A country’s growth depend upon industrial sector growth. As industrial sector provide employment, modernization and prosperity.  Five year plan focus more on industrial sector. These sectors are lead by government followed by private sector. As economy did not have  fund nor can promote industrial sector at that time. So the government intervention is necessary for growth. This lead to foundation of second five year plan.

SECOND FIVE YEAR PLAN- Industrial policy resolution formed the basis of second five year plan. It classified industries in three category-

  1. Industries owned by government.
  2. Industries set up by government with some private players.
  3. Industries owned by private sector.

Second five year plan also started a system of license. License is important to start industry. Government give subsidy to industry also to get license.

SMALL-SCALE INDUSTRY- Small-scale industry given higher priority at that time. These were labour-intensive sector and provide larger employment. As these industry cannot compete with larger firms. So reservation of products for these industry were there. Lower rates of interest from banks and lower excise duty also provided to them

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