WE have had ‘plan holidays’, that is, a break from five-year plans, many times before. In the late 1960s, the late 1970s and the early 1990s. The first and third were occasioned by economic crises that made extant plans impractical. The break from a five-year plan in the late 1970s (1978-80) was not referred to as a ‘plan holiday’ but as the adoption of a ‘rolling plan’. The latest plan holiday, if one can call it that, after the winding up of the Planning Commission in 2014, has lasted long and now appears to have outlived any purpose.
It is now clear that the Indian economy is stuck at a point well below its potential growth rate. Recall that after three decades (1950-80) of 3.5% growth, the economy logged 5.5% for two decades (1980-2000) and 7.5% for another decade and a half (2000-15). Even if the ‘high’ growth years (2003-09), when national income grew at close to 9.0% per annum, were an aberration that over-heated the system, generated non-performing assets and piled up debt, the fact remains that an annual average growth rate of 7.5% had come to establish itself as feasible and sustainable. The view since then has been that an annual average growth rate of 8.0% is India’s potential and sustainable growth rate.
Welcome to Civil Society's
new website!
Login to Civil Society by entering your email below
WE have had ‘plan holidays’, that is, a break from five-year plans, many times before. In the late 1960s, the late 1970s and the early 1990s. The first and third were occasioned by economic crises that made extant plans impractical. The break from a five-year plan in the late 1970s (1978-80) was not referred to as a ‘plan holiday’ but as the adoption of a ‘rolling plan’. The latest plan holiday, if one can call it that, after the winding up of the Planning Commission in 2014, has lasted long and now appears to have outlived any purpose.