Strategy of Planning

By strategy we mean the use of correct approach or method or formula for achieving the target under planning. In the first plan period of 1951-56, no specific strategy was adopted during this time the government of India gave more emphasis to agriculture keeping in view the fact that majority of India’s population depend on agriculture and there was the immediate issue of adequate food grain supply to address food shortage.

The first five year plan was a great success as the targeted growth rate was achieved so India was in a position to adopt a long term strategy for planning in future.

The development strategy was accordingly spelt out explicitly in the second plan period of 1956-61. The strategy was to give emphasis on:

  1. Industrialization
  2. Within industrialization more emphasis on heavy industries

Strategy of Industrialization

In order to address the problems related to poverty, unemployment, economic growth, self reliance, etc. the Indian planners adopted the strategy of industrialization in the country in general and establishing heavy and basic industries in particular.

The arguments offered in favour of industrialization and heavy industries strategy are:

1. India’s population has been over depended on agriculture resulting in crowding of rural area, pressure on land, fragmentation of land holding, underemployment and unemployment with fixed amount of land available for cultivation, more population makes the amount of per capita availability of land very small or nil.

This has resulted in inequality in distribution of land and ultimately affecting agricultural production badly. Industrialization is the only answer to shift the surplus labour engaged in agriculture to industries and release the pressure on land.

2. Industrial activities provide more job opportunities than agricultural activities. So industrialization will help getting employment for the jobless in the country.

3. Industrialization is necessary for the growth of agriculture itself. Industries use raw materials from agriculture and agriculture sector needs industrial equipment and machinery such as pump set, tractor, electricity, etc.

4. Establishment of basic and heavy industries must be given priority. Examples of basic and heavy industries are iron and steel, aluminium, heavy chemicals, heavy electrical, etc. These are capital goods industries. Every economy needs such type of industries because they procedure machinery and equipment needed to establish other industries which can produce consumer goods for the satisfaction of wants.So, the heavy industries are the backbone of the economy.

The adoption of heavy industry strategy the government of India created public sector to establish and manage such industries. Some of the examples are Steel Authority of India Limited (SAIL), Bharat Aluminium Company (BALCO), Bharat Heavy Electrical Limited (BHEL), National Aluminium Company (NALCO), etc.

5. Besides heavy and basic industries, Indian government has also given emphasis on developing the micro, small and medium industries. These industries are defined on the basis of investment limit and can be established by private individuals.

The advantage of these industries include: promotion of self employment as well as generating employment furthers, use of local resources, reducing inequality of income as they can be owned by individuals, etc.