Second Five-Year Plan (1956-1961): Development Programs part 14

 Okay, here are notes on the Development Programs discussed for the Second Five-Year Plan, based on the audio transcript:

Second Five-Year Plan (1956-1961): Development Programs

This section discusses key institutions and programs introduced during the Second Five-Year Plan period in India, following the priorities discussed previously (heavy industries, etc.).

1. Life Insurance Corporation (LIC)

   • Established: 1956.

   • Purpose: Nationalization of the life insurance business. Merged numerous private and foreign life insurance companies and provident funds operating in India.

   • Function: Provides life insurance coverage to individuals. (Mentioned as significantly developed today).

2. State Finance Corporations (SFCs)

   • Basis: SFC Act, 1951.

   • Purpose (as per Act): Mandated state governments to establish corporations to provide long-term loans to small and medium-sized industries within their states.

   • Rationale: Small and medium industries are crucial for development, job creation, and preventing wealth concentration. They require secure, long-term financial support.

   • First SFC in India: Punjab (PJSFC), established in 1953.

   • Andhra Pradesh SFC (AP SFC): Established in 1956.

   • Current Status (as of discussion):

     • Total 18 SFCs in India.

     • 17 operate under the 1951 Act.

     • 1 (Tamil Nadu) operates under a specific state act (Tamil Nadu State Industrial Investment Corporation Act).

     • Andhra Pradesh SFC still exists.

     • Telangana does not have a separate SFC; a special section within the existing AP SFC handles Telangana functions.

3. Cooperative Marketing System

   • Based on the Cooperative Societies Act, 1912.

   • Functions on the principle of cooperation ("One for all, all for one").

   • A structured system to support agricultural marketing and farmers.

   • Hierarchy & Functions:

     • Village/Mandal Level: PACS (Primary Agricultural Credit Cooperative Societies). Act as local cooperative markets.

     • District Level: DCMS (District Cooperative Marketing Societies). Work at the district level. Their main role is to purchase agricultural produce from farmers (especially if not sold in auctions) at the Minimum Support Price (MSP) to prevent losses. They also manage supply/demand within the district and operate food processing units (e.g., converting groundnuts to oil, pulses to dal) to create demand and add value.

     • State Level: Markfed (State Cooperative Marketing Federation). Receives excess produce from DCMS within the state. Redistributes produce across districts based on shortages/surpluses. Works to stabilize state-level prices. Acts as an agent for the state government (e.g., for PDS, input distribution).

     • National Level: NAFED (National Agricultural Cooperative Marketing Federation of India Ltd.). Established in 1958. It is the apex body of the cooperative marketing structure in India. Receives excess produce from state Markfeds. Redistributes produce nationally. If there is still surplus, it facilitates exports. Stabilizes national prices. Acts as an agent for the central government (e.g., for PDS, input distribution like fertilizers, pesticides, seeds, machinery at subsidized rates via the lower tiers).

   • Agricultural Markets - Types Mentioned:

     • Primary Markets (సంతలు): Village level, often weekly.

     • Secondary Markets: In small towns, permanent (e.g., vegetable markets).

     • Terminal Markets (అంతిమ మార్కెట్లు): Final markets, usually one or two per state.

     • Institutional/Regulated Markets (Market Yards): Established to ensure fair practices and prevent farmer exploitation. Auctions start at MSP. Traders bid up. If no bids, DCMS/cooperative bodies buy at MSP. Handle specific commodities (22 types mentioned currently). Maintain online markets (eNAM).

     • Cooperative Markets: Operate through PACS, DCMS, Markfed, NAFED.

   • AP Markfed: Established in 1957 (within Second Plan). Headquarters initially in Vijayawada, moved to Hyderabad in 1965. Provides marketing services for Andhra Pradesh. (TS Markfed for Telangana).

4. National Mineral Development Corporation (NMDC)

   • Established during the Second Plan period (year not specified, but likely within 1956-1961).

   • Purpose: Involved in mineral development.

   • Headquarters: Hyderabad. (Limited detail provided in audio).

5. State Bank of India (SBI) Subsidiary Banks

   • Established: 8 subsidiary banks created in 1959 (under the SBI Subsidiary Banks Act 1959 - inferred).

   • Purpose: Extend banking services to rural areas across India, where only SBI existed as a public sector bank at the time (1959).

   • Initial 8 Subsidiary Banks (1959):

     • State Bank of Hyderabad (SBH)

     • State Bank of Mysore (SBM)

     • State Bank of Patiala (SBP)

     • State Bank of Jaipur (SBJ)

     • State Bank of Bikaner (SBB)

     • State Bank of Travancore (SBT)

     • State Bank of Indore (SBIr)

     • State Bank of Saurashtra (SBS)

   • Mergers:

     • 1963: SBJ & SBB merged to form State Bank of Jaipur and Bikaner (SBJB). (Total 7 subsidiaries).

     • 2013: Bharatiya Mahila Bank (BMB) was established as an associate of SBI. (Total 8 associates including SBJB).

     • April 1, 2017: The remaining 5 original subsidiaries (SBH, SBM, SBP, SBT, SBIr) and Bharatiya Mahila Bank were merged into SBI.

   • Outcome: All subsidiary banks are now merged with SBI ("S Bank Group" / State Bank Group).

   • Reason for Mergers (post-2005): To reduce the large number of public sector banks, improve monitoring, and create stronger entities to mitigate risks from excessive competition and loan defaults by large corporates.

6. State Industrial Development Corporations (SIDCs)

   • Established: 1960 (AP SIDC).

   • Purpose: Provide long-term loans to medium and large-scale industries.

   • Distinction from SFCs: SFCs primarily target small and medium industries; SIDCs primarily target medium and large industries. (Note: the audio later mentions SIDCs also support small industries, particularly AP SIDC).

   • First SIDCs: Andhra Pradesh (AP SIDC) and Bihar (1960).

   • Additional Role (AP SIDC): Also works for the development of small industries. Provides skill training and facilitates import of goods needed by small industries.

   • Current Status: 28 SIDCs in 28 states nationwide.

   • Exam Relevance: SIDCs, SFCs, and SIDBI are involved in small industry development. IDBI (Industrial Development Bank of India) is NOT focused on small industries in this context.

7. Intensive Agricultural Development Programme (IADP)

   • Established: 1960.

   • Name: Also called "Package Programme" initially.

   • In Telugu: సాంద్ర వ్యవసాయ జిల్లాల కార్యక్రమం (Intensive Agricultural Districts Programme).

   • Rationale: Address severe food grain shortages and dependence on imports (like US wheat via PL480 in 1958). Goal was self-sufficiency in food grains.

   • Based on: Recommendations from the American Ford Foundation, which helped achieve the Green Revolution in Mexico.

   • Approach: Focus resources on select districts with high agricultural potential (good irrigation, fertile land). This was a trial run.

   • Districts Selected (7 total in 1960):

     • Rice (వరి): 4 districts - Raipur (Chhattisgarh), Shahabad (Bihar), West Godavari (AP), Thanjavur (Tamil Nadu).

     • Wheat (గోధుమ): 2 districts - Aligarh (Uttar Pradesh), Ludhiana (Punjab).

     • Jowar (జొన్న): 1 district - Pali (Rajasthan).

   • Implementation: Provided loans, quality seeds, training on modern farming techniques.

   • Outcome: Successful trial run, resulting in 20-30% increase in yield in these districts. This paved the way for future agricultural development programs.

These programs represent significant steps taken during the Second Five-Year Plan to build industrial capacity, strengthen financial systems, improve agricultural marketing, and boost food production.