History of Planning and Five Year Plan  in India :

After Independence, Indian economy was in a poor condition. For a new nation, every sector was to be strengthened from the base thereby strengthening the economy. For all this to happen a consolidated planning was required. So, the government of India constituted an institution called PLANNING COMMISSION in 1950 (Planning commission was replaced by NITI AAYOG in 2014).

The duty of this planning commission is to formulate plans for the effective utilization of country’s resources and it started implementing five- year plans from 1951. The planning commission from its inception in 1951 till its end in 2014 had formulated 12 five year plans.

FIVE YEAR PLANS OF INDIA:

The five-year plans were the set of programmes to be implemented in a five-year term focussing on the problems (or) the sectors which needed attention at that time.

FIRST FIVE YEAR PLAN (1951-56):

In the first five year plan, Government emphasised mainly on agricultural sector.All the sectors were controlled by the government and private sectors had a very minimal role. The plan was successful yielding good results.

Target growth rate: 2.1%                            Achieved growth rate: 3.6%

SECOND FIVE YEAR PLAN (1956-61):

The second five year plan was based on MAHALANOBIS STRATEGY, which emphasised promotion of heavy industries under Government leader ship and generated revenue will be used for agriculture. Meagre results were attained here.

Target growth rate: 4.5%                             Achieved growth rate: 4.1%

THIRD FIVE YEAR PLAN (1961-66):

The third five year plan followed inward oriented policy with minimised imports, imposing high import tariffs. The plan failed here resulting drastic downfall of growth rate.

Target growth rate: 5.5%                                Achieved growth rate: 2.5%

FOURTH FIVE YEAR PLAN (1969-74):

The fourth five year plan emphasised on agriculture and food security was its primary goal. It also emphasised on social justice by providing education and employment to under privileged classes. Still the results are not satisfactory.

Target growth rate: 5.7%                                     Achieved growth rate: 3.3%

FIFTH FIVE YEAR PLAN (1974-79):

In the fifth five year plan, the government recognized the failure of the previous plans and this time the main focus was on anti-poverty and minimum need programmes. This plan yielded good results.

Target growth rate: 4.4%                                    Achieved growth rate: 5.2%

Also Read: Planning Commission of India

SIXTH FIVE YEAR PLAN (1980-85):

The sixth five year plan marked a shift in the industrialization pattern from heavy industries to infrastructure development. Anti- poverty programmes and rural employment programmes were also launched during this period.

Target growth rate: 5.2%                                     Achieved growth rate: 5.3%

SEVENTH FIVE YEAR PLAN (1985-90):

In the seventh five year plan outward looking policy began with exports receiving priority. From this five year plan Liberalisation of Indian economy began.

Target growth rate: 5%                                          Achieved growth rate: 5.8%

EIGHTH FIVE YEAR PLAN (1992-97):

The eighth five year plan completely changed the face of Indian economy. The role of the government is minimized and private sector was given priority. India became a market oriented economy from this period.

Target growth rate: 5.6%                                        Achieved growth rate: 6.8%

NINTH FIVE YEAR PLAN (1997-2002):

Greater role to private sector was continued and new labour, land and legal reforms were introduced in this period.

Target growth rate: 6.7%                                       achieved growth rate: 5.4%

TENTH FIVE YEAR PLAN (2002-07):

Tenth five year plan focussed more on services and IT sector and was able to achieve expected growth rate. But the growth rate in the agriculture sector dropped down.

Target growth rate: 8%                                             Achieved growth rate: 7.8%

ELEVENTH FIVE YEAR PLAN (2007-12):

It emphasised more on agriculture and social sector and environmental sustainability and achieved agricultural growth rate of 4%.

TWELFTH FIVE YEAR PLAN (2012-17):

It is the present five year plan with the target of achieving faster, more inclusive and sustainable growth with development of all sectors and also decided to achieve growth rate of 8%.

