SIXTH FIVE YEAR PLAN 1980— 85 MID-TERM APPRAISAL GOVERNMENT OF INDIA PLANNING COMMISSION NIEPA - DC (August, 1983) G0748 (V- '1 M§ :v>; FOREWORD The work of preparation of the Sixth Five Year Plan covering the period 1980—85 was taken up in April 1980. The Plan was approved by the National Development Council in February 1981 and presented to Parliament and the nation. Three years of the Plan have now been completed. A mid-term appraisal of a Five Year Plan is normally conducted half-way through its progress. Thus, the mid-term appraisal of the Sixth Five Year Plan 1980—85 should have been presented sometime towards the latter half of 1982. As is know'll, however, adverse weather in the kharif season of 1982 affected agricultural production, which is by far the most important component of the economy. The prospects for growth in 1982-83, together with the likely impact on savings, resources, and investments that would be available over the balance of the Plan period had therefore to be carefully assessed. This has taken some time. In the result, the mid-term appraisal now covers the progress of the first three years of the Plan. Though there has been delay in the finalisation and the presentation of the mid-term appraisal document, the exercise has been purposeful. A close and detailed evaluation has been made of the performance so far and of the prospects for the remaining period of the Plan. The estimated growth over the Plan period will be close to the Plan target, and the comparatively efficient use of resources together with structural adjustments have developed significantly the resilience and self-reliance of the economy. An ambitious programme of mobilisation of additional resources was drawn up and successfully implemented both by the Centre and the States. While the Plan targets will be fulfilled in full or adequate measure in a number of areas including many in the sectors of agriculture and industry, some special efforts would yield improved performance in the production of foodgrains, as also in the infrastructural sectors. The appraisal deals with some of the measures necessary in this regard, so that a firm basis is laid for the continued growth of the economy to the end of the Plan period, as W'ell as in the post-Plan period. 1 have great pleasure in presenting this appraisal to Parliament and the nation. S. B. CHAV AN Minister for Planning New Delhi, 19 August, 1983. (0 TABLE OF CONTENTS P ages Part I The Overall Assessment Chapter 1 Overview of the Economy in the first three years of the Plan ..... 1—3 Chapter 2 Growth of Output ............. 4—8 Chapter 3 The Prospects for the Sixth Plan ............................................................................................. 9 — 11 Chapter 4 Balance of Payments ............ 12—24 Tables 1 to 1 3 .................................................................................................................................................. 16—24 Part II Sectoral Reviews Chapter 5 Agriculture & Allied Sectors ........... 27—39 Chapter 6 Irrigation, Command Area Development & Flood Control ..... 40—47 Chapter 7 Rural Development and C o - o p e r a t i o n ................................................................................... 48—54 Chapter 8 Village and Small Industries .... ..... 55—61 Chapter 9 Labour, Manpower and Employment ......... 62—63 Chapter 10 Minimum Needs Programme ........... 64—66 Chapter 11 Energy .............. 67—74 Chapter 12 Industry and M i n e r a l s .................................................................................................................. 75—83 Chapter 13 T r a n s p o r t ....................................................................................................................................... 84—88 Chapter 14 Communications, Information & Broadcasting ........ 89—90 Chapter 15 E d u c a t i o n ....................................................................................................................................... 91—98 Chapter 16 Health, Family Welfare and N u t r i t i o n .................................................................................... 99— 104 Chapter 17 Housing, Urban Development and Water Supply ....... 105—108 Chapter 18 Hill Area Development ................................................................................................................... 109—111 Chapter 19 Development o f Backward C la s s e s .............................................................................................. 112—115 Chaptor20 Social Welfare ............. 116— 117 Chapter 21 Women and Development . ........ n g —119 Chapter 22 E nvironm ent....................................................................................................................................... 120— 121 Chapter 23 Science and Technology ................................................................................................................... 122— 133 Appendix I'ables 1 to IV . ...................................................... 