The Indian economy is characterized by a diverse and vibrant mix of

agriculture, industry, and services. India's economic growth has been driven
by a young and dynamic workforce, a large consumer base, advancements in
technology, and economic liberalization reforms initiated in the early 1990s.
The country has become a hub for information technology, software services,
and business process outsourcing, contributing substantially to its economic
output.

India has undergone significant economic transformations since gaining

independence in 1947. Over the years, it has transitioned from a primarily
agrarian economy to a more industrialized and service-oriented one.

1.1. Background

India's economic history is shaped by a combination of ancient trade routes,

colonial influences, and post-independence policy decisions. Before British
colonization, India was a major player in global trade, with a rich history of
commerce and economic activities. However, the colonial period had a
profound impact on the Indian economy, with the exploitation of resources and
significant changes in the agrarian and industrial sectors.

Under the British regime, the economic policies of the government were
concerned more with the protection and promotion of British economic
interests rather than with the need to develop economic condition of India and
its people.

Zamindari System was introduced by, the then, Governor General Lord
Cornwallis in 1793 through the ‘Permanent Settlement Act’. The Zamindars
were recognized as the owner of the land and were given the rights to collect
rent from the peasants. The realized amount would be divided into 11 parts
and 1/11 of the share belongs to Zamindars and 10/11 of the share belongs to
East India Company.

Ryotwari System was introduced by Thomas Munro in 1820. In Ryotwari

System, the ownership rights were handed over to the peasants and the
British Government collected taxes directly from the peasants.

During this time, the agricultural sector continued to experience stagnation

and deterioration despite the fact that the largest section of Indian population
depended on it for sustenance. The rule of the British-India government also
led to the collapse of India’s world-famous handicraft industries without
contributing, in any significant manner, to its replacement by a modern
industrial base. Lack of adequate public health facilities, occurrence of
frequent natural calamities and famines pauperized the hapless Indian people
and resulted in engendering high mortality rates.
The primary motive of the colonial government, behind policy of systematically
de-industrializing India, was two-fold. The intention was, first, to reduce India
to the status of a mere exporter of important raw materials for the upcoming
modern industries in Britain and, second, to turn India into a sprawling market
for the finished products of those industries so that their continued expansion
could be ensured to the maximum advantage of Britain. Due to the ill-effects
of de-industrialization, India decided to adopt the ‘mixed economy’ system
post-independence.

1.2. Capitalism Vs Socialism

Subsequently, soon after independence, the Indian leaders had to take a decision
on the model of development to be followed. The choice was between Socialism
with complete ownership and control on the means of production by the state or
Capitalism with ownership of the means of production totally in the hands of the
private sector with highly limited role of the state.

The Capitalistic Model had been adopted by UK, USA and a large number of
countries of Western Europe, which emphasized the role of private enterprises
in economic development. It was widely held that what was most profitable for
the individual was also good for the society and its economic welfare. Perfect
harmony could be achieved through the acceptance of the invisible hand of
self-interest and the use of the market forces of demand and supply.

Laissez faire is the belief that economies and businesses function best when
there is no interference by the government. It comes from the French,
meaning to leave alone or to allow to do. It is one of the guiding principles of
capitalism and a free market economy.

The Socialistic Model of development, on the other hand, was adopted in

USSR, after the Russian Revolution and had been accepted in Eastern
Europe and China. The model was inspired by the teachings of Karl Marx who
believed that the capitalistic system allowed a few powerful capitalists
(industrialists, landlords and big businessmen) to exploit the vast majority of
workers. To get rid from the exploitation of the capitalist class, all means of
production should be brought under state ownership and control, and the
economy would have no private enterprise based on self-interest. It was
described as the ‘totalitarian model of development’.

John M. Keynes, a renowned economist, however, thought that if some of the

defects of the capitalist system were removed, it would become an advisable
system as it helps to promote competition and efficiency in production. It was
much better than the socialism of the authoritarian type, which killed all
individual initiatives and deprived the individual of freedom, both economic
and political. A compromise was, therefore, suggested between high degree
of state intervention promoted in socialist economy on one hand and free
enterprise capitalist economy on the other, based on market forces.
1.3. Mixed Economy

India adopted the concept of mixed economy, which accepts the co-existence
of public and private sectors. It also provides for a greater role of the State to
direct economic activity as per the Directive Principles of the Indian
Constitution. The principle (Article 38(1)) laid down that the State should 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
form part of all institutions of national life”.

