4th Five Year Plan
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Preface || Planning Commission
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Planning is the vital instrument we have adopted to realise the social objective enshrined in our Constitution. Though the Five Year Plans we have already achieve a significant increase in the national income in the past eighteen years and laid the foundations of technological advance. The Plan is fast modernising our agriculture and strengthening and diversifying our industry. Above all, it has reinforced national unity and purpose.

The attack on our territory in 1962 and again in 1965 forced us to modify the pattern of national expenditure. Before we could reconciie the competing claims of development and defence, drought struck us. Foreign credits became uncertain, Recession followed. All these seriously restricted our freedom of choice. We had to divert our energies to fight drought and nean famine and their aftermath. For some time, long-term planning had to be virtually suspended. But we succeeded in turning adversity to good use. We concentrated on import substitution which further enlarged our industrial base. This along with the need for more foreign exchange put us on the path of a more fruitful export drive. We maintained our investment in development work, especially in intensive agricultural programmes.

A new period has how opened. There is a welcome upsurge in the economy, and the increases in agricultural pioduction have brought us nearer to self-suflciency in foodgrains. But, inevitably, there are other problems, and a fresh challenge to face. Rural disparities have increased, partly owing to the very efforts we have made to move rapidly towards self-sufficiency in food, and partly owing to a certain tardiness in the matter of implementing the land reforms. Although the industrial recession has waned, new industries are not coming up fast enough and unemployment, especially of technically trained persons, continues to be acute. We have a larger and, understandably enough, a more articulate population.

Planning is the method to which we are committed for meeting such challenges. We have carried out three Five Year Plans. Each Five Year Plan has addressed itself specially to problems which have emerged either because of new political and economic developments in the country and in the world, or as a consequence of progress already achieved. The priorities and the emphasis have necessarily changed and have had to be adjusted from Plan to Plan, but we have always kept in view our long-term objectives.

The Fourth Plan represents a conscious, internally consistent and careful!} thought out programme for the most eficient exploitation of our resources possible in existing conditions. The basic aim is to raise the standard of living of the people, especially of the less privileged sections of society. Our planning should result not only in an integrated process of increased production, but rational distribution of the added wealth. The overriding inspiration must be a burning sense of social justice. While increased production is of the utmost importance it is equally important to remove or reduce, and prevent the concentration of wealth and economic power. The benefits of development should accrue in increasing measure to the common man and the weaker sections of society, so that the forces of production can be fully unleashed. A sense of involvement, of participation by the people as a whole, is vital for the success of any plan of rapid economic growth. This can only be evoked by securing social justice, by reducing disparities of income and wealth, and by redessing regional imbalances. A reorientation of our socio-economic institutions in this spirit is accordingly, a first necessity.

One year of this Plan has already gone by. Between the Draft Plan and the present document, certain important changes have been made. The projected investment in the public sector has been stepped up so as to enable us to undertake a larger and bolder agenda of work. New schemes have been added to help the small farmer throughout the country, especially in the unirrigated areas. The emphasis is squarely on areas that have hitherto suffered fiom neglect. Transport and housing problems in urban regions will receive more attention. A small but significant beginning is also being made with special programmes for children.

The Fourth Plan thus provides a necessary corrective to the earlier trend which helped particularly the stronger sections in agriculture as well as in industry to enable them rapidly to enlarge and diversify the production base. In the long run, the full potential of growth cannot be realised unless the energies of all our people are put to profitable use. The emphasis on spreading the impetus and benefits of economic growth to the weaker sections is thus necessary in the interest of equality as well as growth. The Plan will now assist the less prosperous sections of our farming population to improve their position and make a yet bigger contribution to the national economy. Greater industrial activity and the modernisation of agriculture such as is proposed through the wider use of electric power and the adoption of intensive methods of cultivation in both irrigated and dry areas, would mean that a larger proportion of young people seeking jobs could find employment nearer home. At the same time, there are some new schemes, e.g.,for a network of service centres in the rural areas, which will open out opportunities for young entrepreneurs.

The nationalisation of the fourteen big banks is evidence of our determination to bring a greater volume of resources within the area of social decision. It has effected a major change in our economic structure. It enables us to pay more attention to the "small man's" needs, and it restricts the scope for the monopolistic operations of the privileged few. Among other areas where social considerations have still to make a comparable impact are the enforcement of land laws, the management of public sector enterprises, and the toning up of the administration as a whole.

