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Q70 (IAS/2019) Economy › Growth, Development, Poverty & Employment › Economic planning India Official Key

With reference to India's Five-Year Plans, which of the following statements is/are correct? 1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries. 2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. 3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan. Select the correct answer using the code given below.

Result
Your answer: —  ·  Correct: A
Explanation

The correct answer is option A (statements 1 and 2 only).

**Statement 1 is correct:** The Second Five-Year Plan laid great emphasis on the establishment of heavy industries, with the main[1] thrust of industrial development on iron and steel, heavy engineering, lignite projects, and fertiliser industries.[1] The government developed basic heavy industries for the manufacture of producer goods (capital goods) to strengthen the foundation of economic independence.[2] This clearly indicates a determined thrust towards substitution of basic and capital goods industries.

**Statement 2 is correct:** From the Fourth Plan (1969–74) the emphasis was on poverty alleviation, so that social objectives were introduced into the planning exercise.[3] It laid especial emphasis on improving the condition of the less privileged and weaker sections of society through the provisions of employment and education.[4] This demonstrates the objective of correcting concentration of wealth and economic power.

**Statement 3 is incorrect:** The documents provided do not contain any information about the financial sector being included as an integral part of the Fifth Five-Year Plan for the first time, making this claim unsupported by the available sources.

Sources
  1. [1] Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 11: Industries > Second Five-Year Plan (1956–61) > p. 2
  2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > 2nd Five Year Plan (1956 - 61) > p. 207
  3. [3] History , class XII (Tamilnadu state board 2024 ed.) > Chapter 9: Envisioning a New Socio-Economic Order > 9.4 Five Year Plans > p. 125
  4. [4] Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > Fourth Five-Year Plan (1969–74) > p. 5
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Q. With reference to India's Five-Year Plans, which of the following statements is/are correct? 1. From the Second Five-Year Plan, there was…
At a glance
Origin: Mixed / unclear origin Fairness: Moderate fairness Books / CA: 6.7/10 · 0/10
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A classic mix of static textbook knowledge (Statement 1 & 2) and logical elimination (Statement 3). Statement 1 is the definition of the Mahalanobis model found in every basic economy text. Statement 2 requires connecting the political slogan 'Garibi Hatao' and the socialist turn of the late 60s to the 4th Plan. Statement 3 is a 'chronology trap' designed to be eliminated.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Did India's Second Five-Year Plan emphasize a determined thrust toward substitution of basic and capital goods industries?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > 2nd Five Year Plan (1956 - 61) > p. 207
Presence: 5/5
“The leading economists of India were supporting the Calcutta school of thought and ultimately this model got accepted for building the 2nd Five Year Plan document. This model was, among other things, an evocation of the old nationalist model of swadeshi, or self-reliance. The government shall develop the basic heavy industries for the manufacture of producer goods (capital goods) to strengthen the foundation of economic independence. And the household sector, village and cottage industries shall focus on the production of consumption goods.”
Why this source?
  • Directly prescribes development of basic heavy industries to manufacture producer (capital) goods as part of the Plan's model.
  • Frames the industrial strategy in terms of self-reliance (swadeshi) with household/village industries focused on consumption goods and heavy industries on capital goods.
Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 11: Industries > Second Five-Year Plan (1956–61) > p. 2
Presence: 5/5
“Great emphasis was laid on the establishment of heavy industries during the Second Five-Year Plan. The second industrial policy was announced in 1956. The main thrust of industrial development was on iron and steel, heavy engineering, lignite projects, and fertiliser industries. Moreover, there was an emphasis on the expansion of existing steel plants, like Jamshedpur, Kulti-Burnpur, and Bhadravati. Three new iron and steel plants were located at Bhilai, Durgapur, and Raurkela. The Chittranjan Locomotive Workshop, the Hindustan Ship-building Yard (Vishakhapatnam), the Sindri Fertiliser Factory, and Hindustan Machine Tools Ltd. (HMT) at Bangalore were expanded. Many of the targets, however, could not be achieved because of the war with China in 1962 and the failure of monsoon over greater parts of the country.”
Why this source?
  • States great emphasis on establishment and expansion of heavy industries (iron & steel, heavy engineering, fertilisers) as the main thrust.
  • Lists concrete public-sector projects and new steel plants (Bhilai, Durgapur, Raurkela) illustrating capital-goods focus.
Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > Second Five-Year Plan (1955–56 to 1960–61) > p. 4
Presence: 5/5
“The main focus of the Second Five-Year Plan was on: • (i) rapid industrialisation and establishment of basic and heavy industries; to increase production of iron and steel, and chemical fertilisers,• (ii) an increase of 25 % in the national income,• (iii) to create more employment opportunities, and• (iv) to reduce inequalities in income and wealth.”
Why this source?
  • Identifies rapid industrialisation and establishment of basic and heavy industries as the Plan's main focus.
  • Specifies targets such as increasing production of iron, steel and chemical fertilisers consistent with capital-goods substitution.
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Statement analysis

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