis in which $scal de$cit reached the level of %.%

percent of &'( in 199)-91.  *nternal debt rose to about +) per cent of &'( with interest

payments draining about 9 per cent of total revenue collection ofthe central &overnment.

  &( growth rate fell to 1. per cent from the peak level of 1).+ percent in 19/-/9 0at 19/)-/1 prices.

  2verall agricultural production, food grain production andindustrial production showed negative growth rates of -!./ percent, -+. per cent and -).1 per cent respectively.

  *n3ation rate based both on '(olesale )rice in*e+ andconsmer )rice in*e+ 0for industrial workers soared high at 1-1 per cent.

  4oreign trade shrunk, imports 0in 5 terms falling by 19. per cent

and exports by 1.+ per cent.  6upee depreciated by !%.7 per cent vis-a-vis 8 dollars.  *n :une 1991, foreign exchange reserves fell to such a low level

that they were barely ade;uate to meet the import re;uirementsof a few weeks.

  on-resident *ndians 06*s were withdrawing then deposits

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Cont&&   The con$dence level of international $nancial

institutions was badly shaken and in just over a

year the creditworthiness rating of the country fellfrom ### lo ==> 0put on credit watch.

   The country was on the verge of defaulting oninternational $nancing obligations and the

situation warranted immediate policy action tosave? the situation. In May 1991, the governmenthad to lease 20 tons of gold out of its stock to theState Bank of India to enable it to sell the gold willrepurchase option after si months! In addition,

"BI #as allo#ed to pledge $% tons of gold to theBank of &ngland to raise a loan of '(00 million!

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Cont&&  #ll these factors culminated in a major economic

crisis in :une 1991. The new govt., which assumed

o@ce in :une 1991, took a series of bold correctivemeasure to control the situation. *t also initiated aseries of long term measures structural reformaimed at boosting e@ciency and productivity of

the economy and putting the economy back onthe path of high and sustained growth with e;uityan social justice. These measures, which havecontinued for more than a decade, and generallyreferred to as the process of economic reforms and

spell the new economic policy.

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*nitiation of Reform Process  ome of the early major steps taken to manage the crisis were the

following "  4iscal correction, aimed at reducing $scal de$cit by about 6s. 7,7))

crore in 1991-9! 0compared to 199)-91.  #nnouncement of ew *ndustry (olicy in :uly 1991 seeking to

deregulated the industry with the object to promote the growth of amore and competitive industrial economy.

  #bolition of industrial licensing for all industrial projects except theindustries of high strategic and environment importance and with high

input content. #bout /) percent of the industries were delicensed.  6T( #ct amended to eliminate the need for prior approval by large

companies for capacity expansion and diversi$cation "  ine areas in basic and core industries reserved for public sector

opened to private sector<  Aimit of foreign e;uity holding raised from ) per cent to +1 per cent in

wide range of priority industries<  4oreign *nvestment (romotion =oard 04*(= established to negotiate

proposals from large international $rms and expedite clearance of t(einvestment proposals<

  6upee devaluation by 1/ per cent during :uly 1-, 1991 supported b-standby credit of 5!. billion from the *4 over a !) months period  

egotiated in 2ctober 1991

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Economic Reforms in In*ia 

%acroeconomic Crisis of t(e Earl- !"".s/T(ree#s)ects 4iscal imbalance

4ragile balance of payments situation

*n3ationary pressures  T(e Crisis %a*e Economic Reforms ecessar- T'o

$istinct Stran*s of Reforms

• I0 %acroeconomic Stabilisation/$eman*0si*e%ana1ement Bontrol of in3ation

4iscal adjustment

=alance of payments adjustments

• IL Strctral #*2stment/S))l-0si*e %ana1ement  Trade and capital 3ows reforms

*ndustrial deregulation

'isinvestment and public enterprise reforms

4inancial sector reforms

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STRUCTUR#L REFOR%S

  Since July 1991 comprehensive liberalisationmeasures have been undertaken to improve thesupply-side of the economy. Among these the moreimportant are :

1  Trade and capital 3ows reforms<

! *ndustrial deregulation< 'isinvestment and public enterprise reforms< and 4inancial sector reforms.

