Question

The second five year plan was based on which model?
1. Solow model
2. Domar model
3. Robinson's model
4. Mahalanobis model

Answer 1

Correct Answer - Option 4 : Mahalanobis model

The correct answer is Mahalanobis model.

• The Nehru-Mahalanobis model was adopted in the second five-year Plan.
• The main objective of this plan was rapid industrialization with particular emphasis on the development of basic and heavy industries.
• Industrial Policy of 1956 accepted the establishment of a socialistic pattern of society as the goal of economic policy.
• The main architect of this model was Prof. P.C. Mahalanobis.
• The basic strategy was, “to increase investment in heavy industries and also on expenditure on services, to increase purchasing power and create fresh demand and on other hand, to increase the supply of consumer goods by increasing investment and production as much as possible in the small and household industries to meet the new demand.”

• The estimate of the savings, investment, capital-output ratio, objectives, and short-term national income projections gives the idea that the first five-year plan was based on the model of Harrod-Domar and was set up in 1952.
• The Third Five Year Plan consists of no specific plan model. It is simply based on the different relations expressed by Prof. S. Chakravarty in his famous article, “The mathematical Framework of Third Model.”