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. 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.
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.
Objectives of the Third five-year plan
- Increasing the national income by 5 percent per annul.
- Making India self sufficient by increasing agricultural production. This step was taken to ensure that India does not have to bank on others for food products.
- Minimizing rate of unemployment.
- Ensuring that people enjoy equal rights in the country.