THE THIRD PLAN IN OUTLINE
PHYSICAL TARGETS THE principal aims of the Third Five Year Plan have been set out in the preceding Chapter. if these aims are to be achieved, it is essen- tial that a certain minimum development should take place in different sectors of the economy during the next five-year period. he physical targets of the Third Plan have been formulated keeping these minimum needs in view. A detailed list of these targets is given in Annexure I to this Chapter. It is estimated that national income should go up by about 30 per cent and per capita income by about 17 per cent over the next five years. A few selected targets are included in the Table below with the object of giving a synoptic view of the Plan :
Table 1 : Selected targets
Item unit 1960-61 1965-66 percentage
increase in
1965-66 over
1960-61
index number of agri-
cultural production 1949-50 = 100 135 176 30
foodgrains production million tons 76 100 32
nitrogenous fertilisers
consumed 000 tons of N 230 1000 335
area irrigated net
(total) million acres 70 90 29
cooperative movement :
advances to farmers Rs. crores 200 530 165
index number of indu-
strial production 1950-51 = 100 194 329 70
production of :
steel ingots million tons 3.5 9.02 163
aluminium 000 tons 18.5 80 332
machine tools value in
(graded) Rs. crores 5.5 30.0 445
sulphuric acid 000 tons 363 1500 313
petroleum products million tons 5.7 9.9 70
cloth :
mill made million yards 5127 5800 13
handloom, powerloom
and khadi million yards 2349 3500 49
total million yards 7476 9300 24
minerals:
iron ore million tons 10.7 30.0 180
coal million tons 54.6 97.0 76
exports Rs. crores 645 850 32
power: installed
capacity million kW 5.7 12.7 123
railways : freight
carried million tons 154 245 59
road transport :
commercial
vehicles on road 000 numbers 210 365 74
shipping : tonnage lakh GRT 9.0 10.9 21
general education :
students in schools million numbers 43.5 63.9 47
technical education :
engineering and technology-
degree level intake 000 numbers 13.9 19.1 37
health
hospital beds 000 numbers 186 240 29
doctors practicing 000 numbers 70 81 16
consumption levels
food calories per
capita per day 2100 2300 10
cloth yards per capita 15.5 17.2 11
per annum.
30
THE THIRD PLAN IN OUT LINE 31
PHYSICAL PROGRAMMES 2. The increase in population, the growing expectations of the people and the urgent need for attaining the stage of self-sustained growth over the next two or three Plan periods make it essential that there should be every possible effort to achieve these targets during the next five years. In addition, certain measures must be taken during the Third Plan period itself in preparation for the Fourth Plan. The physical. programmes included in the Third Plan have been formulated with both these objectives in view. The total cost of completing all these programmes exceeds Rs. 8000 crores for the public sector, and is estimated at Rs. 4100 crores* for the private sector.
3. It is important that programmes for industrial development, including power, transport, technical education and scientific re- search, should proceed in a connected manner in accordance with an approved scheme of priorities so that. as the requisite foreign ex- change and personnel become available, corresponding internal re- sources are also found and rapid progress is assured, In fields like agriculture, small industries and social services, where there is scone for attracting a great deal of local community effort and public participation and where imported supplies are not a limiting factor, the effort has to be related to the maximum physical capacity for implementation and should not fall below the minimum needs of the country. In fact, as the productive projects in the industrial and agricultural sectors are implemented and additional output becomes available, it should be possible to raise additional resources for expanding the scope of some of the projects which have large employ- ment potential but do not require much foreign exchange outlay.
4. These considerations suggest that the physical programmes to be accepted for implementation over the five year period should not be altogether limited by the financial resources immediately in sight at the stage of drawing up the Plan, although the outlays have necessari- ly to be regulated with reference to the resources actually mobilised from year to year. Past experience has shown that if a Plan for a five-year period is prepared only in terms of the financial resources in sight at the time of the preparation of the Plan, the fullest use cannot be made of all the opportunities which present themselves in the course of the implementation of the Plan.
FINANCIAL PROVISIONS 5. The estimate of financial resources has been placed for the present at Rs. 7500 crores. Recent studies, however, indicate that there are Possibilities of raising additional resources if certain measures are taken for mobilising the savings of the country. In fact, to the extent that the physical targets included in the Plan are achieved, the prospects of raising additional financial resources will correspondingly improve. As a result of the support which India's development plans are receiving from friendly countries and from the International Bank of Reconstruction and Development and other inter- national agencies, there is reason to hone that the shortage of for- eign exchange may not be a major impediment in the realisation of the goals of the Third Plan. On the other hand, as the Plan proceeds, it may be found that some of the projects approved for implementation may not be completed within the Third Plan period, and a part of the investment may in fact be deferred to the early phase of the Fourth Plan. A considerable proportion of the projects, especially in indus- try and mining, have relatively long gestation periods and frequently involve difficult technical problems. Delays in designing and setting up industrial plants or undertaking complementary development or in securing equipment and components may well extend the period of completion of some of these projects beyond the Third Plan. Whatever the consequential adjustments, special care would. however. be taken to ensure that projects which are essential for achieving the key targets included in the Third Plan are completed in time.
