Bhoodan movement started by Vinoba Bhave to persuade large landowners to surrender their surplus land voluntarily attracted much public attention, But the end results were disappointing, since the land thus surrendered was usually unproductive land.

The setting up of public sector enterprises in heavy industry was again dictated by two considerations.
1) First, at the ideological level, the government was committed to a socialistic pattern of development which involved a high degree of state control over the economy.
2) But at a more practical level, the government had to take over the responsibility for the establishment of heavy industrial units which required a very high level of investment.

1) The objectives of this socialist pattern of development were: the reduction of inequalities, elimination of exploitation, and prevention of concentration of wealth.
2) Social justice meant that all citizens would have an equal opportunity to education and employment.
3) This essentially entailed the active participation of the state in the process of development.

Thus, the new government of India was faced with the mammoth task of developing the economy, improving conditions in agriculture, widening the manufacturing sector, increasing employment and reducing poverty.

1) Agriculture was overcrowded, and the per capita income from agriculture was very low.
2) The industry sector only accounted for 13% of the total Gross Domestic Product (GDP) in 1950.
3) The Indian offices of major foreign companies were involved only in marketing and sales, and not in manufacturing.
4) The industrial sector had grown in the decades before Independence, but it was still quite small.
5) Engineering units produced machinery for cotton spinning and weaving, paper, chemicals, sugar, jute and cement. However, the sector was relatively small and did not offer significant employment opportunities.