First Five Year Plan
The First Five-year Plan was launched in 1951 which mainly focused in development of the primary sector. The period of first five year plan was 1951–56.It was based on the Harrod–Domar model with few modifications. The target growth rate was 2.1% annual gross domestic product (GDP) growth; Achieved growth rate was 3.6%. Net domestic product went up by 15%. The plan was quasi successful for the government.
The most important feature of this phase was active role of state in all economic sectors. Such a role was justified at that time because immediately after independence, India was facing basic problems—deficiency of capital and low capacity to save.
Highest priority was given to agriculture including irrigation and power projectss due to the problems of large scale foodgrains import in 1951 and the pressure of price rise.The monsoon was good and there were relatively high crop yields, boosting exchange reserves and the per capita income, which increased by 8%.
National income increased more than the per capita income due to rapid population growth. Many irrigation projects were initiated during this period, including the Bhakra, Hirakud and Damodar Valley dams. The World Health Organization (WHO), with the Indian government, addressed children's health and reduced infant mortality, indirectly contributing to population growth.
Atomic Energy Commission of India was established. At the end of the plan period in 1956, five Indian Institutes of Technology (IITs) were started as major technical institutions. The University Grants Commission (UGC) was set up to take care of funding and take measures to strengthen the higher education in the country.
Contracts were signed to start five steel plants, which came into existence in the middle of the Second Five-Year Plan. About 44.6 per cent of the plan outlay was allocated to the public sector undertakings (PSUs). The total planned budget of Rs.2069 crore(2378 crore later) was allocated to seven broad areas:
irrigation and energy (27.2%),
agriculture and community development (17.4%),
transport and communications (24%),
industry (8.4%), social services (16.64%),
land rehabilitation (4.1%),
other sectors and services (2.5%).