India’s Economic Development: Plans, NITI Aayog, and Agriculture

Posted on Sep 17, 2025 in Business Administration and Management (BAM)

1st Five Year Plan (1951–1956)

Focus: Agriculture, irrigation, and price stability

Objective: Recover from partition and post-independence economic crisis

Result: Successful, with 3.6% growth (target was 2.1%)

2nd Five Year Plan (1956–1961)

Focus: Industrialization – heavy industries

Model: Mahalanobis model

Key Feature: Public sector-led growth

Result: Mixed, growth was 4.27%

3rd Five Year Plan (1961–1966)

Focus: Agriculture, industry, and education

Challenge: War with China (1962) and Pakistan (1965), droughts

Outcome: Plan failed; economy destabilized

Plan Holiday (1966–1969)

Due to economic crisis, three Annual Plans were implemented.

Emphasis on food production and imports.

4th Five Year Plan (1969–1974)

• Focus: Growth with stability, self-reliance
• Challenge: Bangladesh war, oil crisis
• Outcome: Inflation and fiscal issues affected success

5th Five Year Plan (1974–1979)

• Focus: Poverty removal (Garibi Hatao), self-reliance
• Rejection: Plan was discontinued by the Janata Government

The National Institution for Transforming India (NITI Aayog) was established on 1st January 2015 by the Government of India, replacing the erstwhile Planning Commission (1950–2014). It acts as the policy think tank of the Government of India and aims to foster cooperative federalism, encourage bottom-up planning, and provide strategic policy direction to achieve sustainable development goals.

Structure of NITI Aayog

Objectives of NITI Aayog

1. Promote Cooperative Federalism through structured support between Centre and States.
2. Develop Long-term Policy and Strategy frameworks.
3. Foster Innovation and Entrepreneurship via initiatives like the Atal Innovation Mission.
4. Data-Driven Decision Making through real-time monitoring and evaluation.
5. Ensure Inclusive Development by addressing regional imbalances.
6. Act as a Platform for knowledge-sharing among stakeholders.

Major Initiatives of NITI Aayog

Criticism and Challenges

No Financial Power – Limited Constitutional Backing

Over-centralization of Power

Slow Implementation

NITI Aayog represents a paradigm shift in India’s planning process—from central command and control to strategic guidance and cooperative engagement. Though still evolving, its role in promoting innovation, sustainable growth, and decentralized governance makes it a pivotal institution in India’s 21st-century development journey. With stronger execution powers and better coordination, NITI Aayog can truly become the engine of India’s transformation.

Types of Cropping Patterns in India

1. Mono Cropping

• Definition: Growing the same crop on the same land year after year.
• Example: Wheat in Punjab, rice in Tamil Nadu.
• Pros: Specialization; Cons: Soil nutrient depletion, risk of pests.

2. Multiple Cropping

• Definition: Growing more than one crop on the same piece of land in a year.
• Example: Rice → Wheat → Moong
• Purpose: Increases land productivity.

3. Mixed Cropping

• Definition: Growing two or more crops simultaneously on the same land.
• Example: Wheat + Mustard, Groundnut + Sunflower
• Benefits: Risk minimization; better land use.

4. Intercropping

• Definition: Cultivating two or more crops in the same field in a definite row pattern.
• Example: Maize + Beans
• Benefits: Efficient use of nutrients, better yield.

Nature of Indian Agriculture

1. Subsistence-Oriented:
2. Labour-Intensive:
3. Monsoon-Dependent:
4. Small and Fragmented Land Holdings:
5. Traditional Methods
6. Diverse Crop Patterns:
7. Dual Sector:

Role of Agriculture in Indian Economy

1. Contribution to GDP

2. Employment Provider

3. Source of Food Supply

4. Supply of Raw Materials

5. Market for Industrial Goods

6. Foreign Exchange Earnings

7. Poverty Alleviation and Rural Development

8. Role in Industrial Growth

The Green Revolution refers to a period of significant increase in agricultural production in India during the 1960s and 1970s, primarily due to the introduction of High-Yielding Variety (HYV) seeds, chemical fertilizers, irrigation, and modern farming techniques. It was a turning point in India’s agricultural history, transforming the country from a food-deficient to a food-surplus nation.

India faced severe food shortages during the 1950s and 60s.

Famines and dependence on PL-480 grain imports from the USA were common.

The government, with support from international agencies (e.g., FAO, Ford Foundation), launched a revolution in agriculture.

M.S. Swaminathan, known as the Father of the Green Revolution in India, led the movement.

Inspired by global success, especially in Mexico and the Philippines by Norman Borlaug.

Phases of Green Revolution

1. First Phase (1966–70s): Focus on wheat and rice; Limited to Punjab, Haryana, Western UP
2. Second Phase (1980s–90s): Spread to eastern and southern states; Slight diversification into coarse cereals, oilseeds

The Green Revolution was a landmark success in achieving food security and preventing famines in India. However, it also brought environmental and social challenges. Future agricultural growth must focus on sustainability, crop diversification, regional balance, and equity. The vision of a “Evergreen Revolution”, as advocated by Dr. M.S. Swaminathan, must combine productivity with environmental care and inclusiveness.

