3rd FIVE YEAR PLAN

(1961-1966)BY: SHUBHANSHU SINGHAIAMITY UNIVERSITY, RAJASTHAN

A BRIEF TO ECONOMIC PLANNING

What is Economic Planning?

It is the most systematic technique for redressing all economic ills.

Economic Planning is to make decision with respect to the use of resources.

Economic Planning is a term used to describe the long term plans of government to co-ordinate and develop the economy.

Economic planning in India was stared in 1950 is necessary for economic development and economic growth.

NEED OF ECONOMIC PLANNING Mess Poverty And Low Per Capita Income

High Rate of Growth of Population

Low Level of Literacy

Backward Technology

Social And Economic Problem Created By Partition Of Country

INTRODUCTION TO 3rd YEAR PLAN

The Third Five Year Plan seeks to give a more precise content to the social objectives of the Constitution and represents a large advance towards their realisation.

It takes account of the successes and the failures in the first two Plans and sets the tasks to be fulfilled in the perspective of development over the next fifteen years and more.

• By the beginning of the third plan, the Indian planners felt that the Indian economy had entered the “Take Off Stage”

• The first two plans had generated an institutional structure needed for rapid economic development.

• Its goal is to establish a self reliant and self generating economy.

• The Third Plan had given top priority to Agriculture.

• It also laid adequate emphasis on the development of basic industries vitally necessary for rapid economic development.

• Later the approach of the third plan was shifted from development to Defence & Development (because of Indo-China War in 1962 and Indo-Pak War in 1965)

SIZE & SECTORAL DISTRIBUTION OF FINANCIAL

OUTLAY• The total outlay was finalised to `10,400

Crores .

6300

4100

Allocation

Public SectorPrivate Sector

•But actual expenditure to public sector was ` 8577 Crores

DISTRIBUTION OF PUBLIC SECTOR OUTLAY (IN CRORES)

S.NO HEADS ACTUAL

EXPENDITURE

PERCENTAGES

1 Agriculture and community development

1,089 12.7

2 Major and minor irrigation 664 7.7

3 Power 1,252 14.6

4 Village and small industries 241 2.8

5 Organised industry and mining 1,726 20.1

6 Transport and communication 2,112 24.7

7 Social services and miscellanious 1,493 14.4

Total 8,577 100.0

OBJECTIVES OF THE PLAN

Gives more Stress to

Agriculture

Subsidies

Sufficient Help

Effective use of Country’s Resources

To increase the National Income by

5% per yearTo increase the production of Agriculture

OBJCTIVES

To expand basic industries like Steel,

Chemical etc.

Employment Generation

To establish equality among all the people of the

country

Agricultural Development & Third Year Plan

A sum of `2110 Crore allotted to Agriculture and Irrigation.

The foodgrains target was 100 million tonnes.

The third plan stressed on agriculture and improving production of wheat.

Punjab began producing an abundance of wheat.

POPULATION POLICY & THIRD PLAN

The plan stated clearly the objective of stablishing the growth of population should be the central future of planning.

The Family Planning programme has to be adopted as the principle measure.

`25 Crores allotted for the expenditure on family planning .

The programme was to be extended through “Clinical-cum-Extension” approach.

There was a arrangement of health visitors to move from house to house to impress upon the minds of married couples

It emphasize the need:for educating the people through various

mediaTo convince them to accept the norms of

the small family size.

SMALL SCALE INDUSTRIES IN THIRD PLAN

The main objectives of the small industries programme in this plan were:To improve the productivity of the workers

To enlarge the availability of institutional finance

To pay special attention to the growth of small industries in rural areas and small towns

By offering subsidies, sales rebate and sheltered markets, they were made ancillary to large scale industries

EMPLOYMENT GENERATION SCHEMES IN THIRD PLAN

The Rural Work Programme was made to generate the employment.

This programme was intended to utilise to the fullest extent the Man-power resources of the country.

It also ensures the substantial expansion in employment opportunities.

ACHIEVEMENTS

Role of the states increased and they were given more prominence.

Many primary schools had started functioning in the village areas. 

The state governments were entrusted with the responsibility of constructing roads.

Organizations formed

• Panchayats• Zila

Parishads

Green Revolutio

n

Laid Emphasi

s On

• Oil Conservation

• Irrigation• Afforestation

ACHIEVEMENTS

ACHIEVEMENTS

• There was formation of state electricity boards.

• Various bodies looking into matters related to secondary education were also formed.

• Some of the important industries for say Machine tools, Machine building, Cement, Paper & Pulp, Sugar, Cotton Textile, Coal Mining etc were expanded substantially.

Achievements

Many fertilizer &

Cement plants were

built

Decentralization

Petro-Chemical Industries

were set up

Good progress in

Import Substitution Programme

FAILURES OF THIRD YEAR PLAN

There were number of finanical difficulties

Foreign exchange crisis

Adverse weather

Chinese aggression and indo pakistan war

Annual average growth rate was just 4%[Target of 5%]

National income increased only by 12%

FAILURES OF THIRD PLAN

Agricultural production increased by only 2.8[target 5.4%]

Industrial production increased by 7.8%[Target of 11% per annum]

Fall in agricultural production from 82 million tones to 72 million tones

The brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards the Defence industry from Agriculture

PROBLEMS FACED BY THIRD PLAN

Due to the Sino Indian War, India witnessed increase in price of products. The resulting inflation was cost push in nature.

The third plan stressed on agriculture and improving production of wheat, but the brief Sino-Indian War of 1962 exposed weaknesses in the economy and shifted the focus towards the Defence industry.

CONCLUSION

The Third Plan of India accorded greatest importance to the achievement of a balanced reasonal development.

This Plan realised the need for a balanced approach and thus gave importance on of the development of Agriculture and rapid industrialisation through the promotion and development of heavy industries.

CONCLUSION The country had to face a lot of hurdles during

the plan, thus the launching of Fourth Plan was delayed by 3 Years (1966-99) three ad-hog annual plans were continued.

When the 1st five year plan was introduced people were slightly apprehensive about the success of the plan. So, when it was discovered that the 1st and the 2nd five year plans were successful, people pinned their hopes on the next five year plan but the result was disappointing.