6. The following Table gives the distribution of the financial outlay of Rs. 7500 crores under major heads :
Table 2: Financial provisions
(Rs. crores)
Head Second plan Third plan-financial provisions
total perce- States Union Centre total perce-
expen- ntage Terri- ntage
diture tories
agriculture and
community
development 530 11 919 24 125 1068 14
major and medium
irrigation 420 9 630 2 18 650 9
power 445 10 880 23 109 1012 13
village and small
industries 175 4 137 4 123 264 4
organised industry
and minerals. 900 20 70 neg 1450 1520 20
transport and
communications 1300 28 226 35 1225 1486 20
social service
and miscellaneous 830 18 863 87 350 17
inventories - - - - 200 200 3
total 4600 100 3725@ 175 3600 7500 100
* This excludes the estimated transfer of Rs. 200 crores from the public to the pri- vate sector
32 THIRD FIVE YEAR PLAN
out of the total financial outlay of Rs. 7500 crores in the public sector, investment* is estimated at Rs. 6300 crores and current outlay,'" representing expenditure on staff, subsidies, etc. at Rs. 1200 crores. These figures include only that part of the expenditure on development programmes of local bodies Eke municipalities panchayats, etc. as is financed by Central and State Governments as part of their Plan expenditure. They do not include the contributions which these local bodies make out of their own resources. Similarly they do not include the contributions in cash or in kind which are made by the local people in projects of a local character involving local participation. Expenditure on development services and institutions established upto the end of the Second Plan, estimated at about Rs. 3000 crores for the five year period, falls outside the Third Plan outlays shown in Table 2.
7. In the Table above, the financial provision for the States is shown as Rs. 3725 crores. As against this the total cost of the physical programmes included in State plans amounts to Rs. 3847 crores. The revenues of States have, however, recently shown marked improvement. it is considered that given the necessary additional taxation, States should find it possible to finance fully the physical programmes included in their plans. Thus the gap between physical programmes and financial resources such as it may be, relates mainly to the centre. In the programmes of the Central Government those dependent on external resources constitute a, large proportion, for instance, industries, minerals. transport and communications. As foreign exchange becomes available, necessary steps will have to be taken to raise the requisite rupee resources.
8. As has been mentioned earlier, the Plan includes outlays not only by the public sector but also by the private sector. Investment by the private sector is estimated at Rs. 4100 crores. The break-up of the public and the private sector investment under major Plan heads is given below :
Table 3 : Investment in Second and Third Plans
(Rs. crores)
Second plan Third plan
head public private total perce- public private total perc-
ntage entage
agriculture and comm-
unity development 210 625 835 12 660 800 1460 14
major and medium
irrigation 420 + 420 6 650 + 650 6
power 445 40 485 7 1012 50 1062 10
village and small
industries 90 175 265 4 150 275 425 4
organised industry
and minerals 870 675 1545 23 1520 1050 2570 25
transport and
communications 1275 135 1410 21 1486 250 1736 17
social services
and miscellaneous 340 950 1290 19 622 1075 1697 16
inventories - 500 500 8 200 600 800 8
total 3650 3100++ 6750 100 6300 4100++ 10400 100
9. The foreign exchange requirement for an investment of Rs. 10,400 crores is estimated to be over Rs. 2030 crores. The level of investment, public and private, is expected to rise from about Rs. 1600 crores in the last year of the Second Plan to about Rs. 2600 crores at the end of the Third. Corresponding figures for the public sector alone are Rs. 800 crores and Rs. 1700 crores.
10. It will be seen from Table 3 that the Third Plan provides for an increase of about 54 per cent in total investment-70 per cent in public sector investment and 32 per cent in private sector invest- ment. The proportion of the public sector will be, however, higher to the extent that the public sector outlay is raised above the financial provision of Rs. 7500 crores, near to the physical Plan of over Rs. 8000 crores.
STATE PLANS 11. Out of the programmes included in the public sector of the Third Plan the plans of States account for Rs. 3847 crores and of Union Territories for Rs. 175 crores. The remaining programmes fall within the plans of the Central Ministries. Details have been given in Annexure II to this Chapter. Provisions in the States and at the Centre have been made on the principle that generally development schemes to be implemented by State Governments should form part of the State plans and only certain limited categories of schemes should be shown in the plans of Central Ministries as being 'sponsored' by the Central Government. In this way, an attempt has been made to broaden further the scope of the plans of States and facilitate the integrated working of their development programmes.
* Investment is expenditure on the creation of physical assets (e.g. buildings. plant and equipment), including expenditure on per- sonnel required for putting up these assets. The expression corre- sponds broadly to expenditure on capital account
** Current outlay corresponds broadly to expenditure on revenue account on Plan schemes: it is expenditure other. than that classified as investment'.
+ Included under agriculture and community development, ++ Excludes transfers from public to private sector.