Inclusiveness is a multidimensional concept. Which includes following attributes:

• Reduce Poverty
• Improve regional equality across states and within states
• Improve conditions of SCs, STs, OBCs, and minorities
• Generate attractive employment opportunities for youths
• Close gender gap

The twelfth five year plan has listed following 25 monitorable indicators :

Economic Growth

• Real GDP growth at 8%.
• Agriculture growth at 4%.
• Manufacturing growth at 10%.
• Every state must attain higher growth rate than the rate achieved during 11th plan.

Poverty and Employment

• Poverty rate to be reduced by 10% than the rate at the end of 11th plan.
• 5 Crore new work opportunities and skill certifications in non-farm sector.

Education

• Mean years of schooling to increase to 7 years.
• 20 lakh seats for each age bracket in higher education.
• End gender gap and social gap in school enrollment.

Health

• Reduce : IMR to 25; MMR to 1. Increase Child Sex Ratio to 950.
• Reduce Total Fertility Rate to 2.1
• Reduce under nutrition of children in age group 0-3 to half of NFHS-3 levels.

Infrastructure

• Investment in Infrastructure at 9% of GDP
• Gross Irrigated Area 103 million hectare (from 90 million hectare)
• Electricity to all villages; Reduce AT&C losses by 20%.
• Connect Villages with All Weather Roads
• National and State high ways to a minimum of 2 lane standard.
• Complete Eastern and Western Dedicated Freight Corridors.
• Rural Tele-Density to 70%.
• 40 Litres Per Capita Per Day Drinking Water to 50% of rural population; Nirmal Gram Status to 50% of all Gram Panchayats.

Environment and Sustainability

• Increase green cover by 1 million hectare every year.
• 30,000 MW renewable energy during Five Year Period.
• Emission intensity of GDP to be reduced to 20-25% of 2005 levels by 2020.

Service Delivery

• Banking Services to 90% of Indian Households.
• Subsidies and Welfare related payment to be routed through Aadhar based Direct Cash Transfer Scheme.

Also Read: Indian Economy

Thus, the five year plans had been playing a major role in the consolidation of Indian economy since Independence. However there was a need of reform in the process of planning as it was more than half century old and hardly  gone through a major upgradation. In a federal structure it is not easy to reform an institution which has been playing essential role in the centre-state financial relations. The erstwhile 50 years old Planning Commission of the socialist era was replaced by NITI Aayog earlier this year. Its role is to act as a think-thank to the government with noted economist Arvind Panagariya as its vice chairman. The government’s idea of NITI Aayog which is nothing but a much needed reformed Planning Commission as per the current economic necessities.

Also Read: 

Agriculture in India: Challenges with Agricultural Marketing and APMC Act

National Green Tribunal(NGT) and Yamuna Action Plan(YAP)

With an objective to develop Indian economy on 8^th April, 2015 Prime Minister Narendra Modi had launched the Micro Units Development and Refinance Agency or the MUDRA Bank under Jan Dhan Yojna.

As a flagship scheme of the Government of India Jan Dhan Yojna was launched by PM Narendra Modi on 28 August 2014 with an aim to abolish financial untouchability by catering bank accounts to the poor.

About MUDRA Bank

The Government of India has set up MUDRA Bank (Micro Units Development and Refinance Agency Bank) as a new institution for development of micro units and refinancing of Micro Finance Institutions (MFIs) to promote entrepreneurship in India by funding the non-corporate small business sector.

MUDRA Bank, as it is not a full-fledged bank, in its refinancing scheme, is going to provide loan through NBFCs, MFIs, Rural Banks, Nationalized Banks, Private Banks, Primary lending Institutions and other intermediaries.

MUDRA Bank is a financial initiative that is created to facilitate the micro units and cater them sufficient funds for their development. It has been felt that small businesses are often not able to get loans from banks due to lack of insufficient funds to pay off the interest. In India there are almost 577 crore small businesses at present functioning, and according to the PM, helping these businesses to grow can create an environment for the development of India economy.

