Which sector saw the largest increase in its GDP share from 1950-90 due to planning and public sector investment?
Show answer & explanation
Correct answer: C
Explanation
Solution: The correct answer is Industry.
Explanation:
☛ During the planning era from 1950 to 1990, India adopted a state-led development model emphasizing heavy industries and public sector enterprises.
☛ According to NCERT (Indian Economic Development), the share of the industrial sector in India's GDP increased significantly from 13% in 1950–51 to 24.6% in 1990–91.
☛ This structural shift was driven primarily by the Second Five-Year Plan (1956–61), also known as the Mahalanobis Model, which prioritized basic and capital goods industries.
☛ In contrast, the share of agriculture in GDP declined sharply from about 67.5% in 1950–51 to 34.9% in 1990–91, marking significant industrial progress.
Extra Exam-Relevant Facts:
☛ Industrial Policy Resolution (IPR) 1956: Formed the basis of the Second Five-Year Plan and classified industries into three categories, giving the public sector a leading role.
☛ Services Sector: Expanded steadily during this period, but experienced its fastest post-reform boom after the 1991 New Economic Policy.
☛ Agriculture Sector: Although its contribution to GDP declined from 1950 to 1990, the proportion of the workforce dependent on agriculture remained very high at around 65% in 1990.
☛ Import Substitution: India's industrial strategy between 1950 and 1990 heavily relied on inward-looking trade strategy to protect domestic industries using tariffs and quotas.
Important One-Liners for Upcoming Exams:
☛ Which Five-Year Plan was based on the rapid industrialization strategy of P.C. Mahalanobis? → Second Five-Year Plan (1956–1961)
☛ What was the primary goal of the Industrial Policy Resolution of 1956? → Establishing a socialist pattern of society through state control of key industries
☛ What term describes the protection of domestic industries by replacing foreign imports with domestic production? → Import Substitution
☛ Which major policy enacted in 1969 aimed to prevent the concentration of economic power in private hands? → Monopolies and Restrictive Trade Practices (MRTP) Act
☛ Who is widely known as the 'Father of Indian Planning'? → M. Visvesvaraya