Page 117 - DECO303_INDIAN_ECONOMY_ENGLISH

Indian Economy

Notes 7.3.1 Industries in the Second Plan (1956-61)

You must understand that the Second Five-Year Plan programme for industrialisation imagined
a big expansion of the public sector. A base of heavy industry was sought to be developed. The
real investment in the public sector on organised industry was ` 870 crore. Private sector
investment was ` 675 crore during the Second Plan period-more than envisaged in the Plan.
Likewise, investment in village and small industries was ` 265 crore (in both public and private
sectors). Taken jointly, total investment in industries was ` 1,810 crore, that is, 27 per cent of the
total investment during the Second Plan.

Did u know? The Second Five-Year Plan programme for industrialisation was based on
the Industrial Policy Resolution of 1956.
It is important to note that the industrial pattern sought to be created during the Second Plan was
conceived with relation to the following priorities:
1. enhanced production of iron and steel and of heavy engineering and machine building
industries;
2. expansion of capacity with relation to other development commodities and producer
goods like chemical pulp, aluminium, cement, dyestuffs and phosphatic fertilisers, and of
essential drugs;
3. modernisation and re-equipment of vital national industries which have already come
into existence like jute and cotton textiles and sugar;
4. fuller utilisation of prevailing installed capacity in industries where there are gaps between
capacity and production; and

5. expansion of capacity of consumer goods bearing in mind the needs of common production
programmes as well as the productions targets for the decentralised sector of industry.
During the Second Plan, a main task in industry was the construction of three steel plants in the
public sector: Bhilai Steel Plant in Madhya Pradesh, Rourkela Steel Plant in Orissa and Durgapur
Steel Plant in West Bengal. The other programmes of industrial development involved the
manufacture of electrical equipment, expansion of Hindustan Machine Tools, expansion of Sindri
Fertiliser factory and the set-up of a fertilizer plant at Nangal, additional expansion of Hindustan
Shipyard and Chittaranjan Locomotive factory. The Second Plan observed a main diversification
of the industrial spectrum. It reinforced further the programmes of development with relation
to oil exploration and coal and made a starting with the development of atomic energy.
Majority of the investments in the Second Plan were in heavy and basic industries. There was
also quick expansion of machine-building industries for use in agriculture and transport and for
these industries as paper, chemicals, cement, textile, jute, tea, sugar, flour and oil mills, mining,
etc. Good progress was also recorded in modernisation and re-equipment of vital industries
such as jute, cotton textiles and sugar. Quite a number of new industrial items were also generated
in large quantity.

Example: Tractors, industrial boilers, milling machines, motor cycles, scooters.

In the area of village and small industries, substantial progress was recorded. Nearly 60 industrial
estates consisting of 1,000 small factories were set up. The period also observed the rise of a
vigorous class of small entrepreneurs. In numerous items such as machine tools, bicycles, sewing
machines, electric motors, fans, hand tools, etc. production enhanced from 25 to 50 per cent

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