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 Trade and capital 3ows reforms

  ince :uly 1991, the government has introduced aseries of reforms in the trade sector which are likely tohelp integration of the *ndian economy better with therest of the worldC.  Among these reform measuresdevaluation of rupee in July 1991 andsubse!uently its depreciation against thecurrencies of the leading industrialisedcountries introduction of the convertibility ofthe rupee "rst on trade account and then for the

entire current account transactionsliberalisation of import regime substantialreduction in customs tari# rates decanalisationof many items of trade and wide imagingmeasures to give a thrust to e$ports are

important.

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In*strial $ere1lation  Distorically, %ndia&s domestic economic

activities have been sub'ect to a wide arrayof physical controls. %n the industrial sectorsuch controls took various forms: industrial

licensing which regulated entry ande$pansion( reservation of a large number ofindustries for the public sector as a well assmall scale sector( time consuming procedures re!uired for the e$it of industrialunits( and price and distribution controls onvarious industrial products.  :agdish =hagwatiand (adma 'esai have been highly critical of thisregulatory system.+  *sher :. #hluwalia also blamed

the industrial licensing system and bureaucratic

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In*strial $ere1lation   The long time taken by the industrial licensing

authorities to give clearance to the variousproposals made

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public ector 6eforms and'isinvestment

  )he public sector was originally intended to be the engineof self-sustained economic growth. %t was also conceivedhold the commanding heights of the economy and to lead totechnological advance. %n order to ful"ll these roles * +asnecessary for the public sector to generate ade!uateinvestible surpluses. o doubt public sector contributed

signi$cantly to the expansion of the industrial base. *ts role indiversifying the industrial structure has been no less. Dowever, ithas failed to generate su@cient internal resources for its furtherexpansion and, as a result, has now become a major constraint oneconomic growth. 8nder structural reforms, the government hasdecided to give greater managerial autonomy to public enterprisesto enable them to work e@ciently. *n addition to this, two other keyelements of the governmentCs strategy for public enterprise reformare the promotion of increased private sector competition in areaswhere social considerations are not paramount and partialdivestment of e;uity in selected enterprises.

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public ector 6eforms and'isinvestment

  ,!uity amounting to s. 1/09 crore in public sector undertakings was disinvestedto public sector "nancial institutions mutualfunds private corporate and general public

till 002-03. *nitially the government had talkedof apposing of burdensome loss-making (8swhile well performing (8s were to be givenautonomy to enable them to develop as global*ndian multinational corporations. Dowever, thereis virtually no evidence of any such initiative inpractice. )he government policy seems to beentirely limited to selling o# shares of prime4S5s with the aim of bridging budget

de"cits.

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4inancial ector 6eforms  # vibrant, e@cient and competitive $nancial

system is necessary to support the structuralreforms in the real economy. 2ver the years, the*ndian banking and the $nancial system has made

impressive progress in terms of both Egraphicalspread and functional reach. 'espite this gain,there has been a steady erosion of the operationale@ciency F:ie banking system. The Gighth 4ive

 Hear (lan document points out some points.

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4inancial ector 6eforms  # vibrant, e@cient and competitive $nancial system is &)he balance sheet

of the performance of the "nancial sector is thus mi$ed strong inachieving certain socioeconomic goals and in general widening thecredit coverage but weak in viability.62

   The government, therefore, set up a Bommittee on 4inancial ystem 0B4under the chairmanship of . arasimham, )* examine the countryCs$nancial system and its various components and to make recommendationsin respect of the Iuowing"

  4or improving the e@ciency and eJectiveness of the $nancial system, withspecial reference to economy of operations, accountability and pro$tability.

  4or infusing greater competition into the $nancial system so as to enable thebanks and other $nancial institutions to respond more eJectively to thecredit needs of the economy.

