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Which of the following is popularly known as Mahalanobis Plan?
1. First Five Year Plan
2. Second Five Year Plan
3. Third Five Year Plan
4. Annual Rolling Plan

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Correct Answer - Option 2 : Second Five Year Plan

The correct answer is Second Five Year Plan.

  • Prof. P.C. Mahalanobis was a member of the Planning Commission. He prepared a growth model with which he showed that to achieve a rapid long-term rate of growth it would be essential to devote a major part of the investment outlay to build­ing of basic heavy industries. Mahalanobis's strategy of development emphasizing basic heavy industries which were adopted first of all in the Second Plan also continued to hold the stage in Indian planning right up to the Fifth Plan which was terminated by the Janata Government in March 1978, a year before its full term of five years.
  • SECOND PLAN (1956-1961)
    • Also called Mahalanobis Plan after its chief architect. 
    • Its objective was Rapid industrialization
    • Advocated huge imports which led to the emptying of the funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon.
    • During this plan, the price level increased by 30% against the decline of 13% during the first plan.

  • FIRST PLAN (1951-1956)
    • It was based on Ahasrrod-Domar Model
    • The Community Development program was launched in 1952
    • Emphasized agriculture, price stability, power, and transport.
    • It was more than a success, because of good harvest in the last two years
  • THIRD PLAN (1961-1966)
    • At its conception time, it was felt that the Indian economy has entered a take-off stage, therefore, its aim was to make India a ‘self-reliant’, and ‘self-generating economy.
    • It was realized from the experience of the first two plans that agriculture should be given the top priority to suffice the requirement of export and industry.
    • Complete failure due to unforeseen misfortune, viz. Chinese aggression (1962), Indo-Pak War (1965), Severest drought in 100 years (1965-1966).
  • THREE ANNUAL PLANS
    • The prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the annual plans
    • During these plans, a whole new agricultural strategy involving the widespread distribution of High Yielding varieties of seeds, the extensive use of fertilizers, exploitation of irrigation potential, and soil conservation was put into action to tide over the crisis in agricultural production.
    • During the annual plans, the economy basically absorbed the shocks given during the third year plan, making way for planned growth.

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