Notes Class 11 Chapter 10 Economics Maharashtra Board

Introduction

Economic planning in India started in 1950 with the establishment of the Planning Commission. The Prime Minister is the Ex-Officio Chairman of this body. The Planning Commission included experts from fields like banking, finance, and industry. Its main job was to create economic plans for the country. In 2015, it was replaced by NITI Aayog.

Key Plans to Know

• Bombay Plan: A plan proposed in 1944 by leading industrialists to promote industrial and economic growth after independence.
• People’s Plan: Focused on agriculture, small-scale industries, and self-reliance, proposed by M.N. Roy in 1944.
• Gandhian Plan: Emphasized rural development, cottage industries, and self-sufficiency, based on Mahatma Gandhi’s principles.

Meaning of Economic Planning

Economic planning is a time-bound program to achieve specific goals using available resources. It is managed by a planning authority (like the Planning Commission or NITI Aayog).

Definitions

• Dr. H. D. Dickinson: Economic planning involves making major decisions about production, allocation, and distribution based on a detailed study of the economy.
• Mrs. Barbara Wooten: Planning is the deliberate choice of economic priorities by a public authority.

Features of Economic Planning

• Central Planning Authority: A body like the Planning Commission or NITI Aayog oversees planning. In India, NITI Aayog replaced the Planning Commission in 2015.
• Survey: A detailed study of human and natural resources is conducted to understand their availability and use.
• Objectives: Plans have clear, realistic, and flexible goals.
• Priorities and Targets: Priorities are set for important sectors, and targets are specific steps to achieve objectives.
• Mobilization of Resources: Funds are raised through taxes, savings, public debt, deficit financing, or foreign aid.
• Plan Period: Plans usually last for five years in India.
• Evaluation: Plans are reviewed (e.g., mid-term appraisals) to make necessary changes.
• Continuous Process: Planning is ongoing to ensure economic development.
• Coordination: The central government and states work together for effective planning.
• Flexibility: Plans can be adjusted based on changing needs.

Five Year Plans (FYP) at a Glance

India’s Five Year Plans started in 1951 to guide economic development. Below is a summary:

Calculation (D6 and D9)

Using the Achievements column:

• D6 (6th term in sequence): Achievements = [3.6, 4.1, 2.7, 3.3, 4.8, 5.7, 6.0, 6.8, 5.6, 7.8, 7.9].
  D6 = 5.7 (6th Five Year Plan achievement).
• D9 (9th term in sequence): D9 = 5.6 (9th Five Year Plan achievement).

12th Five Year Plan (2012-2017)

The 12th Plan focused on Sustainable Growth through agriculture, education, health, and social welfare. It also aimed to boost employment in manufacturing.

Targets

Economic Growth:

• Real GDP growth: 8%.
• Agriculture growth: 4%.
• Manufacturing growth: 10%.
• Every state to achieve higher growth than in the 11th Plan.

Poverty and Employment:

• Reduce poverty by 10%.
• Create 50 million non-farm jobs.

Education:

• Increase average schooling to 7 years.
• Improve access to higher education and skill development.
• Eliminate gender and social gaps in school enrollment.

Health:

• Reduce total fertility rate to 2.1%.
• Cut undernutrition in children (0-3 years) to half of NFHS-3 levels.

Infrastructure:

• Increase investment in infrastructure to 9% of GDP.
• Connect all villages with all-weather roads.
• Achieve 70% rural television and telephone density.

Environment and Sustainability:

Increase green cover by 1 million hectares annually.

Service Delivery:

• Provide banking access to 90% of households.
• Shift subsidies to direct cash transfers using Aadhaar-linked bank accounts.

National Family Health Survey (NFHS)

NFHS is a large-scale survey conducted in India to collect data on health, nutrition, and family welfare. Key levels:

• NFHS-1 (1992-93): Focused on maternal and child health.
• NFHS-2 (1998-99): Added data on reproductive health and domestic violence.
• NFHS-3 (2005-06): Included HIV testing and nutrition data.
• NFHS-4 (2015-16): Provided state and district-level data.
• NFHS-5 (2019-21): Latest survey with updated health and welfare indicators.

NITI Aayog

NITI Aayog (National Institution for Transforming India) was established on January 1, 2015, replacing the Planning Commission. It promotes cooperative federalism by involving states in planning and aims for faster economic growth.

Structure

• Chairperson: Prime Minister of India.
• Vice-Chairperson: Appointed by the Prime Minister.
• Full-Time Members: 5 members.
• Part-Time Members: 2 members.
• Ex-Officio Members: Up to 4 Union Ministers, nominated by the Prime Minister.
• Chief Executive Officer (CEO): Appointed by the Prime Minister, with the rank of Secretary.
• Governing Council: Includes Chief Ministers of all states and Governors of Union Territories.
• Regional Councils: Formed to address specific regional issues.
• Special Invitees: Experts nominated by the Prime Minister.
• Secretariat: As needed.

Functions

• Shared National Agenda: Creates a vision for national development with state involvement.
• States’ Best Friend: Supports states by coordinating with ministries and building capacity.
• Decentralized Planning: Plans from village to national level (bottom-up approach).
• Knowledge and Innovation Hub: Promotes research and best practices in governance.
• Monitoring and Evaluation: Tracks policies and programs for efficiency.
• Cooperative and Competitive Federalism: Encourages states to participate in national policy-making.
• Other Functions: Includes consultancy, conflict resolution, and technological upgrades.

Pillars of NITI Aayog

• Vision Document of India.
• Appraisal of the 12th Five Year Plan.
• Transforming India Lecture Series.
• Doubling Farmers’ Income.
• Outcome Budget and Output-Outcome Framework.
• Global Entrepreneurship Summit 2017.
• Program for Aspirational Districts.

Comparison: Planning Commission vs. NITI Aayog

Union Budget

The Union Budget is the annual financial statement of the government, presented by the Finance Minister in February (shifted to February 1 for early fund allocation). It includes:

Estimated receipts and expenditure for the financial year (April 1 to March 31).
Tax structure changes.
Allocations for defense, education, research, etc.