 

4or ensuring appropriate and eJective supervision over the various entitiesin the $nancial sector, in particular the commercial banks and term lendinginstitutions.

   The Bommittee was also re;uired to review the existing legislativeframework and to suggest necessary amendments 3T implementing therecommendations.

  to support the structural reforms in the real economy. 2ver the years, the

*ndian banking and the $nancial system has made impressive progress interms of both Egraphical spread and functional reach. 'espite this gain,

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# #PPR#IS#L OF ECOO%ICREFOR%S

  ince :uly 1991 the government has undertaken both stabilisationprogrammes and structural reforms as two components of the economicreform package. There is now considerable evidence to suggest that theavowed objectives ?the stabilisation and structural reform programmeshave been achieved only partly. The annual point to point in3ation me whichwas below ! per cent till the end of ay !))!, rose to as high as 1!.% percent on #ugust 9, !))/. Dowever, m fell subse;uently and was only ).1/per cent on #pril , !))9. #s far as $scal imbalances are concerned, the$scal 8e$cit of the Bentral government which was +.% per cent of &'( in1991-9! declined to !.7 per cent of &'( in !))7-)/. iDowever, it rose to %.!per cent of &'( in !))/-)9 0if bonds issued to oil and fertiliser companiesare also included, the Kgross $scal de$cit for !))/-)9 rises to 7./ per cent of&'(. The most important success has been registered in the external sector

where the stock of foreign exchange reserves 0excluding gold was as highas 5 )9.7 billion as at end -arch !))/. Lhile the import cover of foreignexchange reserves was just !.+ months in 199)-91, it rose to 1. months in!))7-)/. 0Dowever, as a result of economic slowdown in !))/-)9, theforeign exchange reserves declined to 5 !+!.) billion as at end - arch !))9and the import cover of foreign exchange reserves to 1). months in !))/-)9.

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Economic Plannin1 in In*ia

 

4or the smooth functioning of any economy,planning plays an important role. The (lanningBommission has been entrusted with theresponsibility of the creation, development andexecution of *ndiaCs $ve year plans. *ndiaCs $veyear plans are also supervised by the (lanningcommission.

  Burrently, the 1!th 4ive Hear (lan, is underway.Dere is an overview of *ndiaCs 4ive Hear (lans"

5 l 6 "

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!st 5ve -ear )lan6!"7! to!"789:

   The 1st $ve year plan was presented by :awaharlal ehru, who was the(rime inister during that period. *t was formulated for the execution ofvarious plans between 19+1 to 19+%. The (lanning Bommission wasresponsible for working out the plan.

  Ob2ectives of t(e !st 5ve -ear )lan6!"7! to !"8!9:   The primary aim of the 1st $ve year plan was to improve living standards of

the people of *ndia. This could be done by making judicious use of *ndiaCs

natural resources.   The total outlay of the 1st $ve year plan was worth N !,)%9 crore. This

amount was assigned to diJerent sectors which included"O *ndustrial sectorO Gnergy, *rrigationO Transport, Bommunications

O Aand rehabilitationO ocial servicesO 'evelopment of agriculture and communityO iscellaneous issues The target set for the growth in the gross domestic

product was !.1percent every year. *n reality, the actual achieved withregard to gross domestic product was .% percent per annum. This is aclear indication of the success of the 1st $ve year plan.

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 *rin1 t(e tenre of t(e !st 5ve-ear )lan:

O The following *rrigation projects were started during that

period"O ettur 'amO Dirakud 'amO =hakra 'am.O The government had taken steps to rehabilitate the

landless workers, whose main occupation wasagriculture. These workers were also granted fund forexperimenting and undergoing training in agriculturalknow how in various cooperative institutions. oilconservation, was also given considerable importance.

O The *ndian government also made considerable eJort inimproving posts and telegraphs, railway services, roadtracks, civil aviation.

