The First Plan had a modest beginning and proposed an outlay of only Rs. 74 crores for industry and minerals and Rs. 43 crores for village and small industries. It had two important dimensions: (a) thrust on the growth of agriculture, and (b) industrial growth. The latter was based on the Harrod-Domar model.
The plan laid down the following priorities in the industrial sector: (i) Completion of the industrial units already in hand, (ii) Fuller utilization of the existing capacity of the industries, (iii) Expansion of capacity in those industries which were basic to the growth of other industries such as aluminum, cement, heavy chemicals, machine tools, etc., and (iv) Remedying the existing imbalances in the industrial structure.
As a result of it the general index of industrial production was 39 per cent during the plan, or a compound annual growth rate of 7 percent. This was no mean achievement. The progress in cotton textile and iron and steel was 28 per cent and 22 per cent respectively.
The First Plan saw the establishment of the Sindri Fertiliser Factory, Chittaranjan Locomotive Factory, Indian Telephone Industries, the Integral Coach Factory, the Cable Factory and the Penicillin Factory. Besides, it also saw the start of work on the planning for major infrastructural inputs and the establishment of many basic industries like steel, drugs, pharmaceuticals, fertilisers, machine-building, machine tools, etc.