Question

How are national incomeestimates used as an indicator of success or failure of planning

Answer 1

Answer:

Explanation:

India has completed about six decades (1951-2008) of planning. During the Plan Period it has achieved success in some directions and failed in other areas. So, India’s experience during the Plan Period presents a mixed picture. Here, we present a broad overview of the success and failure of planning.

1. Achievements of Planning:

(i) Increase in National and Per Capita Incomes:

One of the basic objectives of economic planning in India is to increase national and per capita incomes. As a direct consequence of economic planning, India’s national and per capita income rose, though not as rapidly as the Plans projected. National income at 1999-2000 prices rose from Rs. 224,786 crores in 1950-51 to Rs. 3,114,452 crores in 2006-07, sharing a CARG of 4.8%.

On the other hand, the per capita income in real terms had increased at a much lower rate indicating that part of the increase in real national income had been eaten up by the growing population. During the same period PCI increased from Rs. 5,752 to Rs. 22,239, showing a CARG of 2.5%. There was quite some fluctuation in the growth rates over the entire Plan Period. This means that India did not achieve steady growth.

(ii) Progress in Agriculture:

During the 55 years (1950-51 to 2005-06) the Government had spent, on an average, 23 to 24 per cent of the Plan outlay in each of the Five Year Plans on the development of agriculture, allied activities and irrigation. This expenditure was in addition to the private sector investment on agriculture and minor irrigation. As a direct result of this Plan outlay, agricultural production increased steadily, though not to the extent planned by the Government.