In India, it was thought that the State should ensure that the ownership and
control of the material resources of the community is managed in such a
manner that it leads to prevention of (a) concentration of wealth in the hands
of a few and (b) exploitation of labour. Therefore, in areas which are crucial for
the economy and in which private sector investment was not forthcoming, the
state should enter the field of production.

It was also observed that since the development of infrastructural facilities like
– hydroelectric projects, irrigation and flood control, rail and road transport,
communication, etc. required heavy capital investment with a long gestation
period and low rate of return, the private sector was unwilling to make the
necessary investments.

The public sector was, therefore, assigned the role of developing the
necessary infrastructural facilities. Besides, the State is also expected to take
care of the social infrastructure in the form of education and health as it is
equally important for promoting economic development and ensuring social
justice.

Thus, the mixed economy framework, as developed in India, has been trying
to reform the capitalist mode of production in order to promote development,
self-reliance, and equity with emphasis on helping the weaker sections of the
society. In other words, some features of socialist mode of production were
integrated into capitalistic mode of production and distribution so as to
maximize the social as well as economic welfare. Eventually, the Government
of India came up with various ‘Industrial Policy Resolutions’, which laid
emphasis on the mixed economy system and industrialization in India.

2. Sectors of Indian Economy

The Indian Economy can be broadly divided into 3 sectors: Primary,

Secondary and Tertiary.

1. Primary Sector: When we produce goods by exploiting natural resources,

it is an activity of the primary sector. This is because it forms the base for all
other products that we subsequently make. Since most of the natural products
we get are from agriculture, dairy, fishing, forestry, this sector is also called
agriculture and related sector. Examples are Agriculture, Agriculture related
and Mining activities, Dairy, Fishing, Forestry, etc.

2. Secondary Sector: The secondary sector covers activities in which natural

products are changed into other forms through ways of manufacturing that we
associate with industrial activity. The product is not produced by nature but
has to be made and, therefore, some process of manufacturing is essential.
Examples are Industries, Construction, etc.

3. Tertiary Sector: These are activities that help in the development of the
primary and secondary sectors. These activities, by themselves, do not
produce a good but they are an aid or a support for the production process.
For example, goods that are produced in the primary or secondary sector
would need to be transported by trucks or trains and then, sold in wholesale
and retail shops. Since these activities generate services rather than goods,
the ‘tertiary sector’ is also called the ‘service sector’.

The contribution made by each of these sectors makes up the structural

composition of the economy. In some countries, growth in agriculture
contributes more to the GDP growth, while in some countries’ the growth in
the service sector contributes more to GDP growth. For India, the contribution
of services in overall GDP is around 53%, of industries is around 31% and that
of agriculture is around 16%. It may be noted that the maximum population in
India (more than 50%) is engaged in agriculture.

As countries develop, their economies change, and in India, this change is

unique. Typically, agriculture’s share in the GDP decreases as industry's
share increases, and eventually, the service sector contributes the most to the
GDP. However, in India, agriculture's share in the GDP was initially high but
was surpassed by the service sector by 1990. This trend was further
accelerated after 1991 with globalization.

3. First IPR of 1948

The Government of India passed a resolution in April 1948, that was called the
First Industrial Policy Resolution of 1948, which made it clear that India was
going to have a mixed economy.

The resolution divided the industrial structure into 4 groups:

1. Basic and strategic industries such as arms and ammunition, atomic

energy, railways, etc., shall be the exclusive monopoly of the State.
2. The second group consisted of key industries like coal, iron and steel,
shipbuilding, manufacture of telegraph, telephone, wireless apparatus,
mineral oils, etc. In such cases, the State took over the exclusive
responsibility of all future development and the existing industries were
 allowed to function for 10 years after which the State would review the
situation and explore the necessity of nationalization.
3. In the third group, 18 industries including automobiles, tractors, machine
tools, etc., were allowed to be in the private sector subject to
government regulation and supervision.
4. All other industries were left open to the private sector. However, the
State might participate and/or intervene, if circumstances so demanded.

4. Industrial Policy Resolution (IPR) of 1956

On 30th April, 1956, the Government announced the Industrial Policy

Resolution of 1956. The reasons for the revision were:

 introduction of the Constitution of India,

 adoption of a planned economy, and
 declaration by the Parliament that India was going to have a socialist
pattern of society.