Read Also: Poverty Alleviation Programs in India

Responsibilities of MUDRA Bank

Responsibilities of MUDRA consist of – preparing and launching the policy guidelines, registration and regulation of MFIs entities, running a credit guarantee scheme, and creating architecture for serving Micro business by providing them loan (financial assistance).

Eligibility Criteria for Participating Banks and Financial Institutions

To take part in the PMMY scheme the government of India has put some eligibility criteria which Banks and financial institution have to fulfill:

For Scheduled Commercial Banks

All Scheduled Commercial Banks in public private sector having, three years of continuous profit track record, net NPA not exceeding 3 per cent, minimum net worth of Rs100 crore and not less than 9 per cent CRAR are eligible to give loan under PMMY.

For Regional Rural Banks (RRBs)

All restructured RRBs with net NPA under 3 per cent (can be relaxed in deserving cases), having profitable operations and not carrying any accumulated losses and not less than 9 per cent CRAR are eligible to give loan under Prime Minister Mudra Yojna (PMMY).

MFIs and Small Business Companies can also take part if they fulfill requirements.

Must Read: National Green Tribunal(NGT) and Yamuna Action Plan(YAP)

Three categories of MUDRA Bank Scheme or Yojna

In order to signify the growth state, Development and Funding the small business or micro units have been classified into three categories: “Shishu (Child Category)”, Kishore Category” and “Tarun Category”.

“Shishu” : All those businesses which have been just started, that is Start ups, have been grouped into this category. A loan cover of Rs. 50,000 will be provided to all micro units grouped under this category.

Under this MUDRA Shishu Yojna banks have to cater loan upto Rs. 50,000. For this basic scheme banks are charging the interest rate that may vary from 10% to 12%. However, nationalized banks are charging less interest rate than private banks.

“Kishore”: Under this category come those businesses, which have been started but in dire need of their establishment.

Under this MUDRA Kishore Yojna banks have to provide loan between Rs. 50,000 to 5 Lakh. As it is a middle scheme that comes in the category of unsecure loan, its interest rate is high that varies form 14% to 17%.

“Tarun”: All small businesses, which have been established, have been grouped under this category. However, they require loan for their betterment.

Under this MUDRA Tarun Yojna an applicant can apply for the loan of between Rs. 5,00,000 to 10,00,000. It is also an unsecured loan therefore its rate of interest is high and begins from 16% and may vary from bank to bank. In every case an applicant must keep it in mind that the interest rate between Nationalized Banks and Private Banks are always different, so one must check the difference before applying for the loan.

Applying for PMMY

Before applying for a loan under PMMY, the applicant must prepare a business idea since she/he would have to present the idea along with the application form.

After preparing the business proposal the applicant should consult the Private or Commercial Bank nearest to her or his location.

The applicant has to keep in mind that along with his application form and business plan she/he has to provide proof of identify, proof of address and recent passport size photo.

All above formalities need to be fulfilled by the applicant as per the instructions of the bank.

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On 25^th June 2015, Prime Minister Narendra Modi launched India’s 100 smart cities mission, with a vision to promote cities, which will provide core infrastructure, sustainable environment application of smart solutions.

Concept of Smart City

The concept of smart city, as it means different things to different people, changes from city to city and country to country. It depends on the willingness to change and reform, the level of growth, aspirations and resources of the residents of the city. A smart city, therefore, would have a different meaning in India than it would have in America or Europe or England, etc. Even in India it cannot be defined exactly by using a single yardstick.

As some definitional frontiers are necessary to steer the Smart Cities Mission, urban planners have basically aimed at expanding the entire eco- system. This eco-system rests on the four pillars of comprehensive development: institutional, physical, social, and economic infrastructure.

Objective of the Smart Cities Mission

The objective of the mission is to promote cities that cater core infrastructure and provide its citizens a decent quality of life, a clean and sustainable environment and application of ‘Smart Solutions’.

The Smart Cities Mission, undoubtedly a new and bold initiative of the Government, has a committed vision to establish examples that can be presented as models to be replicated both within and outside the Smart City; thus, in the process, it can make way for the creation of similar Smart Cities in different parts and regions of the country.

