The Second Five Year Plan (1955-56 to 1960- 61) was conceived in an atmosphere of economic stability. The agricultural targets fixed in the First Plan had been achieved. Price level had registered a fall and consequently, it was felt that the Indian economy had reached a stage where agriculture could be assigned a lower priority and a forward thrust made in the development of heavy and basic industries of the economy for a more rapid advance in future.

The Plan sought to promote a pattern of development which would ultimately lead to the establishment of a socialistic pattern of society in India. Its main aims were: (i) an increase of 25 per cent in the national income, (ii) rapid industrializa­tion with particular emphasis on the development of basic and heavy industries, (iii) large expansion of employment opportunities, and (iv) reduction of inequalities in income and wealth and a more even distribution of economic power.

The Plan also aimed at increasing the rate of investment from about 7 per cent of the national income to 11 per cent by 1960- 61. The Plan laid special stress on industrialization, increased production of iron and steel, heavy chemi­cals including nitrogenous fertilizers and develop­ment of heavy engineering and machine building industry.