O u@cient fund was also allocated for the industrialsector. *n addition measures were taken for the growthof the small scale industries

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 *rin1 t(e tenre of t(e !st 5ve-ear )lan:

O The following *rrigation projects were started during that

period"O ettur 'amO Dirakud 'amO =hakra 'am.O The government had taken steps to rehabilitate the

landless workers, whose main occupation wasagriculture. These workers were also granted fund forexperimenting and undergoing training in agriculturalknow how in various cooperative institutions. oilconservation, was also given considerable importance.

O The *ndian government also made considerable eJort inimproving posts and telegraphs, railway services, roadtracks, civil aviation.

O u@cient fund was also allocated for the industrialsector. *n addition measures were taken for the growthof the small scale industries

; * Fi l 6!"78 t

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;n* Five -ear )lan6!"78 to!"8!9:

*ndustries got more importance in the !nd $ve year plan. The focus wasmainly on heavy industries. The *ndian government boostedmanufacturing of industrial goods in the country. This was doneprimarily to develop the public sector.

ahalanobis odel" The !nd year $ve year plan, functioned on thebasis of ahalanobis model. The ahalanobis model waspropounded by the famous (rasanta Bhandra ahalanobis in theyear 19+. Dis model addresses diJerent issues pertaining toeconomic development. #ssumptions made by the ahalanobismodel"

#ccording to this model, it is assumed that the economy is closed andhas two segments.

1. egment of consumption goods

!. egment of capital goods.O Bapital goods cannot be moved or are Pnon shiftableQ.O (roduction is at its peak.

; * Fi l 6!"78 t

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;n* Five -ear )lan6!"78 to!"8!9:

O 'epending on the availability of capital goods, investments aredecided upon.

O Bapital is the scarce factor.O Bapital goods production is not in3uenced by consumer goods

production. =y following the ahalanobis model, the thengovernment wanted that there should be

optimum assignment of the fund among the various productivesegments. This was aimed with a view to achieve maximum returnson a long term basis.

#s many as $ve steel plants including the ones in 'urgapur, :amshedpur as well as =hilai were set up as per the !nd $veyear plan. Dydroelectric power plants were formed during the tenureof the !nd $ve year plan. There was considerable increase in

production of coal. The orth eastern part of the country, witnessedincrease in the number of railway tracks.7uring the term of the nd "ve year plan Atomic ,nergy

ommission came into being! The Bommission was established inthe year 19+7. 'uring the same period, Tata *nstitute of 4undamental6esearch was born. The institute conducted several programs to

search for talented individuals. These individuals would eventuallybe absorbed into programs related to nuclear power.

< * 5 l 6!"8! t

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=t( 5ve -ear )lan6!"8" to!">=9:

  1. *ndia had to reform and restructure its expenditure agenda,following the attack on *ndia in the year 19%! and for the second

time in the year 19%+. *ndia had hardly recuperated when it wasstruck by drought. *ndia also had a stint of recession. 'ue torecession, famine and drought, *ndia did not pay much heed tolong term goals.

  *nstead, it responded to the need of the hour. *t started takingmeasures to overcome the crisis.

  !. 4ood grains production increased to bring about self su@ciency inproduction. Lith this attempt, gradually a gap was created betweenthe people of the rural areas and those of the urban areas.

  . The need for foreign reserves was felt. This facilitated growth inexports. *mport substitution drew considerable attention. #ll these

activities widened the industrial platform.

=t( 5ve -ear )lan6!"8" to

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=t( 5ve -ear )lan6!"8" to!">=9:

  4ollowing the th 4ive Hear (lan an alteration in the socio economicstructure of the society was observed.

  *ndiaCs development in every sector takes place through the $ve yearplans which are laid out by the (lanning Bommission. They not onlylay out the plans but also monitor the execution of those plans andmake sure that all the machineries of the Benter and the state workin coordination. The +th 4ive Hear (lan was also developed by the(lanning Bommission. The Bommission has a 'eputy Bhairman andalong with the (rime inister, who acts as the Gx 2@cio Bhairman,the plan is laid out.

