UPSC Prelims 2019 Question:

With reference to India’s Five-Year Plans, which of the following statements is/are correct?

1. From the Second Five-Year plan, there was a determined thrust towards substitution of basic and capital good industries.
2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
3. 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.

Explanation:

• After the independence of India, a formal model of planning was adopted, and accordingly, the Planning Commission was established in 1950. One of the functions of the Planning Commission was to assess the material, capital, and human resources, and to formulate a plan for the most effective and balanced utilisation of those resources.
  
  
• The Second Five-Year Plan (1956-61) focused on the development of the public sector and rapid industrialisation. The plan followed the Mahalanobis model (an economic development model). The plan assumed a closed economy in which the main trading activity would be centred on importing capital goods. From the Second Five-Year Plan, there was a determined thrust toward the substitution of basic and capital goods industries. So, statement 1 is correct.
  
  
• The Fourth Five-Year Plan (1969-74) adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. It was based on the Gadgil formulae which was focusing on growth with stability and progress toward self-reliance. So, statement 2 is correct.
  
  
• The Fifth Five-Year Plan (1974-78) laid stress on employment generation, poverty alleviation (the slogan given was Garibi Hatao), and justice. The plan also focused on self-reliance in agricultural production and defense. This plan does not include the financial sector as an integral part for the first time. So, statement 3 is not correct.
  
  

Therefore, option (1) is the correct answer.

Subject: Economics | Planning and NITI Aayog