All these principles were incorporated in the revised industrial policy as its
most avowed objectives. This revised policy provided the basic framework for
the Government’s policy with regard to industries till June 1991.

The 1956 policy emphasizes, inter alia, the need to expand the public sector,
to build up a large and growing cooperative sector and to encourage the
separation of ownership and management in private industries and, above all,
prevent the rise of private monopolies. The 1956 policy has been known as
the Economic Constitution of India or the Bible of State Capitalism.

The Resolution classified industries into 3 categories, having regard to the

role, which the State would play in each of them:

 Schedule A, consisting of 17 industries, would be the exclusive

responsibility of the State.
 Schedule B, consisting of 12 industries, would be open to both the
private and public sectors; however, such industries would be
progressively state-owned.
 All the other industries not included in these 2 Schedules constituted the
third category, which was left open to the private sector. However, the
State reserved the right to undertake any type of industrial production.

4.1. Joint Sector in India

The Industrial Policy Resolution of 1956 laid emphasis on establishment

of Joint Sector Enterprises. Joint sector is nothing but the extension of idea
of mixed economy. Thus, the joint sector enterprises have ownership and
control in the hands of both public and private sectors. For example, after
independence, the Tatas set up Air India International with the participation of
the Government of India. The basic objective of joint sector was that public
funds should primarily be used to serve the public interest and that their
deployment should not result in undue benefits to a few individuals or
business houses. However, there were clashes between the ideologies of Dutt
Committee and the Tata Memorandum regarding the concept of ‘joint sector
enterprises’.

Eventually, both of them came to a conclusion and laid down 4 different types
of joint sector enterprises as discussed below.

1. Transforming some of the existing private enterprises into joint sector

enterprises by converting their loans from public financial institutions
into equity or through fresh equity participation.
2. Setting up new companies by the Central Government with equity
participation by both the Government and private investors.
3. Transforming the existing public sector enterprises into joint sector
enterprises through its sale of equity shares to private enterprises.
4. Setting up of new enterprises by the State Government or by the State
Industrial Development Corporations jointly with the participation of
private investors in its equity.

In the pre-1991 period, the joint sector did not make much headway in India
but in the post-1991 period, the country experienced growth of all the 4
different forms of joint sector enterprises, especially of the third type, with the
disinvestment of the share of public sector enterprises through its sale to the
private sector. Thus, in a mixed economy like India, both the public and
private sectors face certain limitations of their own. The private sector of the
country suffers from paucity of financial resources and public sector suffers
from lack of dynamic management. Thus, the setting up of joint sector
enterprises provides a compromise solution to provide both the benefit of vast
financial resources of the Government and dynamic management efficiency of
the private sector.

The Government also issued Industrial Policy Resolutions in 1973, 1977 and
1980.

5. Five Year Plans

A Plan spells out how the resources of a nation should be put to use. It should
have some general goals as well as specific objectives which are to be
achieved within a specified period of time. In India, the plans were of five
years’ duration and were called Five Year Plans (FYPs). Joseph Stalin
implemented the first FYP in the Soviet Union in the late 1920s. After
independence, India launched its first FYP in 1951, under socialist influence of
first Prime Minister, Jawaharlal Nehru.
Though, the planned economic development in India began in 1951, with the
inception of First Five Year Plan, theoretical efforts had begun much earlier,
even prior to the independence. Some of the steps in this direction were:

 Setting up of National Planning Committee by Indian National Congress

in 1938,
 Bombay Plan & Gandhian Plan in 1944,
 People’s Plan in 1945 (by post war reconstruction Committee of Indian
Trade Union), and
 Sarvodaya Plan in 1950 by Jaiprakash Narayan.

However, formal process for Five Year Plans began with setting up of
Planning Commission in March 1950 (with Prime Minister as its Chairman). It
was in the pursuance of declared objectives 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 and thereby increasing production and offering
opportunities to all for employment in the service of the community. The
Planning Commission was neither a constitutional nor a statutory body. It was
an extra-constitutional body.

The Planning Commission was charged with the responsibility of making

assessment of all resources of the country, augmenting deficient resources,
formulating plans for the most effective and balanced utilisation of resources
and determining priorities.

