First Five-Year Plan part 12

 Here are structured notes from the audio about the First Five-Year Plan (1951-1956):

First Five-Year Plan (Okkatava Pranalika)

1. Introduction & Importance

• Crucial chapter for understanding Economy section in General Studies exams.

• Can help answer many questions (speaker estimates 6 out of 10 GS economy questions if mastered).

• Covers various areas of the economy.

2. Key Features

• Period (Kalam): 1951-1956 (Specifically April 1, 1951 to March 31, 1956)

• Priority (Pradhanyatha): Agriculture (Vyavasayam)

• Architect/Designer (Roopakarta): Mokshagundam Visweswarayya

  • First suggested planning for India (1934 book "Planned Economy for India").

  • Called "Father of Indian Planning" (Bharata Pranalika Pitamahudu).

• Growth Model (Vriddhi Namuna): Harrod-Domar Growth Model (Harrod and Domarla Vriddhi Namuna)

• Leadership:

  • Chairman (Adhyakshulu): Jawaharlal Nehru

  • Deputy Chairman (Upadhyakshulu): Gulzarilal Nanda

• Growth Rate (Vriddhi Retu):

  • Target (Lakshyam): 2.1%

  • Achieved (Sadinchina): 3.6% (Plan was successful)

  • Achieved Per Capita Income Growth Rate (Sadinchina Talasari Adaya Vriddhi Retu): 1.8%

  • Success partly attributed to nature's support (good rains).

• Expenditure:

  • Estimated (Anchanavyayam): ₹2069 Crores

  • Actual (Vastava Vyayam): ₹1960 Crores

• Fund Allocation Priorities (Adhika Nidulu Ketayinchina):

  • Agriculture & Irrigation (Vyavasayamu Mariyu Neeti Paarudala): 31%

  • Transport & Communication (Ravana Mariyu Samacharam): 27%

  • Social Services (Sanghika Sevalu): 22%

  • Power (Vidyut): 13%

  • Industry & Minerals (Parisramalu Mariyu Khanijalaku): 6% (Very little)

3. Special Characteristics / Highlights (Pratyekathalu)

• Reduce Poverty (Pedarikanni Tagginchali): Set as a target.

• Increase Food Grain Production (Aahara Dhanyala Utpattini Penchadam): Target set due to low production under British rule. Achieved increase from 61 to 66 million tons.

• Control Inflation (Dravyolbhananni Niyantrinchali): Target set due to high inflation post-WWII. Prices decreased by 13% in this plan (only plan where prices decreased).

• Control Illegal Immigrants (Akrama Chorabaatudarulanu Niyantrinchadam): Major concern after Partition. Set as a target.

• These four are considered the most important highlights/goals.

4. Major Projects

• Significant funds allocated to Irrigation Projects (Neeti Paarudala Projects).

  • Damodar Project: West Bengal, Damodar River. Completed by 1953 (started earlier, ~1948).

  • Bhakra Nangal Project: Himachal Pradesh (Bhakra) & Punjab (Nangal), Sutlej River. Completed in 1963 (started ~1948).

  • Hirakud Project: Odisha, Mahanadi River. Completed in 1957 (started ~1948).

  • Nagarjuna Sagar Project: AP & Telangana, Krishna River. Foundation Stone Dec 10, 1955, construction started Dec 11, 1955. Completed in 1967.

  • Note: Projects were funded in this plan, but not necessarily started and finished within the 5-year period.

5. Industries Established/Funded

• Funds allocated to specific industries. Exam questions may ask to identify industries related/unrelated to this plan.

  • Bengaluru National Telephone Industry: Bengaluru, Karnataka (Construction started 1948)

  • Chittaranjan Locomotive Works: Asansol, West Bengal (Construction started 1950)

  • Hindustan Shipyard: Vizag (Visakhapatnam), AP (Nationalized in 1952, acquired Scindia Steam Navigation)

  • Hindustan Cables Industry: Durgapur, West Bengal (Established 1952)

  • Sindri Fertiliser Industry: Sindri, Jharkhand (Established 1952, frequently asked in exams)

  • Hindustan Machine Tools (HMT): Mysore, Karnataka (Established 1953)

  • Note: Remembering locations is more important than exact establishment years (except where specifically highlighted like Hindustan Shipyard 1952).

6. Key Developments (Year-wise within the Plan)

• 1951:

  • IDRA Act (Industrial Development and Regulation Act): Passed in 1951, implemented from 1952.

