9th JULY 1951 FIRST FIVE YEAR PLAN IN INDIA DECLARED

INTRODUCTION

The Planning Commission was set up in March, 1950 by a Resolution of the Government of India which defined the scope of its work in the following terms :

“The Constitution of India has guaranteed certain Fundamental Rights to the citizens of India and enunciated certain Directive Principles of State Policy, in particular, that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life, and shall direct its policy towards securing, among other things,-

(a) that the citizens, men and women equally, have the right to an adequate means of livelihood ;

(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good ; and

(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.

Having regard to these rights and in furtherance of these principles as well as of the declared objective of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community.

The Planning Commission will-

(1) make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nation’s requirements ;

(2) formulate a Plan for the most effective and balanced utilisation of the country’s resources ;

(3) on a determination of priorities define the stages in which the Plan should be carried out and propose the allocation of resources for the due completion of each stage ;

(4) indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation, should be established for the successful execution of the Plan ;

(5) determine the nature of the machinery which will be necessary for securing the successful implementation of each stage of the Plan in an its aspects ;

(6) appraise from time to time the progress achieved in the execution of each stage of the Plan and recommend the adjustments of policy and measures that such appraisal may show to be necessary ; and

(7) make such interim or ancillary recommendations as appear to it to be appropriate either for facilitating the discharge of the duties assigned to it ; or, on a consideration of the prevailing economic conditions, current policies, measures and development programmes ; or on an examination of such specific problems as may be referred to it for advice by Central or State Govern- ments.”

2

THE FIRST FIVE YEAR PLAN

2. In July, 1951 the Planning Commission presented a draft outline of a plan of development for the period of five years from April, 1951 to March, 1956. The Plan included a number of development projects which had been already taken in hand as well as others which had not yet been begun. The Draft Plan was divided into two parts, the first involving an expenditure of Rs. 1,493 crores and consisting largely of projects in execution which were to be implemented in any case, and the second proposing an outlay of Rs. 300 crores which was to be undertaken if external assistance were available. While the execution of development schemes which had been included in the plan after consultation with the Central Ministries and the State Governments was not to be affected, the Draft Outline was addressed to the country for general discussion and comment in the following words :

“Planning in a democratic State is a social process in which, in some part, every citizen should have the opportunity to participate. To set the patterns of future development is a task of such magnitude and significance that it should embody the impact of public opinion and the needs of the community. We have, there- fore, felt it necessary, before presenting our proposals in complete detail, to offer a Draft Outline of the Plan. The Draft is intended to be a document for the widest possible public discussion. We hope to have further consultations with the Central Ministries, State Governments and our own Advisory Board and Panels, and also to obtain the views of Members of Parliament before we finalise the Plan.”

3. Since its publication, the Draft Outline has been examined in detail by the Central Government and the State Governments. It has been discussed in Parliament and most of the Legislatures in the States. A large number of organisations representing industry, commerce, labour, farmers and other interests have expressed their views. At the request of the Planning Commission, many educational institutions set up seminars of teachers and students to study the plan and send their comments to the Commission. Many district boards and municipal committees also commented on the Plan. In every district groups of officials and non-officials met together to study the Plan in relation to their local problems. Ever since its publication the Draft Outline has been a subject of extensive comment in the daily press and in periodicals. A considerable volume of literature in the form of books and pamphlets prepared by independent writers has also become available. Thus, as a result of the discussion which has taken place, every aspect of the proposals in the Draft Outline has been subjected to the fullest possible examination.

4. The Planning Commission has endeavoured to make a careful study of the material which has been received during the past eighteen months. It has had the opportunity also of working out details of many projects and pursuing As own studies in different fields. In each sphere of national development the Commission has conferred with the Central and State Governments and their experts as well as with men and women of knowledge and experience outside the Government. The Commission also consulted its Advisory Board and some of its Panels. Recently, the Commission has held consultations with representatives of the principal political parties, leading women workers and some members of Parliament.

