Indian History

Eigth Five Year Plan

The eighth plan was postponed by two years because of political uncertainty at the centre. The period of Eighth Five Year Plan was 1992-97. The target growth rate was 5.6% and the actual growth rate was 6.8%. Modernization of industries was a major highlight of the Eighth Plan.

Under this plan, the gradual opening of the Indian economy was undertaken to correct the burgeoning deficit and foreign debt. Meanwhile, India became a member of the World Trade Organization on 1 January 1995.The major objectives included, controlling population growth, poverty reduction, employment generation, strengthening the infrastructure, institutional building, tourism management, human resource development, involvement of Panchayati rajs, Nagar Palikas, NGOs, decentralisation and people's participation.

Energy was given priority with 26.6% of the outlay. To achieve the target of an average of 5.6% per annum, investment of 23.2% of the gross domestic product was required.The incremental capital ratio is 4.1. The saving for investment was to come from domestic sources and foreign sources, with the rate of domestic saving at 21.6% of gross domestic production and of foreign saving at 1.6% of gross domestic production.

The major concerns and suggestions of this plan are: Immediate re-definition of the state’s role in the economy, more investment in the infrastructure sector, rising non-plan expenditure and fiscal deficits need to be checked, subsidies need restructuring and refocussing; greater focus on ‘agriculture’ and other rural activities.