Successive Five Year Plans were designed to bring about a balanced economic and social development. The objectives of the plan were to achieve balanced industrialization, increased economic growth and equitable distribution of the gains achieved through high growth. In the words of First Plan:
It is no longer possible to think of development as a process merely of increasing the available supplies of material goods; it is necessary to ensure that simultaneously a steady advance is made towards realization of wider objectives such as full employment and removal of inequalities.
The Indian planners relied upon public sector investment, import substitution industrialization policy and regulating the private sector to achieve these objectives. There were policies to decide upon the magnitude, composition and direction of investment. There were controls on prices. The policies that were aimed at influencing the inter-state distribution of industries were industrial licensing, the location of public sector industries, location policies for metropolitan cities, small-scale industries location policies, the distribution and pricing policies for intermediate industrial inputs, and other government location incentives (Sekhar, 1983).
Some of the important characteristics of the Indian planning regime before 1991 can be summed up as follows.
The Indian planners emphasized the role of heavy industries and sought to develop capital goods industry as early as possible.
The plan envisaged primary role to the public sector in carrying out the economic activities.
The private sector will play a role in the economy not by the test of private profitability but in accordance with the requirements of the national plan.
There was inward orientation in the sense that whatever can be produced within the country should be produced regard less of cost factor. The technological self-reliance was emphasized.
The economic power was heavily concentrated in the hands of the Central Government. The decision to set up an industry, what industry should be established, where it should be located etc., issues were used to be solely decided by the Central Government. State governments didn't have any say on these issues. Industrial Policy Resolution 1948, Industrial Policy Resolution 1956 and Industrial Development and Regulation Act 1951 etc., signals the fact that the central government had an absolute sway over matters pertaining to the initiation and regulation of development in one of the key sectors of the economy. The Industrial Development and Regulation (IDR) Act, 1951 was the principal instrument for channeling the investment in the industrial sector in socially desired directions. The act controlled not only entry to an industry and expansion of capacity, but also technology and import content (Ahluwalia, 1991). In implementing its balanced industrial strategy the government used a wide variety of measures like industrial licensing, strict regime of import control, administered prices, MRTP Act etc., But all these controls, restrictions had an adverse impact on the entrepreneurial zealousness which in turn had a bad consequence on the general economic performance of the country. Thus the efficiency criterion was overlooked for the sake of equity. Isher Ahluwalia (1991) has listed out some of the adverse consequences of this policy regime which are as follows.(责任编辑：BUG)