Also Read: Pradhan Mantri MUDRA Yojna (PMMY)

The Core Infrastructure

The core infrastructure, according to the Smart Cities Mission, of a Smart City consist of adequate water supply; sanitation, comprising of solid waste management; guaranteed electricity supply; affordable housing especially for the poor; robust IT connectivity and digitalization; efficient urban mobility and public transport; good governance, especially e-governance and citizen participation; sustainable environment; safety and security of citizens, particularly women, children and the elderly; and health and education.

Smart Solutions of the Mission

Although preparing an exhaustive list of Smart Solution is not possible for cities are free to add applications according to their need and aspirations, a general list has, in a mode of guidelines, been prepared by the Smart Cities Mission. The list consists of:

Water Management

This section includes smart meters and management, leakage identification and its preventive measures; and water quality monitoring.

Waste Management

This section includes waste of energy and fuel; waste of compost; waste water to be treated; and recycling and reduction of C & D waste.

Energy Management

Under this section, smart meters and their management; renewable sources of energy; and energy efficient and green buildings are included

E-Governance and Citizens Services

This section deals with public information and grievance redressal; electronic service delivery; Citizens engagement; citizens – city’s eyes and ears; and video crime monitoring.

Urban Mobility

This section provides the guidelines for smart parking; intelligence traffic management; and integrated multi-modal transport.

Others

The purpose of the Mission is to enhance economic growth and improve the quality of life of people through local areas development by harnessing technology particularly the technology that leads to Smart outcomes.

The mission envisages that the area based development is going to convert existing areas, including slums, into better planned ones. This certainly is going to improve living condition of the entire city. New areas, supposed to be Greenfield ones, are to be developed around cities to accommodate the expanding population in urban areas. Application of Smart Solutions is certainly going to capacitate cities and its citizens in using technology, information and date to improve infrastructure and services. This sort of all round development, as visioned by the Smart Cities Mission, is surely going to create employment, enhance income for all, particularly for the poor and disadvantage, and improve quality of living. This will make way for inclusive Cities.

Must Read: Poverty Alleviation Programs in India

Implementation of Smart Cities Mission

For the implementation of the Mission at the city level a Special Purpose Vehicle (SPV), for each smart city, has been formed. The SPV has been accorded the responsibilities to plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate Smart City development projects. The members a SPV, headed by a full time CEO, are to be nominated by Central Government, State Government and ULB on its Boards.

The SPV is to be a limited company incorporated under the Companies Act, 2013 at the city–level. In this company the State/UT and the ULB are going to be promoters having 50:50 equity shareholdings. The private sector or financial institutions can also be considered for getting equity stake in the SPV on the condition that the shareholding pattern of 50:50 of the State/UT and the ULB remain intact and the State/UT and the ULB together hold majority of shareholding and control of the SVP.

The State/ULBs have to ensure the availability of a dedicated and substantial revenue team to the SVP in order to make it self-sustainable so as to it could evolve its own credit–worthiness for raising additional resources from the market. The State/ULBs have also to ensure it that Government contribution for Smart City is used only to make infrastructure that has public benefit outcomes. The execution of projects is to be completed through Public – Private Partnership (PPP), joint ventures, subsidiaries, turnkey contracts, etc. suitably attached with revenue streams.

 Fund Release under Smart Cities Mission

Each selected Smart City, in the first year, according to the proposal of the Central Government, will be provided a sum of Rs. 200 crore to create a higher initial corpus. After deducting Rs. Two crore advance and A & OE share of the MoUD, each selected Smart City is going to receive 194 crore out of Rs. 200 Crore in the first year followed by Rs. 98 crore out of Rs. 100 crore every year for the coming next three years.

The conditions for the release of yearly installment of funds to SPVs include timely submission of the City Score Card (CSC) every quarter to MoUD; satisfactory Physical and financial progress as shown in the Utilization Certificate and the annual city score card; achievement of milestones provided in the road map contained in SCP; and fully functioning SPV as penned down in the Guidelines and Articles of Association.

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