Third Five Year Plan (1961-1966)
The first two plans developed a institutional structure to take the country on path of developed economy. Third plan for the first time rode on the wave of high expectation following overall growth of the economy of India. In this plan, India made efforts to achieve self reliance in food production and industry. However, the plan period saw a lots of political and economic problems. The Indo-China war 1962 and Indo-Pak War 1965 etc. exposed weakness of the country. These conflicts substantially shifted the focus towards defense production. Country’s morale was down due to death of Jawaharlal Nehru in 1964 and Lalbahadur Shastri soon afterwards. Further, the 1965-66 was a near famine year, and the problem became more severe due to lack of buffer stocks.
Critical Assessment of Third Five Year Plan
During the third five year plan, the country was reeling under high budget deficit. In 1966 the third plan struck because of the more and more borrowing from the International Monetary Fund. Foreign aid was cut off and there was an international pressure to devaluate the Rupee. When rupee was devalued in 1966, it had its own impacts on economy. Growth rate was targeted 5%, however achieved only 2.2%. Much of the achievement was null and void because of 36% inflation and devaluation of rupee in 1966.
Due to bitter experience, the demand for a plan holiday were raised from various sectors and the planning commission admitted that this plan was a failure. Accordingly, government declared a plan holiday for next three years and due to this, the fourth plan started in 1969. Government mobilized all available resources for stepping up food production and establishing buffer stocks to meet the contingency. In this way, the economy had so much degenerated that planning was now made annual with three annual plans to take on the short term objectives.
However, there were positive achievements also. The years 1965-66 ushered India into Green Revolution and advanced agriculture. The construction of dams continued. Many cement and fertilizer plants were also built. Punjab began producing an abundance of wheat. Many primary schools were started in rural areas. In an effort to bring democracy to the grassroots level, Panchayat elections were started and the states were given more development responsibilities. State electricity boards and state secondary education boards were formed. States were made responsible for secondary and higher education. State road transportation corporations were formed and local road building became a state responsibility.
