Under the dynamic leadership of late Prime Minister Jawaharlal Nehru, India has adopted the path of economic planning in order to achieve the goal of rapid economic development. Progress made by the Indian economy during the period of planning, is discussed as under:
Increase in National Income: Increase in national income is an index of economic development. During the period prior to economic planning, national income in India was growing at the rate of just 0.5 per cent per annum. Indian Economy was therefore a stagnant economy. During the period of five year plans, national income has increased at average rate of 4.8% per annum.
Increase in per capita income: Before independence, increase in per capita income was almost negligible; but during the period of planning, it increased at the rate of 2.5% per annum at 1999-2000 prices.
Increase in rate of capital formation: Capital formation plays a very important role in the economic development of a country. During Five year plans, rate of capital formation has increased rapidly. Rate of capital formation depends on the rate of saving and investment.
Institutional Reform in Agriculture and Green Revolution: Contribution of plans in the development of agriculture has been of two kinds: Land reform and Technology development. During the period of plans, production of food grains has increased more than four-fold. In 1951-52, production of food grains was 550 lakh tones. In 2007-08, it is increased to 2,307 lakh tones. During plans agriculture production has increased very much.
Development of Industries: Plans have successes a lot in industrial sector. Basic and capital goods industries like iron and steel, machinery, chemical fertilizers etc. have been developed considerably in the country. Public sector has expanded. Country has become almost self-sufficient in the matter of consumer good industries.
Development of Infrastructure: Economic infrastructure mainly include means of transport and communication, irrigation facilities and power generation capacity. During the planning infrastructure has development considerably.
Increase in Employment: Several measure have been taken to increase employment opportunities during the period of economic planning. Government has launched various employment generation schemes in urban and rural areas.
Development of Science and Technology: During planning period, significant growth of science and technology has been achieved. In the field of information and technology, signification progress has been made.
Structural and Institutional Changes: Many positive structural and institutional changes have been introduced during planning period. It includes expansion of public sector, introduction of price support system, public distribution system, development system of financial institutions etc.
Production according to Needs: Economic planning leads to need-oriented production of goods and services. In economic planning, the planning authority formulates the plan. It coordinates the natural, human and physical resources in such a manner that resources are properly utilized and result in the production according to requirement of the economy.
Balanced economic growth: Economic growth is sought to be achieved in a balanced manner by the planning authority. There are several advantages of balanced growth, such as agriculture development, proper industrialization, reduction in poverty and increase in demand of goods or services of one sector by the persons of other sector, etc.
Others: During the period of planning, social services like education, health and medical etc have also developed appreciably. Death rate in 2006 has come down to 7.5 per thousand as against 40.8 per thousand in 1951. Many dangerous diseases like Polio have nearly been eradicated. A chain of national laboratories and research centers has been established. Number of school going students has increased manifold. Number of collages, universities, professional colleges, management institute has increased significantly.
During the period planning, India has successes in laying the foundation of growth in the field of industries, power generation, multipurpose projects and agricultural production.