The Second Five-Year Plan is considered a significant milestone because it marked a pivotal shift in the development strategy of newly independent India. Unlike the First Plan, which emphasized agriculture and aimed at stabilizing the economy after years of colonial rule, the Second Plan focused on rapid industrialization and aimed to build a robust foundation for self-reliance. Inspired by the Soviet model, it was formulated under the guidance of economist P.C. Mahalanobis, leading to its association with the “Mahalanobis Model.”

The plan prioritized the development of heavy industries like steel, machinery, and transport infrastructure. This emphasis on capital goods industries was intended to create a multiplier effect, boosting ancillary industries and creating jobs. The expansion of public sector enterprises played a major role in this strategy, laying the groundwork for India’s long-term economic growth.

The Second Plan is significant because it demonstrated a commitment to transforming India from an agrarian economy to an industrial powerhouse. Despite challenges and criticisms related to resource allocation and implementation, it set the tone for future development policies. It embodied the vision of economic self-sufficiency, reduced dependence on imports, and established a blueprint for modern industrial infrastructure, crucial for India’s subsequent economic progress.