The aim of the First five year plan was to raise domestic savings for growth and help the economy resurrect itself from the trusted wreckage caused by colonial exploitation and the aftermath of partition.
The first plan created a stage for a take-off towards the rapid industrialisation of the country. It accorded the highest priority to agriculture. The First Plan rightly mentioned: “We are convinced that without substantial increases in the production of food and raw materials needed for industry it would be impossible to sustain a high tempo of industrial development”.
a. Although there was no big effort to industrialise the economy, emphasis was to build basic services like power and irrigation so that the process of industrialisation in facilitated.
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b. A total investment of about Rs. 800 crores was planned for industry, out of which investment in the public sector was to be of the order of Rs. 94 crores only.
c. Actual public sector outlay was only about Rs. 57 crores and on new projects, replacement and modernisation only Rs. 340 crores were actually spent. Thus there were shortfalls in the investment programmes.
d. Although the first five year plan, laid moderate emphasis on industry, it said that detailed planning should be attempted only for a few selected industries (notably capital goods) which India lacked and which the private sector, for one or the another reason, could not be expected to provide.
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e. Several large-scale public sector industries were established. Among them, the most important are the Sindri Fertilizer Factory; Chittarajan Locomotive Factory, Indian Telephone Industries, Bangalore; the Integral Coach Factory, Perambur and a number of other industries like petroleum refining, ship-building, manufacture of air-craft, railway wagons, penicillin, ammonium chloride, DDT etc. were established.
f. Besides these, the Hindustan Machine Tool Factory, Bangalore; Cement Factory, Churk (Mirgapur) News paint Paper, Nepanagar and Bihar Super Phosphate Factory were also completed.
g. Despite the fact that the First Plan only aimed at utilising the existing capacity to the full, the general index of industrial production recorded an increases of 39 percent with annual growth rate of 7 percent. This was no mean achievement.