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.