Posted by Anjali Kaur on May 09, 2020

What are the goals of five-year plans?

A rational human being will always plan for the future beforehand, take the example of the current ‘Covid-19’ situation. People have started hoarding grocery and essential items for several months. People are aiming for growth in terms of their career, they are trying to be innovative by hoarding goods, they want to be self-reliant by seeking the passive source of income and at the same time not fulfilling the objective of equity; which means, not everyone is considering the needs of their fellow beings. Although all this seems doable at the individual level, from a macro point of view it requires more effort and persistence.

At the Economy level, the goals of five-year plans of any economy comprise of Growth, Modernization, Self-reliance, and Equity. Due to limitations on the available resources, a choice has to be made in each plan about which of the goal is to be given primary importance.

  1. Growth: It refers to the increase in the country’s capacity to produce the output of goods and services domestically. A good indicator of economic growth is the steady increase in the GDP (GDP is the market value of all the goods and services produced in the country during a year). The GDP of a country is derived from the different sectors of the economy, namely; the agricultural sector, the industrial sector, and the service sector. The composition made by each of these sectors makes up the structural composition of the economy.
  2. Modernization: To increase the production of goods and services the producers have to adopt new technology. For example, a factory can increase output by using a new type of machine. Adoption of new technology is termed as modernization. Modernization does not refer only to the use of new technology but also to changes in social outlook such as recognition, that women should have the same rights as men.
  3. Self-Reliance: The first seven five year plans gave importance to self-reliance which means, avoiding imports of those goods which could be produced in India itself. This policy was considered a necessity in order to reduce our dependence on foreign countries, especially for food. It was feared that dependence on imported food supplies, foreign technology, and foreign capital may make India’s sovereignty vulnerable to foreign interference in our policies.
  4. Equity: Equity means, economic development is shared by all citizens to promote social justice. It is important to ensure that the benefits of economic prosperity reach the poor sections as well, instead of being enjoyed only by the rich. Every Indian should be able to meet his or her basic needs such as food, house, education, and health care. Inequalities in the distribution of wealth should be reduced.

Read more about the economic planning in India.

Photo by Markus Winkler on Unsplash

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