5. In its final form, the Five Year Plan no longer consists of two parts and the various programmes have been brought together into a single plan. The Five Year Plan, which relates to the same period as in the Draft Outline, is now estimated to involve a total outlay

3

INTRODUCTION

of Rs. 2069 crores. The broad allocation of resources between the main heads of development in the Plan as compared to that indicated in the Draft Outline is as follows :-

                                                               (Rs. crores)
        
                                      Outlay    during       Percentage of
                                           1951-1956         total outlay
        
                                      Five           Draft     Five    Draft
                                      Year           Outline   Year    Outline
                                      Plan                     Plan
        
        Agriculture and Community         
        Development         .    .   360.43     191.69         17.4    12.8
        
        Irrigation and Power     .   561.41     450.36         27.2    30.2
        
        Transport and Communica-
        tions        . .    .    .   497.10     388.12         24.0    26.1
        
        Industry       .    .    .   173.04      100.99          8.4     6.7
        
        Social Services     .    .   339.81     254.22         16.4    17.0
        
        Rehabilitation .    .    .    85.00      79.00          4.1     5.3
        
        Miscellaneous       .    .    51.99      28.54          2.5     1.9
        
                            TOTAL . 2068.78    1492.92        100.0   100.0      

6. All the development projects included in the Draft Outline are of course included in the Plan as it has been now prepared and, as mentioned earlier, many of them are in progress. A number of additions and changes in presentation have been made. The principal changes made in the Plan as compared to the Draft Outline are explained, however, by the attempt to strengthen the Plan, with due regard to the resources which could be foreseen, at those points at which it was felt that the earlier proposals fell short of the needs of the country. In the field of agriculture and community development, for instance, additional programmes have been introduced with a view to ensuring that the targets of agricultural production will be reached. These include a provision of Rs. go crores for community development projects, Rs. 30 crores for additional minor irrigation programmes and provision for the establishment of a national extension organisation. Among other urgent problems for which provision has been made may be mentioned soil conservation, resettlement schemes for landless agricultural workers, and training and experiments in co-operative organisation. In the field of irrigation and power development, in addition to providing for projects already in hand, funds have been allocated for undertaking certain new river valley schemes which are considered vital for the development of large regions served by them. To keep pace with progress in other sectors of the economy, especially in industry and irrigation and power, increased provision has been made for railways, roads, civil aviation, posts and telegraphs and ports. Programmes for major ports which did not find a place in the Draft Outline have now been included in the Plan.

7. In the Draft Outline, owing to the greater urgency of the programmes for agriculture and irrigation, the provision made for the development of industry in the public sector was insufficient. In the Plan as now presented, in addition to providing for an integrated steel plant, Rs. 50 crores have been allocated for further expansion of basic industries,

4

THE FIRST FIVE YEAR PLAN

including manufacture of heavy electrical equipment and fertilisers, and for increased transport facilities required for industry and mineral development. Village industries, smallscale industries and handicraft, whose importance for the economy as a whole can scarcely be exaggerated, have been given greater emphasis in the Plan. In addition to the setting up of new boards for khadi and village industries and for handicrafts, the imposition of a cess on millmade cloth to assist the development of khadi and handloom, and measures taken for the reservation of certain lines of production in favour of the handloom industry, the Central Government’s plan provides Rs. 15 crores for cottage and small-scale industries.

8. In the field of social services also, the Plan has several important programmes. These include a national malaria control scheme estimated to cost Rs. 10 crores, increased provision for scheduled tribes and scheduled areas and for scheduled castes and other backward classes, including criminal tribes, a programme for industrial housing costing about Rs. 49 crores, increased allocation for technical education and provision for youth camps and labour service for students. Provision is also made for carrying forward the rehabilitation of displaced persons from West Pakistan and it has been made clear that if circumstances so warrant it will be necessary to provide larger funds for the rehabilitation of displaced persons from East Pakistan.

