Examine the formulation and execution of India's early economic planning. Which Five-Year Plan model famously placed heavy emphasis on rapid industrialization through capital goods industries, known as the Mahalanobis Model?

💡 Solution & Explanation

The Second Five-Year Plan, spanning from 1956 to 1961, was based on the Mahalanobis model developed by Prasanta Chandra Mahalanobis, which emphasized rapid industrialization with a primary focus on heavy capital goods industries to lay the foundation for long-term self-reliant economic growth. This contrasted with the First Five-Year Plan, which prioritized agricultural development and irrigation under the Harrod-Domar framework. The Mahalanobis strategy argued that investing in heavy industry would eventually generate higher productive capacity for consumer goods. A related planning milestone was the establishment of the Indian Statistical Institute by Mahalanobis.