India’s First Five Year Plan Essay

At the time of Indias first Five year Plan, the government focused primarily on the agriculture sector. A macro part of capital and technology was devoted to increasing hoidenish production. This was telling at the time and is now referred to as the green revolution. The success of this programme convinced the Indian Planning Commission to shift their system. The NM system drew inspiration from the USSR and suddenly focused on rapid industrialization in the second Five Year Plan rather than the hoidenish sector as they had done in the previous plan.The NM strategy focused on industrialisation, mostly on the idea that manufacturing industries enjoy economies of scale, maculation agricultural production would face secularly diminishing returns. The productivity of labour could as well be increased in capital intensive manufacturing industries while the unnecessary gained per labourer from agricultural production would be lower. Therefore, the available quotient for re-inves tment and the resultant fruit would be higher from basic and heavy capital industries.Major true capitalist countries like Japan, the U.S.A and the U.K took an alternate street to industrialisation called the demand-pull process. This involves starting with establishing consumer ethical industries, intermediate exhaustively industries and light engineering industries to bestow simple materials and equipment to the consumer good industries. Agricultural development would lead to the egress of consumption good industries that planning basic consumption needs such as food and article of clothing and this in turn would lead to growth in agriculture.Under this system, all the same small increases in capital invested in agriculture would increase make and employment as opposed to the large amount of investment demand for setting up heavy capital industries. This increase in agricultural growth would enhance the demand for consumer goods and gradually, basic and heavy capital i ndustries would emerge. This path ensures a self-financing system without inflationarypressures, as profits generated in the consumer goods industries would be re-invested in infrastructural industries. This could have been highly advantageous.The booming population in India, i.e. the increase labour force in the country was not accounted for due to the reputation of capital-intensive industries. The growth of the basic and heavy capital goods industries did not increase the supply of essential consumption goods for an increasingly poverty ridden population. The large investment in infrastructural industries led to an increase in monetary demand and the slow growth in the supply of consumption goods could not match it. This led to outgrowth inflationary pressures. In order to control the flow of private investment, polity makers implemented a system of licenses to ration industrial capacity betwixt the existing firms. Therefore, private investment was not profitable and thus, e fficiency, product innovations, scientific advancements and competitive pricing were foregone.It groundwork be seen that the fundamental problems of poverty and unemployment set about by India were not addressed by the N-M strategy. The neglect of agriculture prat be seen from the allocation of the total outlay that was given to this sector in the Five Year Plans that followed the first one. Only large irrigation projects were financed and therefore the Brobdingnagian majority of small, marginal and subsistence farmers were neglected.The protection that these industries were given from foreign competition do India a high cost and technologically stagnant economy. In conclusion, it can be seen that only 25% of the plan expenditure was directed towards the pastoral economy which comprised 70% of the labour force of the country. Government employees and white and grisly collar employees of public and private large-scale industries were the only people who benefited from the str ategy.