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What were the goals of the Five Year Plans?

The goals of the five year plans are:
Self reliance



Give a brief description about the four goals.

A description about the goals of the five year plans are as follows: Growth refers to the increase in the production capacity of our country i.e production of output goods and also the increase of services within the country. This means a large stock of productive capital or a large quantity of supporting services like transport and banking or an increase in the efficiency of the productive capital and services of the country.
  Modernization just not refer to just adoption of new technology, it also refers to changes in the thinking and social outlook of the people of our country.
  Self reliance means avoiding import of goods which can be produced in our country itself.
  Equality means that every Indian citizen should be able to fulfill his basic needs and enjoy the benefits of economic growth.



Discuss about the IPR 1956

IPR 1956 was adopted keeping the goal of the state controlling the commanding heights of the economy. This resolution was the basis of the Second Five Year plan. This plan tried to build a foundation for a society based on the socialist pattern. It categorized industries into three categories namely, First category: Industries which are completely owned by the state
  Second Category: Industries in which the public sector can be supported by the private sector
  Third Category: The remaining industries which were in the private sector.

Though there was a set of industries left to the private sector, the state exercised control over them through a system of licenses. Unless a license was not obtained from the government, new industries were not allowed to get set up.


Should subsidies be given? Discuss the usefulness of subsidies.

Subsidies should be given in order to promote a new technology. Once the technology has turned into a success, the subsidies should be withdrawn. This was the feeling a huge portion of economists had. As far as India is concerned, the subsidies given the government for the agricultural sector proved to be necessary and had turned useful. They enabled the small farmers to adopt new technologies and ushered in the Green Revolution, thereby making us self sufficient.


Why did India promote small-scale industries?

The Karve committee pointed out the possibility of promoting rural development through small-scale industries. Hence small-scale industries were promoted.
Also there was a general belief that small-scale industries are labour intensive and hence would generate employment opportunities.



How did the government protect the small scale industries from competition large firms?

The government protected the small-scale firms in the following ways: The production of a lot of goods is restricted to small scale industries only.
  They were given concessions like lower excise duty and ban loans at a lower rate of interest.



Explain about how the government protected the domestic products that were produced through our industries.

The government protected the domestic goods in the following ways:

The protection from imports was in two forms:


Taxes imposed on imported goods to make them more expensive are called tariffs. Quotas set a limit on the quantity of goods that can be imported. These quotas and tariffs restrict the import of foreign goods and protect the home made productions


Explain the impacts that the plans had on our economy.

The impacts on our economy were both positive and negative. The following were the effects of the economic policies followed by the government:


The GDP proportion contributed by the Industrial sector rose to 24.6% in 1990-91 from 11.8% in 1950. The 6% annual growth rate of the industrial sector and its increased share of contribution in the GDP is an important of the growth of our nation.
  By 1990, the Indian industry became very well diversified and was not restricted to just jute and cotton textile mills.
  Promoting the small-scale industries resulted in opportunities given to people who did not have sufficient capital to start an industry of their own.
  Protection against foreign competition promoted the growth of industries like electronics and automobiles which would not have grown otherwise.
  The public sector continued to hold monopoly over certain sectors even after rapid growth by the private sector.
  The point that these economists want to make is that there is no distinction between what the public sector alone can do and what the private sector can do.
  Even today, only the public sector can take care of the national security and render free medical service for the poor.
  Though the private sector can and does run hotels, the public sector does too.
  These economists felt that the government should come out of areas which the public sector can manage and should instead give more attention to important services which the private sector can not provide.
  Many firms run by the government continue to function despite heavy losses because it is not possible to close a government organization.
  The policy of obtaining a license to start an industry was misused by big industrialists to prevent competitors from starting a new industry. Excessive regulation of what was later called permit license raj prevented a higher level of efficiency of certain firms.
  The industrialists started spending more time in lobbying with ministers and getting licenses than in improving the products.
  The protection against import is also believed to have adverse effects Since the producers knew that they had control over the consumer market and did not have much competition, they did not have any incentive to really try and improve the quality of the goods produced.



Overall do you think that the policies followed by the government aided economic growth?

Yes to an extent, the policies followed by the government aided the economic growth of India. We attained self sufficiency through Green revolution. India got industrialized and the domestic market got enough protection to aid its growth. The public sector played a major role in shaping the economy. The only drawback was that even after substantial growth was attained, the public sector continued to maintain monopoly over certain sectors and importantly obtaining permits and license were manipulated by unscrupulous industrialists.


Write a short note on small scale industry.

In 1955, a committee called as the Village and Small scale industries committee also known as the Karve committee pointed out the possibility of promoting rural development through small-scale industries. A small sale industry is defined with reference to the maximum investment allowed on the assets of a unit. Over a period of time, this limit has changed. In 1950, a maximum investment of 5 lakhs was set in order to call an industry a small-scale industry. Today, the limit is R.s1 crore.


Enumerate the three different categories under which industries are categorized.

First category: Industries which are completely owned by the state

Second Category: Industries in which the public sector can be supported by the private sector

Third Category: The remaining industries which were in the private sector.


What are the Methods adopted to overcome the drawbacks of the Green Revolution.

The government gave small farmers loans at very low interest rates and provided them with subsidies so that they could also buy the HYV seeds and benefit.


The risk of the small farmer losing his crops to the pest was considerably reduced by the services given by the research organizations set up by the government.


What are the Drawbacks at the advent of Green Revolution.


One major drawback was the increase in the disparity between small and big farmers because only the bigger farmers could afford the HYV seeds and hence reaped more benefits and profits.


The HYV seeds were prone to pest attacks and hence in case of attacks a small farmer couldn’t afford the loss.

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