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7t( 5ve -ear )lan6!">=0!">"9:  ?ac*ro) of t(e 7t( Five @ear Plan   The world economy was in a troublesome state when the $fth $ve

year plan was chalked out. This had a negative impact on the *ndianeconomy. (rices in the energy

  and food sector skyrocketed and as a conse;uence in3ation becameinevitable. Therefore, the priority in the $fth $ve year plan was givento the food and energy sectors . *n the later stages the increase inthe supply of food grains and the export of minerals and oil reserveearned ;uite a good amount of foreign exchange to the *ndianGconomy

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7t( 5ve -ear )lan6!">=0!">"9:  Contents of t(e 7t( Five @ear Plan   The +th 4ive Hear (lan was laid out during a crisis period to overcome

the impediments posed by the wavering economic condition. The +th4ive Hear (lan was designed in a way to meet the needs of the time.

 The issues that were emphasised were"  O 6educing the discrepancy between the economic development at

the regional, national, international level. *t emphasiRed on puttingthe economic growth at par with each other.

  O *mproving the agricultural condition by implementing land reformmeasures.

  O *mproving the scope of self-employment through a well integratedprogram.

  O 6educing the rate of unemployment both in the urban and the

rural sectors.  O Gncouraging growth of the small scale industries.  O Gnhancing the import substitution in the spheres including

chemicals, paper, mineral and e;uipment industries.  O #pplying policies pertaining to $nance and credit in the industrial

sector. 

O tressed on the importance of a labour intensive productiontechnology in *ndia.

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8t( 5ve -ear )lan6!"A.0!"A79:   The %th 4ive Hear (lan started from 19/) and covered a timespan of

another $ve years that is till 19/+. 'uring this time the (rime

inister was 6ajiv &andhi and hence industrial development was theemphasis of this plan. Dis idea about the betterment of the industrialsector was welcomed by some and opposed by lot others speciallythe communist groups. Gven the workers who were more inclinedtowards the leftist ideology were not much convinced. This sloweddown the pace of progress.

   Transport and Bommunication ystem   The transport and communication system also improved under this

(lan. The ational Dighways were all built during this time. #partfrom the construction of new highways, the condition of the roadswere meliorated. This helped in the betterment of the tra@c system

in *ndia. 'uring this time the *ndian currency was devalued and thisled to a dramatic increase in the number of foreign travelers in *ndiathus helping *ndia to become a tourist destination.

  ew *ntroduction on the Gconomic 4ront

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8t( 5ve -ear )lan6!"A.0!"A79:  Gconomic AiberaliRation was introduced for the $rst time in *ndia

during this period. 6ation shops were closed because government no

more produced articles at a subsidiRed rate. (rice control measureswere no more useful. #s a conse;uence the prices of various goodsincreased leading to growth in the standard of living of the residentsof *ndia.

  easures against (opulation Gxplosion  4amily (lanning was implemented for the $rst time in *ndia. 4amily

(lanning helped to create awareness among the *ndians regardingpopulation. Dowever, this measure to control population was notaccepted across *ndia. *t was readily accepted by the people residingin the developed areas of the country but the mass of the lessdeveloped areas refused to accept the plan and never implemented i

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>t( 5ve -ear )lan6!"A70!"A"9:  ?ac*ro) of t(e >t( Five @ear Plan   The 7th 4ive Hear (lan started oJ on a string ground since the

foundation for economic development was laid by the %th 4ive Hear(lan. The ixth 4ive Hear (lan had already paved the way foreconomic development by increasing the production in theagricultural and industrial sector, curbing the rate of in3ation andmaintaining a balance in the transaction of goods, services andmoney. Therefore, the 7th 4ive Hear (lan had a strong base on whichit could built the superstructure of industrial development for thebetterment of *ndiaCs economic position. This plan strove to achievesocialism and expand the production of energy.

