Planning and NITI Aayog · Five-Year Plans - objectives and models
Q1. Which sector was given top priority in India's Second Five-Year Plan?
- (a) Agriculture
- (b) Heavy industry
- (c) Services
- (d) Small-scale enterprises
Answer & solution
Answer: (b) Heavy industry
Correct Answer: Heavy industry — Option (b)
The Second Five-Year Plan (1956-61) gave top priority to Heavy Industry. About the Second Five-Year Plan (1956-61): Also known as: Nehru- Mahalanobis Plan; Duration: 1956-1961; Architect: Prof. P.C. Mahalanobis (formulated the Mahalanobis Model/Strategy); Approved by: Planning Commission under PM Jawaharlal Nehru; Top priority: Heavy industry (capital goods industries — steel, heavy engineering, heavy chemicals); Objective: Rapid industrialization with emphasis on heavy and basic industries; Key features of the Mahalanobis Model: Divided the economy into two sectors: Capital goods sector and Consumer goods sector; For long-run growth, investment in capital goods sector must be maximized; This would create machines that make machines — building India's industrial base; Heavy industries established: Bhilai Steel Plant (with Soviet Union assistance), Durgapur Steel Plant (with British assistance), Rourkela Steel Plant (with West German assistance) — all three major steel plants were set up during the 2nd Five Year Plan; Chittaranjan Locomotive Works (expanded), Heavy Engineering Corporation (Ranchi); Also set up: ONGC (Oil and Natural Gas Commission) in 1956; Life Insurance Corporation (LIC) in 1956; Difference from 1st Plan: 1st Five Year Plan (1951-56) gave priority to Agriculture (because of food shortage due to Partition); 2nd Plan shifted focus to Heavy Industry; This was the classic 'industry vs. agriculture' debate in Indian planning.
Option (a) Agriculture — Incorrect: Agriculture was the TOP PRIORITY of the FIRST Five Year Plan (1951-56), NOT the Second; the First Plan focused on agriculture and food production due to food shortages after Partition; the Second Plan (1956-61) deliberately shifted priority to Heavy Industry based on the Mahalanobis model. The candidate selected this incorrect option.
Option (c) Services — Incorrect: The Services sector was NOT the top priority of India's Second Five Year Plan; the Second Plan (1956-61) gave top priority to Heavy Industry (capital goods and basic industries); the services sector focus came much later in India's economic planning.
Option (d) Small-scale enterprises — Incorrect: Small-scale enterprises were NOT the top priority of India's Second Five Year Plan; the Second Plan focused on HEAVY and LARGE-SCALE industries (steel plants, heavy engineering, heavy chemicals); small-scale industries received attention as a secondary objective, not the primary focus.
The Second Five-Year Plan (1956-61) gave top priority to Heavy Industry. About the Second Five-Year Plan (1956-61): Also known as: Nehru- Mahalanobis Plan; Duration: 1956-1961; Architect: Prof. P.C. Mahalanobis (formulated the Mahalanobis Model/Strategy); Approved by: Planning Commission under PM Jawaharlal Nehru; Top priority: Heavy industry (capital goods industries — steel, heavy engineering, heavy chemicals); Objective: Rapid industrialization with emphasis on heavy and basic industries; Key features of the Mahalanobis Model: Divided the economy into two sectors: Capital goods sector and Consumer goods sector; For long-run growth, investment in capital goods sector must be maximized; This would create machines that make machines — building India's industrial base; Heavy industries established: Bhilai Steel Plant (with Soviet Union assistance), Durgapur Steel Plant (with British assistance), Rourkela Steel Plant (with West German assistance) — all three major steel plants were set up during the 2nd Five Year Plan; Chittaranjan Locomotive Works (expanded), Heavy Engineering Corporation (Ranchi); Also set up: ONGC (Oil and Natural Gas Commission) in 1956; Life Insurance Corporation (LIC) in 1956; Difference from 1st Plan: 1st Five Year Plan (1951-56) gave priority to Agriculture (because of food shortage due to Partition); 2nd Plan shifted focus to Heavy Industry; This was the classic 'industry vs. agriculture' debate in Indian planning.
Option (a) Agriculture — Incorrect: Agriculture was the TOP PRIORITY of the FIRST Five Year Plan (1951-56), NOT the Second; the First Plan focused on agriculture and food production due to food shortages after Partition; the Second Plan (1956-61) deliberately shifted priority to Heavy Industry based on the Mahalanobis model. The candidate selected this incorrect option.
Option (c) Services — Incorrect: The Services sector was NOT the top priority of India's Second Five Year Plan; the Second Plan (1956-61) gave top priority to Heavy Industry (capital goods and basic industries); the services sector focus came much later in India's economic planning.
Option (d) Small-scale enterprises — Incorrect: Small-scale enterprises were NOT the top priority of India's Second Five Year Plan; the Second Plan focused on HEAVY and LARGE-SCALE industries (steel plants, heavy engineering, heavy chemicals); small-scale industries received attention as a secondary objective, not the primary focus.