Third Five Year Plan
The period of Third Five Year Plan was 1961-66. It is known as Gadgil Yojana. The target growth rate was 5.6%, but the actual growth rate was 2.4%. It stressed agriculture and improvement in the production of wheat. The plan considers the aim of balanced, regional development for the first time.
The Sino-Indian War of 1962 exposed weaknesses in the economy. Hence the focus shifted towards the defence industry and the Indian Army. In 1965–1966, India fought a War with Pakistan. There was also a severe drought in 1965. The war led to inflation and the priority was shifted to price stabilisation.
Many primary schools were started in rural areas. In an effort to bring democracy to the grass-root level, Panchayat elections were started and the states were given more development responsibilities. States were made responsible for secondary and higher education. State road transportation corporations were formed and local road building became a state responsibility.
State electricity boards and state secondary education boards were formed. The construction of dams continued. Many cement and fertilizer plants were also built. Punjab began producing an abundance of wheat.
Due to miserable failure of the Third Plan the government was forced to declare plan holidays (from 1966–67, 1967–68, and 1968–69). The main reasons for plan holidays were the war, lack of resources, and increase in inflation after that plan holiday was created. Three annual plans were drawn during this intervening period. During 1966–67 there was again the problem of drought.
Equal priority was given to agriculture, its allied activities, and industrial sector. The government of India declared Devaluation of Rupee to increase the exports of the country.