Untitled Note

The First Phase (1950-1965): The First Five-year Plan did not envisage any large-scale programs for industrialization. The plan rather made an attempt to give a practical shape to the Indian economy by providing for the development of both the private and public sectors. A number of industries were set up in the public sector. Important among those were Hindustan Shipyard, Hindustan Tools, Integral Coach Factory, etc. The Second Five-Year plan accorded the highest priority to Industrialization. The plan was based on the famous Mahala Nobis Model. Mahala Nobis model set out the task of establishing basic and capital goods industries on a large scale to create a strong base for industrial development. The plan includes substantial investment in Iron and Steel, Coal, Heavy engineering, Machine building, Heavy Chemicals, and Cement Industries of basic importance. The Third Plan followed the strategy of the Second plan by establishing basic capital and producer good industries with the special emphasis on machine-building industries. As a result, the second and the third plan placed great emphasis on building up the capital goods industries. Most of the capital good industries are built under the Public Sector. The First Three-Five Year Plans are important because their aim was to build a strong industrial base in India. This first phase of Industrial development in India laid the foundation for a strong Industrial Phase. As a result, the first Three Plans witnessed a strong acceleration in the growth rate of Industrial production. The period witnessed an increase in growth rate from 5.7% to 7.2% and ultimately 9.0% in the first, second, and third plans respectively. The most important observation of the period was that the rate of growth of capital good industry, considered as the backbone of modern industrialization, grew at 9.8%, 13.1%, and 19% during the first, second, and third plans respectively.