9. In three other directions important additions have been made. In order to avoid adverse effects on the implementation of the Plan in the States on account of monsoon failures which occur from time to time in different parts of the country, a provision of Rs. 15 crores for assistance to scarcity-affected areas has been made in the Central Government’s plan. Secondly, each State plan is being broken up into plans for districts and sub-divisions of districts so that these may be further supplemented through the effort and co-operation of the local people. In the nature of things, State plans cannot provide for all the possible needs of the people and it is necessary both to integrate them with the programmes of district boards and municipalities and to add to them other local programmes designed to meet the felt needs of the people. In addition, to assist local works to which the people themselves contribute in labour and otherwise, the Plan allocates a sum of Rs. 15 crores over the next three years. Finally, a national plan which embraces both the public and the private sectors may yet be incomplete unless the enthusiasm and support of large numbers of voluntary organisations and voluntary workers engaged in constructive work can be harnessed for national development. To provide an increasing field of work for the people’s sector, as it were, the Plan provides a sum of Rs. 4 crores to be utilised for assistance to voluntary social welfare organisations at the instance of a social welfare board to which a great deal of administrative authority may be devolved. A word may also be added about the provision of Rs. 50 lakhs node in the Plan for research and investigation into social, economic and administrative problems relating to national development. In many fields sufficient data are wanting to enable policies to be formulated. It is proposed, therefore, to organise, in co-operation with universities and other institutions, special investigations into selected problems of development.

5

INTRODUCTION

10. Besides the plan for the public sector, the Planning Commission has formulated development programmes for forty-two industries in the private sector. These programmes have been prepared in co-operation with the Ministry of Commerce and Industry and after full discussion with representatives of individual industries. The programmes for industrial development have been indicated briefly in this report and are to be presented in a separate volume.

11. This report on the Five Year Plan sets out the programmes of development and also outlines general proposals and policies in each field of development. The report is divided into three parts. The first part contains an analysis of the process of development in an under-developed economy and indicates the long-term goals towards which national effort is to be directed. The objectives, priorities and techniques of planning are set out at some length and an assessment is made about the resources which have to be mobilised in order to carry out the Plan. The first part of the report concludes with a summary statement of the Five Year Plan and of what is sought to be achieved through it. The second part of the report is concerned with administration and public co-operation. Several suggestions are offered for the reform of public administration. On the question of administration of development programmes at the district level, where vital nation-building work is undertaken and the participation of the people is all-important, a number of proposals are offered for consideration and action on the part of State Governments and other authorities. This, portion of the report closes with the consideration of the problems of public co-operation in national development, a theme which, because of its high importance and urgency, recurs throughout the report. In the third part of the report, we outline the various programmes of development. These are grouped under three broad heads, namely, agriculture, irrigation and community development ; industry and communications ; and social services and employment. Each aspect of development is taken up in turn, needs and resources assessed and the Commission’s own proposals for policy and action presented. In a separate volume, details are given concerning the principal development schemes included in the Five Year Plan.

12. Important questions of policy relating, for instance to the land problem the food problem provision of finance for agriculture, common production programmes for small-scale and large-scale industries selection irrigation and power schemes and conservation of mineral resources have been under close examination in the Planning Commission. In making its recommendations the Commission is conscious that the framing of social and economic policies in different fields is a continuous process and that within the framework of priorities and objective nor formulated such changes as may be necessary in the interest of national development will be made as further experience is gained and ideas are tested in practice. In the field of policy the Central State Governments have to act in close co-operation with one another. Such co-operation will be greatly facilitated as a result of the setting up in August, 1952 of the National Development. Council which includes the prime Minister of India and the Chief Ministers of all States.

6

THE FIRST FIVE YEAR PLAN

13. The fulfilment of the Five Year Plan calls for nation-wide co-operation in the tasks of development between the Central Government and the States, the States and the local authorities, with voluntary social service agencies engaged in constructive work, between the administration and the people as well as among the people themselves. Although several programmes included in the Plan are already under way, it is important that, through sacrifice borne equally by all citizens, the effort and resources of the entire nation should be mobilised in support of the Plan so that, during the coming years, the tempo of development can be greatly increased and the Plan becomes a focus of intense activity and a field of common endeavour throughout the country.

PART ONE

THE PLAN

    
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