7th Five Year Plan: 1985-90
A long term plan was outlined for 1985-2000 and the 7th five year plan was announced in this backdrop on November 9, 1985. This plan was started by Rajiv Gandhi government when Dr. Manmohan Singh was Deputy chairman of planning commission. The basic objectives were: Speedy development, modernization, self reliance and social justice. Seventh Plan also envisaged the continuance and expansion of the National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP) which were started in the Sixth Plan.
The 7th Five Year plan was considerably big. The outlay of Rs. 1, 80,000 Crore was not only double of the previous plan but also had a broader scope and the actual spending of Rs. 218700 Crore was 21.5% more than then plan outlay. The outlay on Rural Development was doubled in this plan.
Annual Plans: 1990-92
The unsustainable fiscal deficit of the 1980s along with the excessive external borrowing accumulated and culminated in the crisis of 1991. The Foreign exchange reserves were left a just one billion Dollars in January 1991, which was sufficient to finance three weeks’ worth of imports.
So, the country was on the brink of default on its external obligations. The immediate response of the caretaker government under Chandrasekhar was to secure an emergency loan of $2.2 billion from the International Monetary Fund by pledging 67 tons of India’s gold reserves as collateral. This triggered the wave of the national sentiments against the rulers of the country.
After assassination of Rajiv Gandhi in 1991, a nationwide sympathy wave secured the victory of the Congress. New Prime Minister was Narsimharao and his finance minister was Manmohan Singh. This new government started several reforms which are collectively called “Liberalization”. This process brought the country back on the track and after that India’s Foreign Currency reserves have never touched such a brutal low.
During the period of 1990-92, two annual plans for 1990-91 and 1991-92 were launched. They were worth Rs. 58,369.30 Crore and Rs. 64,751.20 Crore. The Eighth plan could not start because of politico-economical turmoil in the country during 1990-92.