ENVIRONMEN
T IN INDIA
MODULE III
TRADE PROBLEMS OF DEVELOPING
COUNTRIES
Primary Exporting
Unfavourable Terms of Trade
Mounting Developmental and Maintenance Imports
Higher Import Intensity
BOP Crisis
Lack of Coordination
Depleting Foreign Exchange Reserve and Import Cover
Steep Depreciation
Higher Prices of POL imports
International Liquidity Problem
WHAT IS ECONOMIC PLANNING
An economic plan is an outline of schemes
designed to achieve certain predetermined
economic objectives, in a particular order of
priorities within a specified period of time.
This is the technique that a state follows to
achieve economic development.
The economy, which makes efforts to achieve
development through economic plans, is
known as planned economy
WHAT IS ECONOMIC
PLANNING
“Economic planning is the making of major
economic decisions— by the conscious
decision of a determinate authority, on the
basis of a comprehensive survey of a
country’s existing and potential resources
and a careful study of the needs of the
people.”
H. D.
Dikinson
IMPORTANCE OF ECONOMIC
PLANNING
To attain steady economic development in a free
market economy.
To remove unemployment, poverty and inequalities
among people.
To provide infrastructural facilities such as banking,
power, water, transport and communications.
To allocate resources properly between present and
future needs.
To attain balanced regional development.
ECONOMIC PLANNING IN INDIA
In India the first systematic attempt of economic
planning was made in 1934 when M. Visvesyaryya
published his book ‘Planned Economy for India’.
8 leading industrialists of Bombay (Mumbai) submitted
the ‘Bombay Plan’ in 1943.
But in India the real beginning of Planning was made on
March 1950 when the Indian Planning Commission was
established.
In July, 1951 the Commission submitted its draft outline
of the First Five Year Plan to be effective from 195152
to 195556.
TYPES OF ECONOMIC PLANS
Perspective Plans: Perspective plan is a longterm
plan. Generally, it is formulated for a period ranging
from 15 years to 20 years.
Fiveyear Plans: Fiveyears plans as their name
indicate are designed for a period of five years.
Annual Plans: Annual plan is a part of fiveyear plan
and prepared yearwise.
Rolling Plans: Rolling plans do not have a fixed period
of time. As it moves forward the year, which was
completed, is deleted and one year is added at the end.
OBJECTIVES OF VARIOUS PLANS
Economic Development
Increased employment
SelfSufficient
Economic Stability
Social Welfare and Services
Regional Development
Comprehensive Development
To Reduce Economic Inequalities
Social Justice
Increase in standard of living
TENTH FIVE YEAR PLAN
Attain 8% GDP growth per year.
Reduction of poverty rate by 5% by 2007.
Providing gainful and highquality employment at
least to the addition to the labour force.
Reduction in gender gaps in literacy and wage rates by
at least 50% by 2007.
20point program was introduced.
Target growth: 8.1% – growth achieved: 7.7%.
The Tenth Plan was expected to follow a regional
approach rather than sectoral approach to bring down
regional inequalities.
Expenditure of ₹43,825 crore (US$6.1 billion) for tenth
five years.
GREEN REVOLUTION
In the mid and late20th century a revolution occurred
that dramatically changed the field of agriculture, and
this revolution was known as the Green Revolution.
During this time period, new chemical fertilizers and
synthetic herbicides and pesticides were created.
The chemical fertilizers made it possible to supply
crops with extra nutrients and, therefore, increase
yield.
In addition to the chemical advances highyield crops
were also developed and introduced. Multiple cropping
was also implemented during the Green Revolution
and lead to higher productivity.
GREEN REVOLUTION IN INDIA
India was facing a massive famine situation in the
1960’s. This lead to India joining the Green Revolution.
Our government chose the state of Punjab as the first
place to try the new crop due to the availability of water
for agriculture.
The primary aspect of the green revolution was double
cropping that was to grow two crops per season instead
of the earlier practice of one crop. Large irrigation
projects were set up to ensure the second crop farming
every year.
