CA Foundation · Business Economics · Indian Economy
Which of the following correctly describes the First Five Year Plan of India (1951-56), which was based on the Harrod-Domar model?
The First Five Year Plan, based on the Harrod-Domar model, gave top priority to agriculture, irrigation and power to restore the economy after Partition and food shortages. Heavy industry priority belongs to the Second Plan, and market reforms came after 1991.
- AIt gave highest priority to agriculture, including irrigation and power, to correct imbalances left by Partition and the warCorrect
- BIt gave highest priority to heavy industries such as steel and machine building
- CIt focused on removing poverty through the 20-Point Programme
- DIt introduced market-based reforms and reduced licensing
Explanation
The First Plan was based on the Harrod-Domar model and prioritised agriculture, irrigation and power, as food shortages and Partition had disrupted the economy. Heavy industry was the thrust of the Second Plan, so option 2 is wrong. Poverty-focused programmes and market reforms came much later.
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