5.1. Goals of Five Year Plans

The goals of the Five Year Plans were: growth, modernization, self-reliance
and equity. This does not mean that all the five year plans have given equal
importance to all of these goals. Due to limited resources, a choice has to be
made in each plan about which of the goals is to be given primary importance.
Nevertheless, the planners have to ensure that, as far as possible, the policies
of the plans do not contradict these 4 goals. These goals are discussed below.

1. Growth
Growth refers to increase in the country’s capacity to produce the output of
goods and services within the country. It implies either a larger stock of
productive capital, or a larger size of supporting services like transport and
banking, or an increase in the efficiency of productive capital and services. A
good indicator of economic growth, in the language of economics, is steady
increase in the Gross Domestic Product (GDP). The GDP of a country is
derived from different sectors of the economy, namely, the agricultural sector,
the industrial sector and the service sector. The contribution 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 farmer can increase the output in the
farm by using new seed varieties instead of using the old ones. Hence,
adoption of new technology is called ‘Modernization’. However, modernization
does not refer only to the use of new technology but also to changes in social
outlook such as the recognition that women should have the same rights as
men.

3. Self-Reliance
A nation can promote economic growth and modernization by using its own
resources or by using resources imported from other nations. 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 is understandable that people who were
recently freed from foreign domination should give importance to self-reliance.
Further, 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
Now growth, modernization and self-reliance, by themselves, may not improve
the kind of life which people are living. A country can have high growth, the
most modern technology developed in the country itself, and also have most
of its people living in poverty. 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. So, in addition to growth, modernization and self-reliance,
equity is also important. Every Indian should be able to meet his or her basic
needs such as food, a decent house, education and health care and inequality
in the distribution of wealth should be reduced.

6. Five Year Plans Overview

The First Five-Year Plan (FYP) was launched in 1951 and two subsequent
Five-Year Plans were formulated till 1965, when there was a break because of
the Indo-Pakistan conflict. Two successive years of drought, devaluation of
the currency, a general rise in prices and erosion of resources disrupted the
planning process and after three Annual Plans between 1966 and 1969, the
fourth Five-year plan was started in 1969.

The Eighth Plan could not take off in 1990 due to the fast changing political
situation at the Centre and the years 1990-91 and 1991-92 were treated as
Annual Plans. The Eighth Plan was finally launched in 1992, after the initiation
of structural adjustment policies.
For the first 8 Plans, the emphasis was on a growing public sector with
massive investments in basic and heavy industries, but since the launch of the
Ninth Plan in 1997, the emphasis on the public sector has become less
pronounced.

The growth targets for the first 3 Plans were set with respect to National
Income. In the Fourth Plan, it was Net Domestic Product. In all the Plans
thereafter, Gross Domestic Product has been used.

6.1. First Plan (1951-56)

Key points related to the this Plan are listed below.
 It was based on Harrod-Domar Model. The Model suggests that the
economy's growth rate depends on the level of saving and the productivity
of investment (capital output ratio).
 Influx of refugees, severe food shortage & mounting inflation confronted
the country at the onset of the first five-year Plan.
 The Plan focussed on agriculture, price stability, power and transport.
 It was a successful plan primarily because of good harvests in the last two
years of the plan. Objectives of rehabilitation of refugees, food self-
sufficiency & control of prices were more or less achieved.
 Target Growth: 2.1 %; Actual Growth: 3.6 %

6.2. Second Plan (1956-61)

Key points related to the this Plan are listed below.
 Simple aggregative Harrod-Domar Growth Model was again used for
overall projections.
 The strategy of resource allocation to broad sectors such as agriculture &
industry was based on two & four sector Model prepared by Prof. P. C.
Mahalanobis (The Plan is also called ‘Mahalanobis Plan’).
 The Plan focussed on rapid industrialization - heavy & basic industries.
Advocated huge imports through foreign loans.
 Second plan was conceived in an atmosphere of economic stability.
 It was felt that agriculture could be accorded lower priority.
 The Industrial Policy of 1956 was based on establishment of a socialistic
pattern of society as the goal of economic policy.
 Acute shortage of Forex led to pruning of development targets, price rise
was also seen (about 30%) vis-a-vis decline in the earlier Plan & the
Second FYP was only moderately successful.
 Target Growth: 4.5%; Actual Growth: 4.3%

