What was the targeted growth rate of the Second Five-Year Plan?

The correct answer is 0.045.

Key Points

• The Second Five-Year Plan of India targeted a growth rate of 4.5% (0.045).
• It was formulated based on the Mahalanobis Model, focusing on rapid industrialization.
• The plan covered the period from 1956 to 1961.
• It emphasized the development of heavy industries, steel plants, and infrastructure to strengthen the industrial base of the economy.
• The actual achieved growth rate during the Second Plan period was approximately 4.27%, slightly below the targeted rate.

Additional Information

• Mahalanobis Model
  • Developed by statistician P.C. Mahalanobis, this model emphasized the importance of the heavy industrial sector for long-term economic growth.
  • It advocated for a higher allocation of resources to capital goods industries, such as steel, machinery, and infrastructure.
• Five-Year Plans
  • India adopted the Five-Year Plan system in 1951 to achieve planned economic development.
  • The plans were inspired by the Soviet model of centralized economic planning.
  • The First Five-Year Plan (1951-1956) focused on agriculture, while the Second Plan shifted focus to industrialization.
• Planning Commission
  • Established in 1950, the Planning Commission was responsible for formulating and monitoring Five-Year Plans.
  • It was replaced by the NITI Aayog in 2015 under the government led by Prime Minister Narendra Modi.
• Heavy Industries
  • The Second Five-Year Plan led to the establishment of steel plants in Bhilai, Rourkela, and Durgapur with the assistance of countries like the USSR, Germany, and the UK.
  • It prioritized industries requiring high investment and long gestation periods for boosting overall economic growth.