    • Telugu: Parisramala Abhivrudhi Kramabuddheekarana Chattam.

    • Purpose: To regulate and control the establishment of private industries. Required license/permission.

    • Also known as "License Raj Act".

    • Objective: Prevent concentration of industries in few hands, one place, or one sector.

    • Later led to corruption and inequality.

    • Hazari Committee was appointed to examine its implementation.

    • Repealed in 1991 during economic reforms.

  • CSO (Central Statistical Organisation): Established in 1951.

    • Telugu: Kendriya Ganaanka Samstha.

    • Initial purpose related to statistics.

    • Given responsibility for National Income estimation in 1954, based on the final report of the National Income Estimation Committee (1954).

    • Started publishing data from 1951.

    • Merged with NSSO in 2019 to form NSO (National Statistical Office), which now estimates National Income.

  • NSSO (National Sample Survey Organisation): Established in 1951.

    • Estimated poverty and unemployment.

    • Merged with CSO in 2019 to form NSO.

• 1952:

  • National Forest Policy: Introduced in 1952.

    • Stated that 33% of India's land area should be under forest cover (asked in exams).

• 1954:

  • SIDO (Small Industrial Development Organisation/Corporation): Established in 1954.

    • Purpose: To promote and develop Small Scale Industries (SSI).

    • Recognized SSI importance for faster development.

    • Provided permissions and support to SSI.

    • Evolved into DICs (District Industrial Centres) established in 1978.

    • 1978 is considered the Golden Age for SSI in India (asked in exams) due to the establishment of DICs.

  • CSO given National Income estimation responsibility.

• 1955:

  • ICICI (Industrial Credit and Investment Corporation of India): Established in 1955.

    • Telugu: Bharata Parisramala Parapathi Pettubadula Samstha.

    • Private sector financial institution providing long-term loans to industries.

    • Worked in the capital market.

    • Converted into ICICI Bank in 1994 based on Narasimham Committee recommendations (post-1991 reforms).

    • ICICI Bank became India's first Universal Bank, based on RSH Khan Committee recommendations.

    • Universal Bank: Provides all types of financial services (loans, insurance, investments etc.).

  • Essential Commodities Act: Passed in 1955.

    • Prohibited hoarding and uncontrolled export of essential commodities (Rice, Wheat, Pulses, Vegetables like Tomato/Onion/Potato).

    • Objective: Control prices and ensure domestic availability.

    • Prevented market infrastructure development (storage) for these goods, sometimes harming farmers.

    • Amended in 2020 to allow storage/export (as part of new farm laws), but these amendments were repealed. The original 1955 act remains.

  • SBI Nationalization: State Bank of India was nationalized in 1955.

    • Based on Gorwala Committee recommendations.

    • The existing private bank, Imperial Bank of India, was purchased by the government and renamed State Bank of India.

    • Imperial Bank of India was formed in 1921 by merging three Presidency Banks (Bank of Calcutta 1806, Bank of Bombay 1840, Bank of Madras 1843).

    • Imperial Bank of India also functioned as India's central bank from 1921 to 1935 (until RBI was established).

7. Major Programs / Schemes (Pathakalu)

• CDP (Community Development Programme): Launched on October 2, 1952.

  • Telugu: Samaj Abhivrudhi Karyakramam.

  • Based on Krishnamachari Committee recommendations.

  • Supported by Ford Foundation.

  • Objective: Develop community assets in rural areas (roads, drainage, schools, water etc.) with public participation. Aligned with Gandhiji's ideas.

  • Two major programs were implemented as part of CDP:

    • National Malaria Eradication Programme (1952) - to control malaria.

    • National Population Control Programme / Family Planning Programme (1952) - India's, and the world's, first official family planning program.

• NESS (National Extension Services Scheme): Launched on October 2, 1953.

  • Telugu: Jatiya Vistarana Seva Pathakam.

  • Implemented as part of CDP.

  • Objective: Extend government services to all sectors and sections of the country, especially those previously unreached (like livestock rearers, fishermen etc.).

8. Conclusion

• The first plan period saw significant institutional development (IDRA, CSO, SIDO, ICICI, SBI, etc.) and the launch of major programs aimed at rural development and public welfare (CDP, NESS, health & family planning).

• Achieved higher-than-targeted growth rate.

• Successfully controlled inflation.