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Kerala PSC Indian Economy Book Study Materials Page 108Book's First Page
5.22 ndian onom (xi) National Seeds Programme (NSP)— unfavourable balance of payments situation. 1983 Heavy foreign loans on which the governmental (xii) Intensive Pulses Development expenditures depended heavily during the period, Programme (IPDP)—1983 the economy failed to service.76 The Plan was not (xiii) Intensive Cotton Development laid with a strong financial strategy, which put the Programme (ICDP)—1983 economy into a crisis of unsustainable balance of payments and fiscal deficits.77 India basically tried (xiv) Khadi and Village Industries Programme to attend its growth prospects by commercial (KVIP)—1983 and other external borrowings on hard terms, (xv) Programme for Depressed Areas (PDA)— which the economy failed to sustain. In the 1983 process of liberalisation, an expansion of internal (xvi) Special Programme for Women and demand for the home market was permitted Children (SPWC)—1983 without generating equitable levels of exports and ultimately Indian imports were financed by Seventh Plan the costly external borrowings. Such an ‘inward The Plan (1985–90) emphasised on rapid looking’ fiscal policy proved to be a mistake when foodgrain production, increased employment the external aid environment for the economy was creation and productivity in general. The basic deteriorating.78 tenets of planning, i.e., growth, modernisation, self-reliance and social justice remained as the Two Annual Plans guiding principles.75 The Jawahar Rojgar Yojana The Eighth Plan (whose term would have been (JRY) was launched in 1989 with the motive 1990–95) could not take off due to the ‘fast- to create wage-employment for the rural poors. changing political situation at the Centre’.79 Some of the already existing programmes, such as The pathbreaking and restructuring-oriented the IRDP, CADP, DPAP and the DDP were re- suggestions of the Eighth Plan, the sweeping oriented. economic reforms ensuing around the world, as Till date, the government has been evaluating well as the fiscal imbalances of the late 1980s were the achievements of all the developmental the other important reasons for the delay in the programmes, courtesy the youngest PM of launch of the Eighth Plan. The new government, India. Somehow, democracy and development which assumed power at the centre in June 1991, got connected with a major change in the decided to commence the Eighth Plan for the thinking of the political elite, which decided to period 1992–97 and that the fiscals 1990–91 and go in for democratic decentralisation to promote development. It laid strong foundations for itself 76. Similar financial strategy to promote growth and development had led the Soviet Union to economic as the constitutional amendments—the 73rd and collapse via the balance of payment crisis during 74th were possible by the early 1990s. Gorbachev’s regime by 1991, as is pointed out by Jeffrey Sachs in The End of Poverty ((London: Penguin Though the economy had better growth rates Books, 2005), pp. 131–34). throughout the 1980s, specially in the latter half, 77. C. Rangarajan, Indian Economy, p. 274. yet it was at the cost of bitter fiscal imbalances. 78. Bimal Jalan in Bimal Jalan (ed.), 1992, pp. 190–191, By the end of the Plan, India had a highly op.cit. 79. his is the official version for the delay u lications 75. Planning Commission, Seventh Five Year Plan Division, India 2007 (New Delhi: Government of India, (1980–85) (New Delhi: Government of India, 1980). 2007), p. 680.