The five year plans

Like the Soviet Union, India chose to plan in five year plans. Each plan set out how much the government would earn and spend over the next five years, and on what.

The government's budget was split into two parts:

• the non-plan budget: routine yearly spending, like salaries and running offices;
• the plan budget: spent over five years on the priorities set by the plan.

Why five years? A five-year plan lets the government look at the larger picture and make long-term investments, like dams and steel plants that take years to build. Yearly budgets alone would favour short-term needs.

Planning caught the public imagination:

• The draft of the First Five Year Plan (released in December 1951) was widely debated by academics, journalists, government officials, industrialists, farmers and politicians.
• Excitement peaked with the Second Five Year Plan in 1956, which promised rapid industrialisation.

By 1966, the novelty had faded. War with Pakistan (1965), droughts and an economic crisis made it impossible to start the Fourth Plan on time. The government took a 'plan holiday' (1966–69), with yearly plans instead. Planning then resumed, but with less faith and excitement than before.

So the five year plans gave India a way to think ahead, five years at a time, but they depended on good harvests and peace to work.