The First Five Year Plan ended in March 1956. The Second Five Year Plan, 1956-1961, articulated that the approach and outlook adopted by the First Plan were “part of our common thinking”. To elaborate: “It has laid the foundations for achieving the socialist pattern of society — a social and economic order based upon the values of freedom and democracy, without caste, class and privilege, in which there will be a substantial rise in employment and production and the largest measure of social justice attainable.” This ignored the Gandhian axiom: rise in employment and production in industry could lead to mass unemployment and poverty in predominantly agrarian system. To quote:
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Rapid industrialisation and diversification of the economy is thus the core of development. But if industrialisation is to be rapid enough, the country must aim at developing basic industries and industries which make machines to make the machines needed for further development. This calls for substantial expansion in iron and steel, non-ferrous metals, coal, cement, heavy chemicals and other industries of basic importance. The limitation is, of course, the scarcity of resources and the many urgent claims on them. Nevertheless, the criterion is not merely immediate needs but the continuing and expanding needs in the coming years as development goes forward. India's known natural resources are relatively large, and in many of these fields, as in steel for instance, she is likely to have a comparative cost advantage. It is desirable to aim at proceeding farthest in the direction of developing heavy and capital goods industries which conform to this criterion. |
Continuing with the same vision Five Year and Annual Plans in India carried the idea of “development with reduction in economic and social inequality” further, with emphasis on development and amelioration of inequalities of income and wealth shifting. It was claimed that with a rise in the early years, planned development efforts led to a significant decline in poverty.
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