6.3. Third Plan (1961-66)

Key points related to the this Plan are listed below.
 At its conception, it was felt that Indian economy has entered a ‘take-off
stage’. Therefore, its aim was to make India a ‘self-reliant’ and ‘self-
generating’ economy.
 Based on the experience of first two Plans (agricultural production was
seen as a limiting factor in India’s economic development), agriculture was
given top priority to support the exports and industry.
 The Plan was a thorough failure in reaching the targets due to unforeseen
events – Chinese aggression (1962), Indo-Pak war (1965), severe drought
of 1965-66. Due to conflicts, the approach during the latter phase was
shifted from development to defence & development.
  Target Growth: 5.6%; Actual Growth: 2.8%

6.4. Three Annual Plans (1966-69)

Key points related to the this Plan are listed below.
 Euphemistically, described as a ‘Plan holiday’.
 Failure of Third Plan, the devaluation of rupee (to boost exports) along with
inflationary recession led to postponement of Fourth FYP. Three Annual
Plans were introduced instead. Prevailing crisis in agriculture and serious
food shortage necessitated the emphasis on agriculture during the Annual
Plans.
 During these plans, a whole new agricultural strategy was implemented. It
involved a wide-spread distribution of high-yielding varieties of seeds,
extensive use of fertilizers, exploitation of irrigation potential and soil
conservation.
 During the Annual Plans, the economy absorbed the shocks generated
during the Third Plan.
 It paved the path for planned growth ahead.

6.5. Fourth Plan (1969-74)

Key points related to the this Plan are listed below.
 Refusal of supply of essential equipments and raw materials from the
allies during Indo-Pak war resulted in twin objectives of “growth with
stability” and “progressive achievement of self-reliance” for the Fourth
Plan.
 Main emphasis was on growth rate of agriculture, to enable other sectors
to move forward. First two years of the plan saw growth in production. The
last 3 years did not measure up due to poor monsoon.
 Implementation of Family Planning Programmes were amongst major
targets of the Plan.
 Influx of Bangladeshi refugees before and after 1971 Indo-Pak war was an
important issue along with price situation deteriorating to crisis
proportions and the plan is considered as big failure.
 Target Growth: 5.7%; Actual Growth: 3.3%

6.6. Fifth Plan (1974-79)

Key points related to the this Plan are listed below.
 The final Draft of Fifth Plan was prepared and launched by D.P. Dhar in the
backdrop of economic crisis arising out of run-away inflation fuelled by
hike in oil prices and failure of the Government takeover of the wholesale
trade in wheat.
 It proposed to achieve 2 main objectives: ‘removal of poverty’ (Garibi
Hatao) and ‘attainment of self-reliance’.
 Promotion of high rate of growth, better distribution of income and
significant growth in the domestic rate of savings were seen as key
instruments.
 Due to high inflation, cost calculations for the Plan proved to be
completely wrong and the original public sector outlay had to be revised
upwards. After promulgation of emergency in 1975, the emphasis shifted
to the implementation of Prime Minister’s 20 Point Programme. FYP was
relegated to the background and when Janta Party came to power in 1978,
the Plan was terminated.
 Target Growth: 4.4%; Actual Growth: 4.8%

6.7. Rolling Plan (1978-80)

Key points related to the this Plan are listed below.
 There were 2 Sixth Plans. Janta Government put forward a plan for 1978-
83 emphasizing on employment, in contrast to Nehru Model which the
Government criticized for concentration of power, widening inequality and
for mounting poverty.
 However, the Government lasted for only 2 years. Congress Government
returned to power in 1980 and launched a different plan aiming at directly
attacking on the problem of poverty by creating conditions of an
expanding economy.

6.8. Sixth Plan (1980-85)

Key points related to the this Plan are listed below.
 The Plan focussed on increase in national income, modernization of
technology, ensuring continuous decrease in poverty and unemployment
through schemes like transferring TRYSEM (Training of Rural Youth for Self
Employment) and IRDP (Integrated Rural Development Programme) and
providing slack season employment (NREP- National Rural Employment
Programme), controlling population explosion etc.
 Broadly, the Plan could be taken as a success as most of the targets were
achieved even though during the last year (1984-85) many parts of the
country faced severe famine conditions and agricultural output was less
than the record output of previous year.
 Target Growth: 5.2%; Actual Growth: 5.7%