Foreign trade refers to the exchange of goods and services between India and other countries. It plays a crucial role in economic growth, generating employment, and earning foreign exchange. Over the years, India’s trade structure has undergone major changes in both composition (what is traded) and direction (with whom it is traded).

1. Composition of India’s Foreign Trade

This indicates the nature and type of goods and services that India imports and exports.

A. Exports: India’s export basket includes both traditional and modern goods:

B. Imports: India imports essential goods not sufficiently produced domestically:

2. Direction of India’s Foreign Trade

Direction refers to the countries or regions with which India engages in trade.

A. Major Export Destinations

B. Major Import Sources

Conclusion: India’s foreign trade has transformed from primarily agricultural and raw material exports to a diversified and sophisticated trade structure. The direction has shifted from being Western-dominated to more balanced, including Asia, Africa, and Latin America. To maintain momentum, India needs to boost manufacturing, reduce import dependence, and build strong trade partnerships.

BRICS is an acronym for Brazil, Russia, India, China, and South Africa—a group of five major emerging economies. It was formally established in 2009 (South Africa joined in 2010) with the aim of promoting peace, development, and economic cooperation among member countries. These countries together account for: About 40% of the world’s population / Over 25% of global GDP / Around 18% of global trade.

Objectives of BRICS

Promote economic cooperation among emerging economies.

Reform global financial institutions like the IMF and World Bank.

Foster inclusive development and reduce dependency on Western economies.

Encourage South-South cooperation.

Strengthen political and cultural collaboration.

1. Trade and Investment Opportunities

Increased bilateral and multilateral trade with BRICS members.

2. Access to Development Funding

New Development Bank (NDB), formerly the BRICS Bank, provides funding for development projects.

3. Geopolitical Leverage

BRICS provides India a platform to counterbalance China’s dominance.

4. Technology and Knowledge Sharing

Collaboration in agriculture, healthcare, education, and space technologies.

5. Crisis Management and Economic Stability

BRICS has initiated a Contingent Reserve Arrangement (CRA)—a financial safety net to protect member economies from currency shocks.

GATT: General Agreement on Tariffs and Trade: The General Agreement on Tariffs and Trade (GATT) was a multilateral treaty established in 1947 to promote international trade by reducing trade barriers, particularly tariffs. It laid the foundation for today’s global trade rules and was the predecessor of the World Trade Organization (WTO).

World Trade Organization (WTO): The World Trade Organization (WTO) is an international body that regulates and facilitates international trade among nations. It was established on 1st January 1995, replacing the General Agreement on Tariffs and Trade (GATT). The WTO is the only global organization dealing with the rules of trade between nations.

India has been an active member of the WTO and plays a key role, especially in representing developing nations’ interests.

OBJECTIVES: To promote free and fair trade by eliminating trade barriers.

To ensure predictable and transparent trade policies.

To administer trade agreements among member countries.

To settle trade disputes peacefully and legally.

Key Areas of Interest for India: Agricultural subsidies: India supports food security programs and minimum support prices.

TRIPS flexibility: India champions affordable access to medicines.

Service sector exports: Especially IT and business services.

Protecting small-scale industries: Against aggressive liberalization.

India’s Challenges at WTO: Pressure from developed countries to reduce farm subsidies. Disputes with other nations (e.g., India vs. US over solar panels, poultry imports). Opposition to e-commerce regulations and investment rules that could affect sovereignty.

TRIPS (Trade-Related Aspects of Intellectual Property Rights): TRIPS is a comprehensive agreement on intellectual property rights (IPR) adopted by the WTO in 1995, which sets minimum standards for the protection and enforcement of IPR among member countries.

Impact of TRIPS on India:

✅ Positive: Strengthened India’s legal framework for IPR. Boosted sectors like pharma, biotech, and IT. Attracted foreign investment due to better IP protection.

Negative: Indian pharma companies had to shift from process patents to product patents. Rise in medicine prices due to stronger patent protection. Concerns over access to affordable drugs.

TRIMS (Trade-Related Investment Measures): TRIMS is a WTO agreement that deals with rules regarding foreign investments, ensuring that they do not restrict or distort international trade.

Positive: Made India’s investment climate more transparent and globally competitive. Encouraged FDI in sectors like telecom, manufacturing, and services. Enhanced India’s image as an open economy.

Negative: India had to remove protective investment policies. Affected domestic industries and small producers. Reduced government’s control over strategic sectors.

Foreign Direct Investment (FDI):

Foreign Direct Investment (FDI) refers to investment made by a company or individual from one country into business interests in another country, typically by acquiring a lasting interest or controlling ownership (usually 10% or more) in a foreign enterprise.

FDI plays a crucial role in globalization, economic development, technology transfer, and employment generation.

Types of FDI:

FDI Routes in India

Automatic Route

Government Route