Previous Year Question
With reference to India’s Five-Year Plans, which of the following statements are correct?
From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital-goods industries.
The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.
Select the correct answer using the code given below:
1 and 2 only
2 only
3 only
1, 2 and 3
Correct Answer: A
Detailed Solution
Statement 1 is correct.
The Second Five-Year Plan covered the period from 1956 to 1961. Its development approach was influenced by the strategy formulated by P. C. Mahalanobis. It accorded priority to heavy industries, basic industries and the domestic production of capital goods.
The objective was to reduce India’s dependence on imported capital goods such as machinery and industrial equipment. Public investment was consequently expanded in iron and steel, heavy machinery, engineering, coal, electricity and chemicals.
The steel plants at Bhilai, Rourkela and Durgapur were prominent examples of this industrialisation strategy. There was thus a determined thrust towards import substitution in basic and capital goods.
Statement 2 is correct.
The Fourth Five-Year Plan operated from 1969 to 1974. Its principal objectives included growth with stability and the progressive achievement of self-reliance.
The Plan recognised that the earlier pattern of development had contributed to the concentration of income, wealth and economic power. It therefore emphasised a more equitable distribution of the benefits of development, improvement in the position of weaker sections and control over monopolistic tendencies.
The nationalisation of major commercial banks in 1969 was also associated with the broader policy of directing financial resources towards priority sectors, agriculture, small industries and less-developed regions.
Statement 3 is incorrect.
The financial sector was not included as an integral component of planning for the first time under the Fifth Five-Year Plan. The Fourth Plan had already connected the role of banking and financial institutions more explicitly with planned development and social priorities.
The Fifth Five-Year Plan was formulated for the period from 1974 to 1979. Its principal objectives were the removal of poverty—Garibi Hatao—and the attainment of self-reliance. Therefore, the statement concerning the first inclusion of the financial sector as an integral part of the Plan is incorrect.