The Second Five-Year Plan programme for industrialisation was based on the Industrial Policy Resolution of 1956 which envisaged a big expansion of the public sector. This new approach utilised the model of industrial growth developed by Mahalanobis.
The total investment in the industries was Rs. 1,810 crores (Rs. 870 crores in the public sector, Rs. 675 crores in the private sector, and Rs. 265 crores in village and small industries. The plan had following priorities:
(i) Increased production of iron and steel and of heavy engineering and machine building industries;
(ii) expansion of capacity in respect of other development commodities and producer goods such as aluminum, cement, chemical, pulp, dyestuffs and phosphate fertilisers, and of essential drugs;
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(iii) modernisation and re-equipment of important national industries which have already come into existence such as jute and cotton textiles and sugar;
(iv) Fuller utilisation of existing installed paucity in industries where there are gaps bet capacity and production; and
(v) Expansion of capacity of consumer g keeping in view the requirements of common programmes and the productions target the decentralised sector of industry.
The major achievement of the plan was building up of three steel plants in the public se; (Rourkela, Bhilai and Durgapur); manufacture electrical equipment, expansion of Hindustan chine Tools, expansion of Sindri Fertiliser fact- establishment of a new fertiliser plant at Nangal further expansion of Hindustan Shipyard a Chittranjan Locomotive factory. The plan put phases on oil exploration and coal and made a begging with the development of atomic energy.
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Most of the investments in the Second were in heavy and basic industries. There was all rapid expansion of machine-building industries lit use in agriculture and transport and for such industries as chemicals, textiles, jute, cement, tea, suet flour and oil mills, paper, mining, etc. Good ogres were also recorded in the modernisation and equipment of important industries such as jute, ton textiles and sugar. Quite a number of new indium trial items, e.g., industrial boilers, were milling machines tractors, and two-wheelers etc., were also produce in large quantity.
In the sphere of village and small industries substantial progress was recorded. About 60 industrial estates comprising 1,000 small factories went set up. In respect of machine tools, sewing machines, fans, electric motors, bicycles, and hand tools, etc., the production increased from 25 to 5( per cent. Khadi, handloom and power loom cloth production increased from 1,610 million meters to 2,150 million meters.