Seventh Plan

The Plan (1985–90) emphasised on rapid foodgrain production, increased employment creation and productivity in general. The basic tenets of planning, i.e., growth, modernisation, self-reliance and social justice remained as the guiding principles.75 The Jawahar Rojgar Yojana (JRY) was launched in 1989 with the motive to create wage-employment for the rural poors. Some of the already existing programmes, such as the IRDP, CADP, DPAP and the DDP were re-oriented.

Till date, the government has been evaluating the achievements of all the developmental programmes, courtesy the youngest PM of India. Somehow, democracy and development got connected with a major change in the thinking of the political elite, which decided to go in for democratic decentralisation to promote development. It laid strong foundations for itself as the constitutional amendments—the 73rd and 74th were possible by the early 1990s.

Though the economy had better growth rates throughout the 1980s,

specially in the latter half, yet it was at the cost of bitter fiscal imbalances. By the end of the Plan, India had a highly unfavourable balance of payments situation. Heavy foreign loans on which the governmental expenditures depended heavily during the period, the economy failed to service.76 The Plan was not laid with a strong financial strategy, which put the economy into a crisis of unsustainable balance of payments and fiscal deficits.77 India basically tried to attend its growth prospects by commercial and other external borrowings on hard terms, which the economy failed to sustain. In the process of liberalisation, an expansion of internal demand for the home market was permitted without generating equitable levels of exports and ultimately Indian imports were financed by the costly external borrowings. Such an ‘inward looking’ fiscal policy proved to be a mistake when the external aid environment for the economy was deteriorating.78‌‌