Question

Which one of the following statements is NOT correct in the context of economic planning in India?

• A. In the investment strategy for the Second Five Year Plan, a high priority was accorded to the development of heavy capital goods industries over light industries
• B. The sectoral allocation to industry was the highest in the First Five Year Plan
• C. Plan Holiday for three years was declared after the Third Five Year Plan
• D. In each of the first ten Five Year Plan periods, the average incremental capital-output ratio (ICOR) did not exceed 10%

Hint:

The First Plan emphasized agriculture and irrigation; the Second Plan emphasized heavy industries — a shift guided by the Mahalanobis model.

Answer 1

The Correct Option is C

Step 1: Recall features of major plans.
- The First Five Year Plan focused on agriculture and irrigation.
- The Second Plan (Mahalanobis Model) emphasized heavy industry.
- The Third Plan continued industrial and infrastructure growth.
- A three-year Plan Holiday followed (1966–1969).
Step 2: Identify incorrect statement.
The First Plan’s priority was agriculture, not industry. Therefore, its allocation to industry was not the highest.
Step 3: Conclusion.
Statement (B) is incorrect.