Which of the following best reflects the ideological foundation of India's Second Five Year Plan (1956–1961) and its long-term impact on industrial development?
Show answer & explanation
Correct answer: C
Explanation
Solution: The correct answer is It adopted the Mahalanobis model, prioritising heavy industrialisation and capital goods, but inadvertently led to neglect of consumer goods and inefficiencies in public sector enterprises.
Explanation:
☛ India's Second Five-Year Plan (1956–1961) was formulated under the leadership of statistician Prasanta Chandra Mahalanobis.
☛ This plan was based on the Mahalanobis Model (a two-sector/four-sector growth model), which advocated rapid industrialisation with a heavy emphasis on basic and capital goods industries (such as steel, coal, power, and machinery).
☛ The ideological goal was to establish a "socialistic pattern of society", as accepted in the 1955 Avadi session of the Indian National Congress.
☛ As a long-term consequence, prioritising the public sector and heavy industries led to a relative neglect of consumer goods and agriculture, heavy import dependence for technology, and structural inefficiencies within public sector undertakings (PSUs).
Extra Exam-Relevant Facts:
☛ Industrial Policy Resolution of 1956 (IPR 1956): Formed the economic constitution of the Second Plan, dividing industries into three schedules (A, B, and C) and granting the state a dominant role.
☛ Major Steel Plants: Three major public sector steel plants were established during this plan with foreign collaboration—Bhilai (with USSR), Rourkela (with West Germany), and Durgapur (with UK).
☛ Target vs. Actual Growth: The targeted GDP growth rate for the Second Five-Year Plan was 4.5%, while the actual achievement was around 4.27%.
☛ First Five-Year Plan (1951–1956): By contrast, was based on the Harrod-Domar Model and primarily focused on agriculture, irrigation, and power projects.
Important One-Liners for Upcoming Exams:
☛ Who is known as the 'Father of Indian Statistics'? → Prasanta Chandra Mahalanobis
☛ In which year was the Atomic Energy Commission founded under Homi J. Bhabha? → 1948 (Atomic Energy Department was created in 1954)
☛ Which Five-Year Plan faced an acute foreign exchange crisis leading to reliance on external aid? → Second Five-Year Plan
☛ The concept of 'Socialistic Pattern of Society' was officially adopted at which Congress session? → 1955 Avadi Session
☛ National Income Committee in independent India was appointed in 1949 under whose chairmanship? → P. C. Mahalanobis