139 (ill) PART CHAPTER 1 OVERVIEW OF TOE ECONOMY IN THE FIRST THREE YEARS OF THE PLAN The Sixth Five Year Plan started in extremely over the first two years of the Plan, the economy difficult circumstances and had to contend with a grew at a rate of 6.5 per cent in real terms, exceeding number of unfavourable factors. The year 1979-80 the Plan annual growth rate of 5.2 per cent per witnessed a bad drought which affected agricultural annum. The year 1982-83, however, proved to be a production considerably. Foodgrain production recor­ very bad year for agriculture with severe drought, ded a heavy fall of 16.8 per cent compared to the Hoods and cyclones in different parts of the country. previous year. There was an absolute dccline in GDP However, the damage to the economy was significantly of nearly 5 per cent. As a consequence, savings and minimised, principally as a result of the public sector investment went down significantly, thereby reducing programmes, and the fall in foodgrain production the resources base of the Sixth Plan. In general, the was comparatively much lower than in previous years economy was not in a very satisfactory state and the of adverse seasonal conditions. The growth rate in functioning of the infrastruc'urc, in particular, had 1982-83 is estimated to be 2 per cent. Indus'rial been badly affected. Against this background, the growth which was 5.6 per cent in 1980-81 and 8.6 per Sixth Plan was launched with a very ambitious pro­ cent in 1981-82 fell to about 3.5 per cent in 1982-83. gramme of growth, poverty alleviation and self- The average growth rate of the economy over the first reliance. The task of recovery from the low base was three years of the Plan came to 5 per cent. This per­ made more difficult by the contemporary international formance has to be viewed in the background of a situation which was extremely unfavourable with number of growth decelerating elements prevailing heavy economic recession in most of the countries of during this period. The recession in the international the wor’d, especially in the developed countries, and situation continued, the recovery being extremely a shrinking volume of international fr?>de. The external slow. The international trade prospects also continued terms of trade in India had significantly deteriorated, to be gloomy. Between 1980-81 and 1982-83 the one of the main reasons for this bei^g the consenuential growth of international trade was almost zero. India’s effects of <he second oil mice hike. In the domestic realised volume of growth of export of 1.4— 1.5 per cent econnmv. fhe Plan effort had to contend with a high should be seen against this background. The Govern­ rate of inflation. ment’s effor's to protect the deve'opment activities of the economy were successful and the domestic rate of 1.2 An almost complete recovery of the economy inflation was significantly reduced as measured by the was achieved in 1980-81. This was due largely to the movement in the wholesale price index from the very ambitious investment programme of the Sixth Plan. high rate of nearly 18 to 20 per cent in 1980-81 to This was concentrated in all the major infrastructure around 2 ner cenf in 1982-83- sectors, which had stagnated in the years immediate'y 1.3 Additional resource mobilisation (ARM) both preceding the Sixth Plan. Indeed, in 1980-81 the bv the Cen*re and the States is likely, in the first four economy was set for a fast growth and development years of the Plan, to exceed the targets for fhe whole in alignment with the major targets of the Sixth Plan of the Sixth Plan. This represents a substantial effort and the GDP grew by 7.9 per cent. In 1981-82, almost in resource mob'lisation by the public sector. The all the sectors picked up the growth rate stipulated in respective performances are summarised in the Tab’e the Plan and the GDP went up by 5.2 per cent. Thus, 1.1 below : Table 1.1 Additional Resources Mobilisation (Rs. in crorcs) VI Plan 1980-81 1981-82 1982-83 1983-84 Total 1980—85 Actuals Actuals (Latest (Plan) 1980—84 Target Estimates May 1983) Centre 12,290 501 2,597 3,960 5,623 12,681 States 9,012 425 1,573 2,849 4,388 9,235* 21,302 926 4,170 6,809 10,011 21,916 •IncluJas State’s share in the yield from Central measures. S P C /83—2 In over-all availability of resources for the Plan, how­ slightly short of target while production of irom ore ever, there has been a heavy deficit in the States, and concentrates is likely to fa.ll appreciably shoirt of principally dire to the State E'fectricity Boards and target. State Road Transport Corporations not achieving their targets of surpluses. Increases in current expenditure 1.8 lhe production of crude oil and petroleum on the services sector, due partly to DA and wage products will be substantially in excess of the oriigmal increases, have also cut into the resources available for Plan target, as a result of the large increase in inivest- developmental outlays, both at the Centre and in the ment as compared to the Plan, decided upon w/ith a States. The mobilisation of additional external borrow­ view to quicker achievement of sel'f-reliancc in, this ings has been close to target and a prudent foreign sector.