Which of the following correctly links the concept of “commanding heights of the economy” with India's planning model post-independence?
Show answer & explanation
Correct answer: C
Explanation
Solution: The correct answer is It indicates the state ownership of key sectors such as steel, coal, and infrastructure, seen as essential for national development and security.
Explanation:
☛ The term “commanding heights of the economy” refers to strategic heavy industries, core infrastructure, and financial institutions that drive the overall growth of a nation.
☛ Post-independence, Prime Minister Jawaharlal Nehru adopted this philosophy to ensure that the Public Sector controlled vital sectors like steel, coal, heavy machinery, power, and transport.
☛ This strategy was formally integrated into India's planning framework through the Second Five-Year Plan (1956–1961), also known as the Mahalanobis Model.
☛ The objective was to build a self-reliant industrial base, prevent concentration of private economic power, and achieve a socialistic pattern of society.
Extra Exam-Relevant Facts:
☛ The phrase was originally coined by Vladimir Lenin in 1922 during the New Economic Policy (NEP) in Soviet Russia.
☛ The Industrial Policy Resolution (IPR) of 1956 classified industries into three schedules: Schedule A (exclusively state-owned), Schedule B (progressively state-owned), and Schedule C (left to the private sector under licensing).
☛ First Five-Year Plan (1951–1956): Based on the Harrod-Domar model, it focused primarily on agriculture, irrigation, and power projects.
☛ New Economic Policy of 1991: Ended the era of strict state control by introducing Liberalisation, Privatisation, and Globalisation (LPG) reforms.
Important One-Liners for Upcoming Exams:
☛ Which Five-Year Plan in India was based on the PC Mahalanobis model? → Second Five-Year Plan (1956–1961)
☛ Which industrial policy is often referred to as the 'Economic Constitution of India'? → Industrial Policy Resolution of 1956
☛ Under which Five-Year Plan were the three major public sector steel plants (Bhilai, Rourkela, Durgapur) established? → Second Five-Year Plan
☛ When was the Planning Commission of India established? → 15 March 1950
☛ Which body replaced the Planning Commission on 1 January 2015? → NITI Aayog