The Eighth Five Year Plan (1992-1997) was formulated after a period of political instability which gripped the country for two years after the completion of the Seventh Five Year Plan. In 1991, the country faced a major foreign exchange crisis which made the economic position of the country very vulnerable. As a result of this instability in the country, there were two Annual Plans for 1992 and 1993. P.V.Narasimha Rao was the Prime Minister for a major part of the the Eighth Five Year Plan. The overall public sector plan outlay during the Eighth Five Year Plan (1992-97) amounted to Rs. 4,34,100 crores at 1991-92 prices. The share of the Central Plan in this amount was Rs. 2,47,865 crores, or 57.1 per cent, whereas the share of State Plans accounted for Rs. 1,79,985 crore, or 41.5%. The Plans of the Union Territories accounted for the remaining share of Rs. 6,250 crores, or 1.4 per cent of the overall Eighth Plan Public Sector outlay. Measures such as privatisation and liberalisation which were to have a far reaching impact later were introduced during the Eighth Five Year Plan. India also became a member of the World Trade Organisation (WTO) during this Plan period. The main aim of the Eighth Five Year Plan was to modernise the industrial sector through modern technology. The Eighth Five Year Plan also saw the opening up of the Indian economy to counter the foreign debt burden which was a major threat for the country. The Eighth Five Year Plan took major initiatives to increase the rate of employment and reduce poverty. The Eighth Five Year Plan can be termed the ‘Rao and Manmohan model’ of economic development.
The main objective of the Eighth Five Year Plan was to generate employment and modernise the industrial sector. Other objectives which constituted the Eighth Five Year Plan were as follows:
- Prioritising of specific sectors requiring immediate investment.
- Generation of full scale employment.
- Population control.
- Elementary education to reduce illiteracy.
- Emphasis on the role of private initiative in industrial development.
- Promoting social welfare measures for better health care and improved sanitation.
- Increase in exports with self sufficiency in the field of agriculture and other products.
- Improvement in the field of agriculture.
- Creating opportunities for the common people to involve themselves in various developmental activities.
Main Focus of the Plan Employment & Modernisation
The prime focus of the Eighth Five Year Plan was to implement plans and policies which would help in attaining objectives like modernisation of the industrial sector, increase the rate of employment in the country, reduce poverty and improve self-reliance on domestic resources. In addition, the Eighth Five Year Plan also focused on human resource development based on the reasoning that healthy and educated people could contribute more effectively to economic growth. Most important, the Eighth Five Year Plan marked the beginning of privatisation and liberalisation of the economy in the country.
- Increase in rural jobs related to agriculture.
- Remunerative employment for unskilled and landless labourers.
- Public awareness by involving common people in training programmes.
- Development of wasteland for farm forestry to protect the environment.
- Compulsory education for children within the age group of 10-15 years.
- Fiscal reforms and policies to stop the depletion of foreign exchange resources.
- Emphasis on autonomy and efficiency induced by competition from international economies.
- Diversified industrial and service structure to achieve self sufficiency in food production.
- The target growth for the Eighth Five Year Plan was taken as 5.6 per cent but by the end of the Plan, they achieved an actual growth rate of 6.78 per cent, higher than that of the target.
- Increase in the rate of employment.
- Reduction in the poverty rate.
- The Gross Domestic Product (GDP) rate increased from 5.7 per cent to 6.5 per cent.
- The inflation rate rose from 6.7 per cent to 8.7 per cent.
- The rate of growth in the agriculture sector increased from 3 per cent to 4.8 per cent.