Third Five Year Plan in India (1961-1966)

The Third Five-Year Plan tried to balance both agricultural and industrial development. The Third Plan focused on agriculture and improving the production of rice & wheat. Considerable emphasis is being given to the development of education and other social services. The period for the Third Plan started on 1 April 1961 and ended on 31 March 1966.


  • To attain self-sufficiency in the food grains and increase the agriculture production to meet the requirements of industry and exports.
  • To secure an increase in national income of more than 5% annually. The investment pattern being designed must be capable of sustaining this growth rate during the subsequent plan periods.
  • To expand basic industries like steel, fuel, and power, chemical industries and establish machine-building capacity.
  • To ensure substantial expansion in the employment opportunities.
  • The concept of Human Resource Development was adopted for the first time in economic planning.
  • To bring a reduction in disparities in income & wealth and even more distribution of economic power.

The total proposed outlay for the Third Plan was Rs. 11600 crore, of which Rs 7500 crore was kept for the public sector. However, the actual outlay for the public sector was Rs. 8577 crore.

Key Notable Points

  • In 1962, Punjab Agriculture University (PAU) was established in Ludhiana, Punjab, for research purposes, inaugurated by Prime Minister Jawaharlal Nehru in July 1963.
  • During the Third Plan, the Bokaro Steel Plant was set up in 1964 in Jharkhand with the help of the Soviet collaboration.
  • In March 1964, the Government of India launched the Intensive Agriculture Area Programme (IAAP).
  • The objective of the IAAP was to give more emphasis to the development of scientific and progressive agriculture in an intense manner in the areas having high production potential. This program also paved the way for the Green Revolution in India.
  • In 1964, the Indian Government also launched the Intensive Cattle Development Programme (ICDP). It was started as a Special Development Program during the Third Plan, in which the Government offered a comprehensive package to the farmers with livestock to improve the cattle breed. Under the program, the farmers were taught advanced & developed methods of animal husbandry, which had a positive impact on the cattle breed and increased milk production in the country.
  • The activities of ICDP are as follow:
    • Conducting Benck Mark Survey.
    • Controlling Breed.
    • Veterinary Aid and Disease Control.
    • Dairy Extension.
  • The Intensive Cattle Development Program acted as a precursor to the White Revolution in India.
  • In July 1965, the National Dairy Development Board (NDDB) was founded under Verghese Kurien (known as the father of the White Revolution in India), with headquarters at Anand, Gujarat. NDDB initiated ‘Operation Flood‘ in 1970, which aimed to create a nationwide milk grid and increase milk production in the country.
  • During the Third Plan, the Food Corporation of India (FCI) was set up in 1965 under the Food Corporation Act of 1964. It is a statutory corporation and is run by the Indian Government. FCI acts as a procurement agency of foodgrains and maintains a satisfactory level of buffer stock of foodgrains to ensure National Food Security. It also acts as a distribution agency for foodgrains under the Public Distribution System (PDS).
  • The Third Plan also emphasized the development of education. Many primary schools started in rural areas. States were made responsible for secondary and higher education.
  • During the Third Plan, State electricity boards and state secondary education boards were set up. State road transportation corporations were formed.
  • The third Five-Year Plan adopted family planning as a national objective. The Ministry of Family Planning was set up in 1965.


  • The target growth rate in the Third Plan was 5.6%, but the actual growth rate was 2.84%.
  • Foodgrain Production during the Third Five-Year Plan was lower as compared to that of in Second Five-Year Plan. Foodgrain Production decreased from 80 million tonnes in 1961 to 72 million tonnes in 1966.
  • The National Income grew by 17% in 1966 instead of 19.5% in 1961.
  • The Per Capita Income grew at 6% in 1966 instead of 8% in 1961.
  • Industrial production fell below expectations.
  • Rupee value devalued for the first time in 1966.

Therefore, the Third Five-Year Plan was a failure in several ways. The Plan met the target only in transport, communication, and social service.

Important reasons contributing to the failure of the Third Plan

  • India fought two wars during the period of the Third Five-Year Plan.
    • In 1962, India had to fight the war with China. The Sino-Indo War 1962 weakened the economy and shifted the focus towards the defense industry.
    • In 1965-66, India fought was war with Pakistan. The war led to inflation, and priority shifted towards price stabilization.
  • India had to face a severe drought in 1965. The year 1965-66 was a near-famine year, and due to the lack of buffer stocks, the problem became more severe.
  • Another reason was the worst ever population explosion in 1960-1970.

Plan Holiday (1966-1969)

After the failure of the Third Five-Year Plan, the first Plan Holidays (1966-69) was adopted for the country’s economy to back on track. Therefore, the fourth Five-Year Plan got postponed. Instead of Fourth Plan, the Indian Government launched the three annual plans, called Plan Holidays from:

  • First Annual Plan (1966-1967).
  • Second Annual Plan (1967-68).
  • Third Annual Plan (1968-69).

These Annual Plans gave equal priority to the agriculture and industrial sectors.

Green Revolution

During the Second Annual Plan, there was Green Revolution in India. A whole new agriculture strategy involving the widespread distribution of High Yielding varieties seeds, exploitation of irrigation potential, new Hydro-technology, the extensive use of fertilizers, and soil conservation was put into action to tackle the crisis in agriculture production.

M. S. Swaminathan was known as the father of the Green Revolution in India. A US economist, Willian S. Guad, coined the term ‘Green Revolution‘ in 1968 for India when India’s wheat production increased by 12 million tonnes in a single year (1968-69).

During the Plan Holidays, the national economy absorbed the shocks given by the Third Five-Year Plan.

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