THE THIRD PLAN IN OUTLINE 33
12. In determining the plan of each State consideration was given to its needs, problems, past progress and lags in development, likely contribution to the achievement of the major national targets, potential for growth and the contribution in resources which the State could make towards its development programmes. In assessing needs and problems, such factors as population, area, levels of income and expenditure, availability of certain services, e.g. roads, schools, hospitals, extent of commitments carried over from the Second Plan, commitments on account of large projects or special programmes and the state of technical and administrative services available were taken into account. Care was also taken to see that States whose resources were unavoidably small did not have to limit development to a scale which was altogether insufficient, merely because of paucity of re- sources. At the same time States which were able to make a larger effort in mobilising their own resources could undertake development on an appropriate scale. The break-up of Rs. 4022 crores, which is the total of all programmes included in the plans of States and Union Territories, together with comparable figures for the First and Second Plans is given Statewise in Annexure III to this Chapter. A detailed break-up by States and by heads of developments is given in Appendix B at the end of the Report.
13. The broad indications of the physical programmes and the financial provisions as indicated above give a measure of the overall effort and the relative emphasis on different sectors envisaged in the Plan. Within this general framework the Plan comprises a number of concrete programmes of development, details of which have been given in the subsequent Chapters of this Report. A brief account of these programmes is, however, given in the following paragraphs.
AGRICULTURE 14. Programmes for Agriculture, irrigation and community devel- opment included in the Third Plan entail a total outlay of Rs. 1718 crores as compared to estimated expenditure of Rs. 950 crores in the Second Plan. These programmes aim at nearly doubling the rate of growth of agricultural production over the next five years. Produc- tion of foodgrains is expected to rise by 30 per cent and of other crops by 31 per cent as shown in the following table :
Table 4 : Index number of agricultural production
(1949-50=100)
percentage
increase in
group 1960-61 1965-66 1965-66
over 1960-61
all crops 135 176 30
foodgrains 132 171 30
other crops 142 186 31
15. To achieve this high rate of growth, intensive efforts are to be made in several directions. First, a large programme of irriga- tion, comprising major, medium and minor irrigation schemes, is to be undertaken. This will extend irrigation to about 20 million acres, raising the net irrigated area to about 90 million acres. Second, dry farming techniques are to be introduced on about 22 million acres and soil conservation measures over an area of about II million acres. Third, the consumption of fertilisers is to be stepped up--a fivefold increase being aimed at in nitrogenous fertilisers from 230,000 tons (in terms of N) to one million tons, and a sixfold increase in phos- phatic fertilisers from 70,000 tons (in terms Of P2 O5) to 400,000 tons. The area under green manures is to be increased from 11.8 million acres to 41 million acres. Plant protection measures are to be undertaken over an additional area of 50 million acres. Fourth, special efforts will be made to introduce modern technology in rural areas through a large-scale programme for improved agricultural imple- ments and machines. A comprehensive programme for agricultural imple- ments has been prepared which includes establishment in every State of one centre for testing, designing, technical guidance and manufactur- ing implements of improved type; adequate arrangements for the supply of iron and steel to manufacturers; credit for supply, purchase and production of improved implements; and strengthening of agricultural engineering personnel in the States. Fifth, the community development programme will be extended to the entire rural area by October, 1963, thus bringing technical assistance and supplies within the reach of all the farmers in the country. AR villages will be served by pan- chayats and cooperatives. Through the introduction of democratic institutions at the district and block levels, responsibility and initiative for development are being transferred to the people of each area. Membership in service cooperatives is expected to increase to about 37 millions, that is about two-thirds of all agricultural fami- lies. Considerable expansion of cooperative credit is aimed at, the targets being about Rs. 530 crores of short and medium-term advances and Rs. 150 crores (loans outstanding) of longterm credit. The number of cooperative marketing societies will be increased from 1869 to 2470. Nearly 980 new storage godowns at mandi centres will be set up and 9200 smaller godowns will be established in the rural areas on a cooperative basis. Twenty five new co-operative sugar factories will be set up and greater attention will be paid to the establishment of cooperative processing units for rice, Cotton, jute, groundnut, fruits, etc. There is also a programme for setting up 2200 primary consumers' stores and 50 wholesale stores on a cooperative basis. Efforts will be continued to popularise cooperative farming and 3200 cooperative farms will be organised as pilot experiments throughout the country. Sixth, selected districts which have particularly fa- vourable irrigation facilities and assured rainfall will be put under an intensive
34 THIRD FIVE YEAR PLAN
agricultural development programme for stepping up agricultural production. To begin with, one such district has been selected in every State. This important new programme will bring to these areas a concentration of technical help, fertilisers, improved credit and other supplies to reach all farmers through village panchayats and cooperatives and help increase both production and marketable surplus of foodgrains substantially.
16. It is expected that as a result of these various measures the production of the major crops will go up as shown in the fol- lowing Table :
Table 5 Production of major crops
percentage
increase in
crop unit 1960-61 1965-66 1965-66
over
1960-61
foodgrains million tons 76.0 100.0 32
oilseeds million tons 7.1 9.8 38
sugarcane* million tons 8.0 10.0 25
cotton million bales 5.1 7.0 37
jute million bales 4.0 6.2 55