"Rapid Industrialization" was the main agenda of the second five year plan. The plan was based on Mahalanobis Model which was developed by P. C. Mahalanobis. As the focus was mainly on industrial production this plan was called as Materialistic Plan. The plan was approved by NDC on 2nd May 1956. The duration of the plan was from 1st April 1956 to 31st March 1961.

Analysis of the second five year plan:

  • Chairman: Pandit Jawaharlal Nehru 
  • Vice Chairman: T. T. Krushnammachari 
  • During the first five year plan the agricultural production grew at higher rates and at the time of second plan the monsoon was also good. It provided base of investment in industrial sector. This plan mainly targeted two sections i.e. Industry and transportation.
  • The total public sector expenditure was estimated at Rs. 4800 crore but the real expenditure took place was Rs. 4600 crore. The distribution of expenditure was as follows: 20% on agriculture, 10% on energy, 24% on industry, 28% on transportation and 18% on social services.
  • The general level of prices increased during this plan.
  • Target for food grains production was 80.5 mn tonnes and the actual production was 79.7 mn tonnes. 
  • Total national production grew at 19.5%
  • The GDP growth rate target was 4.5% and actual growth rate achieved was 4.2%. 

Some Important political events during the period of the second five year plan:

  • In 1956 a war was broke out between Egypt and Britain (Sinai war) over the dispute of ownership of Suez canal. This war affected India's foreign trade adversely. 
  • According to Bombay Re-organisation Act two new states Maharashtra and Gujarat were created on 1st May 1960. 

Developmental work and achievements of the second five year plan:

  • Life Insurance Corporation of India (LIC) was established on 1st September 1956.
  • Native share and Stock Brokers' Association was authenticated and renamed as Bombay Stock Exchange (BSE) on 31st August 1957.
  • Second Industrial policy was declared on 30th April 1956.
  • Atomic Energy Commission of India was set up on 1st March 1958. Dr. Homi Bhabha was the first chairman of this commission.
  • In 1955 Russia and India signed a pact under which Bhilai Steel Plant was set up in Dalli-Rajhara region in Chhatisgarh. 
  • In 1958 with the help of Germany another steel plant was set up in Rurkela region in Orisa. 
  • Another steel plant was set up at Durgapur in West Bengol.
  • In 1961 Nangal Fertilizer Factory was set up in Nangal region of Punjab.  
Posted By

Prabhat Sir