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>t( 5ve -ear )lan6!"A70!"A"9:  Contents of t(e >t( Five @ear Plan   The basic issues on which this plan put stress were"  O *ntroduction and application of modern technology  O :ustice meted out to people from various social stratas  O *mproving the position of the weak in the *ndian society  O 'evelopment of agriculture  O 6educing poverty in *ndia  O #ssuring the essentials of food, shelter and clothing to the people  O triving to achieve independence as per the *ndian economy is

concerned  O Delp the small as well as the large farmers to increase their

productivity This time *ndian government was adamant to achieveself-su@ciency in the economic and production sector. They

endeavored to develop on the factors that ensure a persistentgrowth in the economy. The rate of employment was anticipated torise by every year and the labor force was anticipated to grow by9 million at the end of $fth year.

  2verall improvement was the aim of the 7th 4ive Hear (lan. Thereforecare was taken to establish a harmony in all the sectors that are

contained in an economy.  pecial care was taken to spread education among girls, enhance

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At( 5ve -ear )lan6!"";0!"">9:  /th 4ive Hear (lan commenced on 199! and carried on till 1997. The

basic objective of this period was the moderniRation of industrial

sector. This plan focused on technical development. Through thisplan the reduction of de$cit and foreign debt was aimed at. Therecti$cation of certain 3awed plans and policies were also doneunder this $ve year plan. 'uring this period only *ndia received acoveted opportunity to become a member of the Lorld Trade2rganiRation on :anuary 1st 199+.

  #gricultural #ctivities 'uring this (eriod  #griculture happens to be the largest contributor to the &'( of *ndia.

*n fact two third of the work force was dependent on agriculture.*ndustries also made use of agricultural produce as inputs in theirproduction process.

 

elf-u@ciency in #gricultural (roduction

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At( 5ve -ear )lan6!"";0!"">9:  elf-su@ciency in agricultural production was a top priority during

*ndiaCs eighth 4ive Hear (lan since most of the population depended

on that. (roduction of food increased to 17%.!! million from +1million which was a huge leap in comparison to the previous years.

  6esults show that the /th 4ive Hear (lan had been more successful inthis regard as the de$cit was reduced by ).7 in the /th 4ive Hear(lan and by only ).1 in the 7th

  4ive Hear (lan. Lith regard to domestic savings as a percentage of&'( the /th 4ive Hear (lan reached !. while in the 7th Hear (lanthe $gure was !).!. #s far as the contribution of the exportearnings is concerned the /th Hear (lan contributed 1).1 to the&'( while the 7th Hear (lan contributed 9.9 to the &'(. The importvolume as a percentage of &'( was also more during the /th 4ive

 Hear (lan 01).9 compared to the 7th 4ive Hear (lan 01).. *n anutshell the /th $ve year (lan was more successful in meeting itsobjectives as compared to the previous $ve

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"t( 5ve -ear )lan6!"">0;..;9:  Primar- ob2ectives of t(e "t( Five @ear Plan:  Gach and every 4ive Hear (lan of the *ndian government is

formulated, keeping in mind the ful$llment of certain objectives. The9th 4ive Hear (lan is no exception. The main objective of this (lan isto achieve the following goals"

  O *ndustrialiRation at a rapid pace  O 6eduction in poverty level  O &aining self-su@ciency on local resources  O Bomplete employment for all countrymen  O (rice stabiliRation should be initiated to hasten up the rate of

growth of the *ndian economy  O Bontrol the ever-increasing rate of population  O Breating an independent market, for enhancing private $nancial

investments  O (romotion of social events like conservation of speci$c bene$ts for

special social groups, female empowerment, etc.  O #chieving self su@ciency in food production  O &eneration of e;ual opportunities for employment and taking steps

to reduce poverty

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"t( 5ve -ear )lan6!"">0;..;9:  Aike all other 4ive Hear (lans made so far, the 9th 4ive Hear (lan

01997-!))! is formulated, executed and supervised by the (lanning

Bommission.  *n the inth 4ive Hear (lan period from 1997 to !))!, the recorded

rate of growth was merely +.+. Dowever, this economic growthrate is a percentage point lesser than the &'( growth of %.+targeted during this period.

