Second Five Year Plan (1956-61)

Lesson 26 : Five Year Plans: Objectives and Achievements

Second Five Year Plan (1956-61)

The second plan was launched in an atmosphere of economic stability as the agricultural objectives fixed in the first plan had been accomplished and a fall in price level was observed. Hence the second plan shifted a focus from agriculture to industry, especially the heavy industries which could give a big push to the economy, so that it enters the take off stage. This plan sought to enhance the pattern of development which would lead to establishment of a socialistic pattern of society in India which stressed that the benefits of planned development should go more to the relatively underprivileged sections of society. The plan followed Mahalanobis model, an economic development model, named after the statistician Prasanta Chandra Mahalanobis in 1953. This plan assumed a closed economy in which the main trading activity would be centered on importing capital goods.


  • An increase of 25% in the national income.
  • Rapid industrialization with particular emphasis on the development of basic and heavy industries, such as iron and steel, heavy chemicals including nitrogenous, fertilizers, heavy engineering and machine building industry.
  • Large expansion of employment opportunities.
  • Reduction of inequalities in income and wealth, and a more even distribution of economic power.


  • Hydroelectric power projects and five steel plants at Bhilai, Durgapur, and Rourkela were established.
  • Coal production was increased.
  • More railway lines were added in the north eastern part of the country.
  • The Atomic Energy Commission was formed in 1958.
  • The Tata Institute of Fundamental Research was established as a research institute. The institute conducted several programmes to search for talented individuals.
  • A talent search and scholarship programme was started in 1957 to find talented young students to train in nuclear power work.
  • As compared to First Five Year Plan, the second Five Year Plan was a moderate success. Unfavourable monsoon in 1957-58 and 1959-60, affected agricultural production and the Suez Crisis blocked international trading, increasing commodity prices.
Last modified: Monday, 16 January 2012, 11:46 AM