Industrial Growth in First Five Year Plan
At the time of India’s freedom, the Indian Economy exhibited the features of underdeveloped economy. Most of the industries produced consumer goods such as cotton textile, sugar, soap, leather goods etc. The intermediate products industry was small, and capital goods sector was absent. As the nation building process began, the industrial growth was witnessed.
In the first five year plan emphasis was on farm sector and also on better utilization of existing units in manufacturing sector. The plan document itself did not contemplate to industrialize the economy. Instead, the focus was on building the basic services such as power, irrigation which could facilitate industrial production. The total plan outlay on industries was Rs. 797 Crore of which public sector investment was only Rs. 94 Crore. The actual expenditure in public sector was Rs. 57 Crore only.
The overall Industrial Growth rate in first five year plan was 39% with a CAGR of 7%. This plan should be note for establishment of Sindri Fertiliser Factory, Chittaranjan Locomotive Works, Integral Coach Factory, Indian Telephone Industries and Penicillin Factory. Infrastructure for development of basic industries such as steel, drugs, pharmaceuticals, fertilisers, machine-building, machine tools, etc. was developed to some extent.