  Gvolution of the 9th 4ive Hear (lans" ome facts  (assed after +) years of *ndian independence, the 9th 4ive Hear (lan

was formulated to act as a tool for solving the economic and socialproblems existing in the country. The (lan in fact, was born out of thegovernmentUs realiRation that the latent economic reserves of thecountry which were still not explored, should be utiliRed for theoverall development and bene$t of the *ndian economy in thecoming $ve years. Dowever, this could only be done when the *ndiangovernment oJers strong support and priority to the social spheresof the country, focusing especially on the complete elimination ofpoverty.

   Taking into consideration the past weaknesses, the 9th 4ive Hear (lan

endeavored to formulate fresh actions to initiate improvement in theoverall economic and social sectors of the nation. To this eJort, there

!.t( 5ve -ear )lan6;..;0

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!.t( 5ve -ear )lan6;..;0;..>9:

  C(ief Ob2ectives of t(e !.t( Five @ear Plan:  O The Tenth 4ive Hear (lan proposes schooling to be compulsory for

children, by the year !)).  O The mortality rate of children must be reduced to + per 1)))

livings births and !/ per 1))) livings births by !))7 and !)1!respectively

  O #ll main rivers should be cleaned up between !))7 and !)1!  O 6educing the poverty ratio by at least $ve percentage points, by

!))7  O aking provision for useful and lucrative employments to the

population, which are of the best ;ualities  O #ccording to the (lan, it is mandatory that all infants complete at

least $ve years in schools by !))7.  O =y !))7, there should be a decrease in gender discriminations in

the spheres of wage rate and literacy, by a minimum of +)  O Taking up of extensive aJorestation measures, by planting more

trees and enhance the forest and tree areas to !+ by !))7 and by !)1!

  O Gnsuring persistent availability of pure drinking water in the rural

areas of *ndia, even in the remote parts  O The alarming rate at which the *ndian population is growing must

!!t( 5ve -ear )lan6;..>0

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!!t( 5ve -ear )lan6;..>0;.!;9:

  *ndia has emerged as a super power. The transition was not easy.&uidelines for operating the economy was provided by the $ve year

plans.  2wing to *ndiaCs $ve year plans, great advancement has been made

with regard to *ndiaCs national income. ince 19+1, the year whenthe 1st $ve year plan was presented by the then (rime inister

 :awaharlal ehru, *ndia has come a long way. *ndia has taken giantstrides and today it is considered as one of the emerging powers

!;t( 5ve -ear )lan6;.!;0

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!;t( 5ve -ear )lan6;.!;0;.!>9:

   The (lanning Bommission of *ndia posted the draft 'ocument of the1!th 4ive year (lan on its website in the $rst week of 'ecember !)1!

for feedback from the public before it is adopted by the ational'evelopment Bouncil 0'B on !/ 'ecember and declared the 4ive

 Hear (lan for the country from !)1! to !)17. The stated vision of the(lan 'ocument is Pof *ndia moving forward in a way that wouldensure a broad-based improvement in living standards of all sectionsof the people through a growth process which is faster than in thepast, more inclusive and also more environmentally sustainableQ.

 This mantra of Pfaster, sustainable and more inclusive growthQU isindeed ideal and laudable

Smmar-: Five @ear Plans in

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Smmar-: Five @ear Plans inIn*ia

  (lan.docx

http://var/www/apps/conversion/tmp/scratch_7/Plan.docxhttp://var/www/apps/conversion/tmp/scratch_7/Plan.docx

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Gconomic Bycle

   The natural 3uctuation of theeconomy between periods ofexpansion 0growth and contraction

0recession. 4actors such as grossdomestic product 0&'(, interestrates, levels of employment and

consumer spending can help todetermine the current stage of theeconomic cycle.

