Which of the following statements about the second five-year plan is INCORRECT?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. The plan was based on the Keynesian Model.
The Second Five-Year Plan (1956-1961) of India was not based on the Keynesian Model; instead, it was based on the Mahalanobis Model, which emphasized heavy industrialization and capital goods production. This model was designed by Prasanta Chandra Mahalanobis, an Indian statistician.
Why is this statement incorrect?
- Keynesian Model focuses on demand-side economics, increasing consumer spending to boost the economy.
- Mahalanobis Model emphasizes capital goods and heavy industries for long-term economic growth, which is the foundation of the Second Five-Year Plan.
Why are the other statements correct?
- Rapid Industrialization of Heavy and Basic Industries – The core objective of the plan was to promote heavy industries like steel, machinery, and chemicals.
- Establishment of Industries (Electricity, Railway, Steel) – Major public sector enterprises like Bhilai Steel Plant and Durgapur Steel Plant were established during this period.
- Socialist Pattern of Society – The plan aimed to establish a socialist economy with state ownership and centralized planning, as reflected in the Industrial Policy Resolution of 1956.
Thus, the incorrect statement is that the plan was based on the Keynesian Model.