Eighth Five Year Plan (1992-1997)
Due to political turmoil at the centre as well as the global economic changes and fiscal imbalances of the country in late 80’s , the Eighth plan could not take off in 1990. The National Development Council ratified the format of the plan. It was decided that Eighth Five Year Plan would commence on April 1, 1992 and that 1990-91 & 1991-92 have to be treated as separate Annual Plans formulated within the framework of the earlier approach to the 8th Five year Plan 1990-95.
Eighth Five Year Plan 1992-1997
Major Objectives
- Creation of employment, check population growth, and overall human development.
- Primary health facilities, Drinking Water & Vaccination in all villages
- Growth and diversification of agricultural activities
- Strengthen the basic Infrastructure.
- 8th plan was a plan for managing the transition from a centrally planned economy to market led economy through indicative planning.
- By 1992, India was a party to WTO and decision of opening of Indian Economy was taken to correct the increasing deficit and foreign Debt.
Important Points
- Plan Outlay was Rs. 798100 Crore
- Total Outlay for Public Sector : Rs. 434100 Crore (Rs. 361000 for new expense and Rs. 73100 for current expenses)
- Annual Target Growth rate: 5.6% (Achieved growth 6.7%)
- Annual growth in Agriculture and allied sector 3.5 % (achieved growth 3.9%)
- Target percapita income Growth: 3.8% (Achieved Growth 4.4%)
- Inflation in September 1991 was 16.3 % which cut down by 3.8 % in November 1997.
- Fiscal Deficit was 8.3 % in 1990-91, it was controlled and came down to 5.23 % in 1996-97.
Critical Overview
The eighth five year plan can be called a “Rao and Manmohan Plan”. This was reform period and the following took place during the reform period. In 1991, Rupee was once again devaluated. Due to the currency devaluation the Indian Rupee fell from 17.50 per dollar in 1991 to 45 per dollar in 1992. The Value of Rupee was devaluated 23%. The Government announced the new Industrial Policy whereby it delicensed most industries, reduced import tariffs, opened door for foreign direct investment, introduced a market determined exchange rate system.
The Eighth plan started in April 1992. One of the major highlight was modernization of the industries. The plan was launched with twin objectives of alleviation of poverty and unemployment. This plan period saw launching of many flagship programmes. In the 8th five year plan, growth rate achieved was 6.8% against the target of 5.6% . In the first two years the achieved growth rate was in the tune of 7.7%. Later it decreased due to a mounting pressure on Asian Economies which later culminated in the Asian Financial Crisis of 1997.