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Gconomic Bycle

  #ll countries experience regular upsand downs in the growth of output,

 jobs, income and spending. These

3uctuations form what is known asthe economic or business cycle.

http://www.tutor2u.net/blog/index.php/economics/C207/http://www.tutor2u.net/blog/index.php/economics/C207/

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?oom# boom occurs when real national output is rising at a rate faster

than the trend rate of growth. ome of the characteristics of a boom

include"  # fast growth of consm)tion helped by rising real incomes, strong

con$dence and a surge in house prices and other forms of personalwealth

  # pick up in the *eman* for ca)ital 1oo*s as businesses invest in

extra capacity to meet rising demand and to make higher pro$ts  ore jobs and fallin1 nem)lo-ment and higher real 'a1es forpeople in work

  Digh *eman* for im)orts which may cause the economy to run alarger tra*e *e5cit because it cannot supply all of the goods andservices that consumers are buying

  Government ta+ revenes will be rising as people earn and spendmore and companies are making larger pro$ts V this gives thegovernment money to increase spending in priority areas such aseducation, the environment, health and transport

  #n increase in inBationar- )ressres if the economy overheatsand has a positive output gap.

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Slo'*o'n  # slowdown occurs when the rate of

growth decelerates + but nationaloutput is still rising

  *f the economy grows without falling

into recession, this is called a soft0lan*in1.

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Recession  )here is a risk is that productive

capacity in the -. economy could be permanently lost, as temporary /oblosses morph into longterm

unemployment due to /obseekerslosing skills and dropping out of thelabour market 

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Recession  # recession means a fall in the level of

national output i.e. a period when growth isnegative, leading to a contraction inemployment , incomes and pro$ts .

   The simple de$nition"• # fall in real &'( for two consecutive

!uarters i.e. six months   The more detailed de$nition"

• # recession is a signi"cant decline in economicactivity spread across the economy , lastingmore than a few months, normally visible in real&'(, real income, employment, industrialproduction, and wholesale-retail sales.

http://www.tutor2u.net/blog/index.php/economics/C203/http://www.tutor2u.net/blog/index.php/economics/tagged/tag/employment/http://www.tutor2u.net/blog/index.php/economics/tagged/tag/profits/http://www.tutor2u.net/blog/index.php/economics/tagged/tag/profits/http://www.tutor2u.net/blog/index.php/economics/tagged/tag/employment/http://www.tutor2u.net/blog/index.php/economics/C203/

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Recover-  # recovery occurs when real national output picks up from the tro1( reached at

the low point of the recession. 

 The pace of recovery depends on how ;uickly #' starts to rise after a downturn.#nd, the extent to which producers raise output and rebuild their stock levels inanticipation of a rise in demand

   The state of business con$dence plays a key role here. #ny recovery might besubdued if businesses anticipate that a recovery will be temporary or weak in scale.

  # recovery might follow a deliberate attempt to stimulate demand. *n the 8W anumber of strategies have been used to boost con$dence and demand and prevent

the recession turning into a damaging depression"  Buts in interest rates V the policy interest rate fell to ).+ in the #utumn of !))/and they have stayed at this low level ever since 0).+ at the time of writing in#ugust !)1!

  # rise in 1overnment borro'in1 V the budget de$cit  rose above X1+)bn in !))9and government borrowing is likely to remain high for some time to come despiteattempts to cut it

 

# policy of antitative easin1 0YG by the =ank of Gngland to pump more moneyinto the banking system in a bid to increase the supply of loans V now worth morethan X!+ billion.

  # temporary cut in the rate of S#T from 17.+ to 1+ 0now reversed V S#T rose to!) in !)11

   The launch of a car scrap page scheme for older cars worth up to X!))) per car anda consumer subsidy for households replacing their old boilers.

http://www.tutor2u.net/blog/index.php/economics/tagged/tag/budget+deficit/http://www.tutor2u.net/blog/index.php/economics/tagged/tag/budget+deficit/