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Trends in NNP

The real national income of India has increased at an annual average rate of 4.9% during last 60 years of economic planning. There are two distinctive phases of economic growth in India since independence i.e., 1950-80 and 1980-2010. During 1950-80, growth in GDP was 3.2% and during 1980-2010, the growth in GDP was 6.6% p.a. If we consider the period between 1991-92 and 2009-10, GDP growth rate has increased to 7.3% p.a.
 
The reasons for very poor performance of the economy during 1950-80 are:
  • Colonial past
  • Restrictive trade policy
  • Licensing system
  • Inward looking of foreign policies
  • Excessive stress on public sector and socialistic society
  • Anti-market and anti-competition attitude of the state
Acceleration of the economic growth since 1980 was due to:
  • Well-developed social and legal framework
  • Improvised higher education system
  • Better infrastructural facilities
  • Progress in science and technology
Economic growth slowed down in 2008-09 to 6.7% due to the global financial crisis and consequent economic recession in developed economies. This was spread across almost all the sectors. The economy grew at 8.6% in 2009-10 and at 9.3% in 2010- 11. India is among the top ten fastest growing countries in the world along with China, Vietnam, South Korea, Malaysia, Thailand and Singapore among others.
 
Plan
Growth rate in National Income
1st 5 Year Plan
4.40%
2nd 5 Year Plan
4.00%
3rd 5 Year Plan
2.60%
4th 5 Year Plan
3.10%
5th 5 Year Plan
4.90%
6th 5 Year Plan
5.40%
7th 5 Year Plan
5.50%
8th 5 Year Plan
6.70%
9th % Year Plan
5.30%
10th 5 Year Plan
7.6% (3.8%, 9.0%, 7.8%, 9% and 9.2% each year respectively)
11th % Year Plan
The approach paper to the 11th plan keeps a target of 7.8% p.a. as the growth rate.

Trends in per capital income

India’s per capita net national product during the 6 decades of planning has increased at a rate of 3% p.a. The per capita income increased at a modest rate of about 1.8% and 2.0% respectively during the 1st and 2nd plans respectively. Due to droughts during the 3rd plan, the per capita income was almost 0%. During the 4th and 5th plans, the per capita income grew at the rate of 1.5% and 2.7% p.a. respectively. During 1979-80, it fell to about 8.3%. During the 6th and 7th plans, the per capita income recorded a growth of 3.2% and 3.6% p.a. respectively. In the 8th and 9th plans, the per capita income witnessed a growth rate of 4.5% and 3.3% p.a. respectively. In the 10th plan, per capita income growth accelerated to 6.1% p.a.
 
Economic reforsm undertaken since 1991, contributed to the rapid growth of P.C.I. during 1991-2010, the P.C.I. has grown at 5.3% per annum. During 11th Five Year Plan P.C.I. has increased at 6.3% per annum.




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