In line with the Soviet Union's approach, India's Planning Commission adopted a system of five-year plans (FYPs). The concept is straightforward: the Indian government formulates a comprehensive document outlining its financial projections and allocations for the next five years. This entails dividing the budgets of the central and state governments into two categories: the 'non-plan' budget, which covers annual routine expenditures, and the 'plan' budget, which is allocated over the course of five years based on predetermined priorities set by the plan. By implementing a five-year plan, the government gains the advantage of being able to focus on the broader perspective and make sustained interventions in the economy for long-term development.

What is not true about the First Five Year Plan (1951-56) of independent India?

It focused on rapid industrialization.

 The draft of the First Five-Year Plan and then the actual Plan Document, released in December 1951, generated a lot of excitement in the country.

The First Five-Year Plan (1951–1956) sought to get the country’s economy out of the cycle of poverty.

K.N. Raj, a young economist involved in drafting the plan, argued that India should ‘hasten slowly’ for the first two decades as a fast rate of development might endanger democracy.

The First Five Year Plan addressed, mainly, the agrarian sector including investment in dams and irrigation.

Huge allocations were made for large-scale projects like the Bhakhra Nangal Dam.

The Plan identified the pattern of land distribution in the country as the principal obstacle to agricultural growth.

It focused on land reforms as the key to the country’s development.

(The second Five Year Plan laid emphasis on heavy industries and industrialization.)