6.9. Seventh Plan (1985-90)

Key points related to the this Plan are listed below.
 The Plan aimed at accelerating food grain production, increasing
employment opportunities & raising productivity with focus on ‘food, work
& productivity’.
 The plan was very successful as the economy recorded 6% growth rate
against the targeted 5% with the decade of 80’s struggling out of the’
Hindu Rate of Growth’.
 Target Growth: 5.0%; Actual Growth: 6.0%

6.10. Eighth Plan (1992-97)

Key points related to the this Plan are listed below.
 The Eighth Plan was postponed by two years because of political
uncertainty at the Centre.
 Worsening Balance of Payment position, rising debt burden, widening
budget deficits, recession in industry and inflation were the key issues
during the launch of the Plan.
 The Plan undertook drastic policy measures to combat the bad economic
situation and to undertake an annual average growth of 5.6% through
introduction of fiscal & economic reforms, including liberalization under
the Prime Ministership of Shri P. V. Narasimha Rao.
 Some of the main economic outcomes during Eighth Plan period were
rapid economic growth (highest annual growth rate so far – 6.8 %), high
growth of agriculture and allied sectors, and manufacturing sector, growth
in exports and imports, improvement in trade and current account deficit.
 High growth rate was achieved even though the share of public sector in
total investment had declined considerably to about 34%.
 Target Growth: 5.6 %; Actual Growth: 6.8%

6.11. Ninth Plan (1997-2002)

Key points related to the this Plan are listed below.
 The Plan prepared under United Front Government focussed on “Growth
with Social Justice & Equality”.
 Ninth Plan aimed at depending predominantly on the private sector –
Indian as well as foreign (FDI) & State was envisaged to increasingly play
the role of facilitator & increasingly involve itself with social sectors, viz.,
education, health, etc. and infrastructure where private sector
participation was likely to be limited.
 It assigned priority to agriculture & rural development with a view to
generate adequate productive employment and eradicate poverty.
 Target Growth: 6.5%; Actual Growth: 5.4%

6.12. Tenth Plan (2002-07)

Key points related to the this Plan are listed below.
 Recognizing that economic growth cannot be the only objective of national
plan, Tenth Plan had set ‘monitorable targets’ for few key indicators (11
indicators) of development, besides 8% growth target.
 The targets included reduction in gender gaps in literacy and wage rate,
reduction in infant & maternal mortality rates, improvement in literacy,
access to potable drinking water, cleaning of major polluted rivers, etc.
 Governance was considered as factor of development & agriculture was
declared as prime moving force of the economy.
 State’s role in planning was to be increased with greater involvement of
Panchayati Raj Institutions.
 State wise break up of targets for growth and social development sought
to achieve balanced development of all States.
 Target Growth: 8 %; Actual Growth: 7.6 %

6.13. Eleventh Plan (2007-12)

Key points related to the this Plan are listed below.
 Eleventh Plan was aimed ‘Towards Faster & More Inclusive Growth’ as it
was perceived that the growth was not sufficiently inclusive for many
groups.
 The broad vision for 11th Plan included several inter related components
like rapid growth, reducing poverty & creating employment opportunities,
access to essential services in health & education, especially for the poor,
extension of employment opportunities using National Rural Employment
Guarantee Programme, environmental sustainability, reduction of gender
inequality, etc.
 The Eleventh Plan started well but subsequent events of global financial
crisis (2008) and sovereign debt crisis in Europe (2011) forced the average
annual growth rate to 8%.
 Target Growth: 9 %; Actual Growth: 8%
6.14. Twelfth Plan (2012-17)
Key points related to the this Plan are listed below.
 Twelfth Five Year Plan emphasized on bringing the economy back to rapid
growth while ensuring that the growth is both inclusive and sustainable.
 The broad vision and aspirations were reflected in the subtitle: ‘Faster,
Sustainable, and More Inclusive Growth’.
 Inclusiveness is to be achieved through poverty reduction, promoting
group equality and regional balance, reducing inequality, empowering
people, etc.
 Sustainability includes ensuring environmental sustainability, development
of human capital through improved health, education, skill development,
 nutrition, information technology, etc. and development of institutional
capabilities, infrastructure like power telecommunication, roads, transport,
etc.
Twelfth Plan (2012-17) was the last plan and, after that, the planning process was
taken over by the NITI Aayog.