The first 5 year plan (1951-56) was based on Harrod-Domar Model and focused on community development program, agriculture, price stability, power, and transport. It was a success because of good harvests in the ’55 and ’56. But do you think that the government is running with the five years plan? Government makes policies and plans but it never implements on them. This is a real but tragic story since long of indian govt.
What was the objective of the second 5 year plan? Many people think about the same. The second five year plan from (1956-61) focused on rapid industrialization. It is also called Mahalanobis plan named after the chief architect of this plan. How did the second 5 year plan affect the economy of India? It promoted huge imports due to which funds went empty and foreign loans had to be taken. Its main emphasis from agriculture to industry was shifted before time leading to an increase in price level by 30% compared to 13% in the first plan.
