2nd five year plan of india

8/8/2019 2nd Five Year Plan of India

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Presented by:

Suria Unnikrishnan

Roll No: 1020948


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The First Five Year Plan ended in March 1956.

It has laid the foundations for achieving the socialist pattern ofsociety.

National income over the five years has increased by some 18 percent.

Food grains production has gone up by 20 per cent; the output ofcotton and of major oilseeds has shown an improvement of 45 and8 per cent respectively.

Over 6 million acres of land have been brought under irrigationthrough major works.

Industrial production has increased steady.

Although construction work in respect of iron and steel and heavyelectrical equipment could not be commenced in the plan period,the preliminary work in connection with the installation of threesteel plants and the heavy electrical plant has been completed.

On the whole, the results of the plan have been satisfactory.


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In April 1954, the Planning Commission requestedState Governments to arrange for the preparationof district and village plans, especially in relationto agricultural production, rural industries and co-operation.

In March 1955, the results of the studies conductedon the technical and statistical problems relating tonational planning were brought together in

Professor P. C. Mahalanobis's 'DraftRecommendations for the Formulation of the

Second Five Year Plan' (referred to as the 'plan-frame').


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JAWAHARLAL

EHRU- PRIME

MINISTERAND

CHAIRMAN

GULZARILAL

NANDA-

MEMBER

V T

KRISHNAMACHARI-

FINANCE MINISTER

ANDDEPUTY

CHAIRMAN

PLANNING

COMMISSION

MEMBERS


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Prasanta Chandra Mahalanobis was born on 29 June 1893 inCalcutta.

Mahalanobis was the pioneer of survey sampling techniques anddeveloped the Mahalanobis model for the 2nd five year plan.

The plan attempted to determine the optimal allocation of

investment between productive sectors in order to maximise long-run economic growth .

The plan assumed a closed economy in which the main tradingactivity would be centred on importing capital goods.

Soon after Independence he was appointed statistical advisor tothe newly formed cabinet.

He drafted Indias Second Five Year Plan in 1955 whichenvisaged rapid industrialisation to eliminate unemployment.

He recommended large investments in heavy industries and steelfactories.

MAXIMUM RETURNS ON A LONG TERM BASIS


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Increase innationalincome

Increaseemploymentopportunitie

s

Rapidindustrializ

-ation

Reduceincome

inequalities


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Of the total expenditure of Rs.4,800 crores, roughlyRs.3,800 crores represents investment(expenditure on

building up of productive assets) and Rs. 1,000 crores iswhat may broadly be called current developmentalexpenditure.

This money has been distributed under the second five yearplan in India for the development of various sectors. Theyare:

1. Mining and industry

2. Community and agriculture development

3. Power and irrigation4. Social services

5. Communications and transport

6. Miscellaneous


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Particulars Investment outlay Current outlay

Agric lt r 33 3

Nati al Ext si &

C mm it

Devel pment

57 7

Irrigati n & Power 63 5

Irrigation & Flood

Control

5 3

Power 7

LargeandMedi m

Industries andMining

67

Villageand Small-scale

Industries

Transport and

Communications

.335 5

Social Services 55

Total 3

INRs. CRORES


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National income rose to 19.5%.

Per captia income rose to 7%.

Industrial production rose to 7%.

3 steel plants under the public sector were setup atDurgapur, Bhilai, Rourkela.

Considerable increase in the production of coal.

North eastern part of India got a number of railway

lines. Atomic Energy Commission was set up in 1957.

Tata Institute Of Fundamental Research was setup to

provide several programmes for talented individuals.


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It is a Soviet type plan.

Reduce the agricultural investment and increase the industrialinvestment(especially the heavy industry like steel) .

A rapid increase in the cloth production was deliberately held backby the government in order to support the small handloom

industries (social objective).Working at home or near home would be less fatiguing because the

workers will be able to take rest soon and when necessary.Household and family life would not be disturbed (keepinginto account Indias social and cultural traditions).

1.Mill owners have not been able to increase theirproduction significantly.

2.Unable to meet the domestic demand.


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India has put a proposition to produce machinery

for 5 steel plants in breeding of heavy industry.

The long term goal is to feed the heavy investment

program and make economy viable by increasingthe export earnings.

1.Absorption of tremendous amounts of limited

investment funds.

2.Disproportionate dependence on deficit financing

3.Inflation risks


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Reserves randownextremel fast- 15

million pounds ina ear and in t eearl

1957, Indiawas left wit 35 million pounds.

Balanceof payment crisis Ina raceagainst t e main competitor C ina,

t e fundamental questionwas

How will India finance the enormous debt

incurring at this time?


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Second Five Year Plan showed a moderate success.

It projected towards the agriculture programs and to meet the raw

material needs of industry, besides covering the food needs of the

increasing population.

The Industrial Policy of 1956 was socialistic in nature. The planaimed at 25% increase in national income.

The second five year plan provided for a larger emphasis on basic

education, expansion of elementary education, diversification of

secondary education, improvement of standards of college and

university education, on improving the health standards andpromoted family planning and welfare of the backward classes.

Agricultural production was greatly affected by the un favourable

monsoon in 1957-58 and 1959-60 and also the Suez crisis blocked

International Trading increasing commodity prices.

2nd five year plan of india

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