There can be no doubt that the responsibilities devolving upon the public sector —without diminishing those of the private sector, in our mixed economy—will grrw in range and volume. Socialism involves a reordering of society on a rational and equitable basis and this can only be achieved by assigning an expanding role to the public sector. Following the reorganisation of credit policies resulting from the nationalisation of major banks, the public sector can be expected more and more to occupy the commanding heights of the economy. It alone would be in a position to undertake investments of the requisite magnitude in such industries of vital importance to us as steel, machinery, machine tools, power generation, ship-building, petrochemicals, fuels and drugs. Naturally, the administration of public enterprises poses some problems of its own (here as in other countries) but they are not insuperable and will be overcome as we gain experience.

In addition to the fight against poverty and economic inequalities, the Plan seeks to enlarge the area of self-reliance in terms of financial resources and technological inputs. Here, too, the public sector has an important part to play. Besides striving^ to set an example in better management methods and ushering in a new pattern of worker management relations, the public sector should increasingly base itself on domestic know-how. The public and private sectors have both been too ready to look to foreign collaboration not only for financial but for technological resources. Such collaboration may be unavoidable when new processes have to be introduced but excessive reliance on it has induced a state of mind which inhibits the development of our own technological skills and managerial talents. We should rely more and more on our own machinery and technical know-how, even though it may entail some initial risks and difficulties. This does not mean that we should be indifferent to the latest developments in technology, especially in the fastgrowing sectors. But it would be folly to forget that a nation's strength ultimately consists in what it can do on its own and not in what it can borrow from others.

There has been a noticeable change in recent years in the climate of international economic cooperation. It is now increasingly reafirmed by responsible sections of public opinion in the lending as well as in the borrowing countries that development assistance should not be regarded as an instrument of foreign or commercial policy but as a means of correcting dangerous imbalances in the world economy. However, "aid" is in reality credits which have to be repaid; and even if such credits are available on terms which are concessional in some respects, they often have features which are not consistent strictly with the objective of development. For some time to come we can benefit by more external credits, especially untied credits on concessional terms. But we have to take note of international realities as they are and reduce our reliance on foreign credits.

The policy of self-reliance does not mean that we should be actually reducing imports from the rest of the world. In fact, as the pace of development quickens, imports of industrial raw materials, intermediates and special components will go up. But. we propose to pay for them increasingly through our own earnings from exports. Economic independence, therefore, hinges to a considerable extent on how we fare in export markets; and our export performance in turn would depend on the state of our economy at home and our sucess in developing a purposive, planned approach to the problem.

The complaint that planning has led to a rise in prices and that planning is, therefore, harmful, is misconceived and unfounded. Consumers with fixed incomes, particularly in urban areas face hardship when prices rise; but at the other extreme, when prices are reduced or depressed to uneconomic level, producers suffer and employment sags. If development means larger real incomes to ever larger numbers of people, some price increases can hardly be avoided. What we must ensure, however, is stability in respect of the core items of family consumption. An adequate supply of foodgrains and articles of everyday use must be maintained at fairly stable prices. Agricultural scientists who have brought about such notable increases in yields of wheat, and to some extent of millets and rice, have now turned to the task of bringing about similar gains in pulses and cash crops like oilseeds, cotton and sugarcane. In general, the possible impact of development plans on the price situation has been carefully studied, and every effort will be made to keep production and prices in balance.

Planning certainly has its critics, but the fact remains that in modern conditions, and in a developing country like ours, economic planning has become indispensable. Compared to the tasks to be accomplished, the resources of money, trained manpower and administrative and managerial skills are in short supply, and they have to be allocated primarily with a view to the national interest rather than the interest of any private individual or group. This is, after all, what the Plan seeks to do. At the same time, and through such rational allocation, it can lead to an augmentation of the now scarce resources, and this gradually extend the limits of our economic freedom.

For us in India, planning is a charter of orderly progress. It provides a framework of time and space that binds sectors and regions together and relates each year's effort to the succeeding years, impelling us all constantly to greater cooperative endeavour. By strengthening the economic fabric of the country as a whole and of the different regions, it makes a powerful contribution to our goal of national integration.

The Plan gives concrete expression to our national purpose. With its implementation, we shall have advanced yet another stage towards our goal of a prosperous, democratic, modern, socialist society. In meetings of the National Development Council, I have found that all States, irrespective of the political beliefs their Governments hold, have very similar expectations of the Plan. This is so, because our people as a whole have pinned their hopes on the Plan, and want it to succeed, I am confident that they will not spare themselves in a determined effort to ensure that it does succeed.


18 July 1970.

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