India produced new high quality yields of rice, wheat,
corn and millet which lead to the increase of grains by
millions of tonnes every year.
WHITE REVOLUTION
Verghese Kurien was the father of the White Revolution.
He founded Amul, one of the largest milk producing
companies in India.
Phase 1
This phase started in July 1970 with the objective of setting up
dairy cooperatives in 18 milk sheds in 10 states.
Phase 2
Dairy development programmes in Karnataka, Rajasthan and
Madhya Pradesh.
By the end of this phase in 1985 there were 136 milk sheds,
34,500 village dairy cooperatives and over 36 lakh members.
Phase 3
It ended in 1996 and by that time there were 73,300 dairy
cooperatives and over 9.4 million farmer members.
WHITE REVOLUTION IN INDIA
White Revolution was one of the biggest dairy development
movements, by the Indian Government, in India in 1970. It was a
step taken by the Indian Government to develop and help the
dairy industry sustain itself economically by developing a co
operative, while providing employment to the poor farmers.
The White Revolution helped increase milk productivity and milk
was now sold at competitive market prices. This program
increased the demand for development and production of healthy
animals, use of modern technology in milk production sector and
networking between various small and large scale dairy
industries.
The White Revolution followed after the success of the Green
Revolution and the aim of White Revolution was to make India one
of the largest milk producers in the world.
ADVANTAGES OF WHITE REVOLUTION
It ended the imports of milk solids in India and
India started exporting milk powder to many
foreign nations.
Dairy industries and infrastructures modernised
and expanded. Around 10 million farmers earn
their income from dairy farming.
Dairy needs are met locally.
Genetic improvement of milking animals has
increased due to cross breeding.
INDUSTRIAL POLICY 1956
A comprehensive industrial policy was
formulated in 1956.
It has following objectives:
Development of machinebuilding
industries.
Increase in rate of industrial development.
Reduction of income and wealth
inequalities.
FEATURES (1956)
Categories of Industries
Public Sector
Public cum Private Sector
Private Sector
Cottage and Small Scale industries
Concession to public sector
Balanced regional development
Training to managers
Better facilities for labour
Management in public units
Foreign Capital
FEATURES OF INDUSTRIAL POLICY 1991
Government Monopoly
Industrial Licensing Policy
Foreign Investment and Capital
Foreign Technology Agreements
Review in Public Sector Investments
Amendments to MRTP Act
National Renewal Fund to provide safety net
for labourers
MRTP ACT 1969
The Monopolies and Restrictive Trade
Practices Act (MRTP Act) was passed by
Parliament of India on 18 December 1969
and got president’s assent on December 27,
1969.
But it came into force from June 1, 1970.
It was replaced by Competition Act 2002
with effect from September 1, 2009.
The MRTP commission was replaced by
Competition Commission of India.
COMPETITION ACT 2002
On December 16, 2002, the Lok Sabha
passed a Bill to replace the MRTP Act,
1969 which was enacted to curb the
tendency to create monopoly in
commerce, trade and industry.
The Act is known as Competition Act,
2002 or Antitrust Law.
FERA
FERA was enacted in September 1973 and it
came in force from January 1, 1974.
It was amended by the Foreign Exchange
Regulation (Amendment) Act 1993 and later
in 2000, was replaced by FEMA.
FERA applied to all citizens of India, all over
India.
The idea was to regulate the foreign
payments, regulate the dealings in Foreign
Exchange & securities and conservation of
Foreign exchange for the nation.
FEMA
The Foreign Exchange Management Act (1999) or in
short FEMA has been introduced as a replacement
for earlier Foreign Exchange Regulation Act (FERA).
FEMA became an act on the 1st day of June, 2000.
A significant change that the FEMA brought with it,
was that it made all offenses regarding foreign
exchange civil offenses, as opposed to criminal
offenses as dictated by FERA.
The main objective behind the Foreign Exchange
Management Act (1999) is to consolidate and amend
the law relating to foreign exchange with the
objective of facilitating external trade and payments.
It was also formulated to promote the orderly
development and maintenance of foreign exchange
market in India.