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Domestic Product not only fl uctuated
from Five Year Plan to Five Year Plan but
was also below the target set in the plan
documents (see Table 3). If one took the
average of the fi rst twenty fi ve years of
planning 1950-1975, the annual growth
rate was about 3.5%. While the economy
trudged along there was a considerable
slack in the system and more than a measure
of indiscipline in the economy the
controversial imposition of emergency
hurt the civil society but considerably
improved the implementation of economic
and other programme. The average
growth rate of GDP moved up to 5.5%
during the VI FYP and 5.8% during the
VII FYP. In the following decades thanks
to important policy changes, most notably
liberalization of controls and regulations
since 1984, and moves for integration with
global economy since the early nineties,
the Indian economy moved into a higher
trajectory of growth with a average annual
rate of growth moving up from 5.6%
during VI and VII FYP to 6.7% during
VIII FYP, reverting to 5.5% during IX
FYP before rising to 7.6% during X FYP.
The XI FYP projected an higher growth
rate, but the implementation at face the
challenges of global recession. The gradual
revival of the Indian economy has
once again revived prospects for higher
growth rates.
Assessing Growth Performance
There have however been questions on
the quality and sectoral distribution of
growth. While scholars and others have
applauded the higher growth rate of GDP
achieved in the 25 years, and have attributed
this to the policies of liberalization
and globalization one should take note of
doubts expressed in some circles whether
this is a statistical phenomenon as most of
the increases is accounted by the Service
Sector in which measurement of value can
be fl uctuating and error prone. Analyzing
the growth from the point of view of employment
generation, scholars have
pointed out that the recent years witnessed
“jobless growth”. Employment
growth fell sharply from the post reform
years from 2.6% p.a between 1983 to 1993
to 1.2% between 1993-2000, with a noticeable
fall in agricultural and organization
sector. During the 55th meeting of the
National Development Council held recently,
the Chief Ministers of various
T RANSFORMATIVE PLANNING
states pointed out the link between employment
for younger generations and
growing extremism and some argued that
it will be better if the economy grew at
seven percent and created more employment
opportunities than growing at 10%
without increasing job opportunities.
Obsession with higher rates of macro
economic growth has to be tempered with
meaningful spread of opportunities for
jobs and income across sectors of the
economy and various states.
Analysts have pointed out that economic
growth, noticeable at the macro
level has not spread evenly across the
states, with regional disparities increasing,
and that as a result successive Finance
Commissions have to provide
substantial allocations from Central Tax
Revenue to some backward states. Sociologists
have also been highlighting that
the socially and economically backward
classes people entitled to constitutional
protection have not got their due share of
benefi ts. There is a view that higher
rates of economic growth have
not contributed to balanced regional
development or equitable
growth of all sections of society.
THE INDIA ECONOMY REVIEW
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