India's Third Five-Year Plan:

...Yet the people are now faced with a third Plan, almost double the size of its predecessor and requiring more than double the effort, whose object is to take the country to a point of economic "take-off...

...A prime feature of the second plan, apart from the sharp growth of the basic iron and steel industry, was the establishment of a major oil industry, including the setting up of three oil refineries and the successful implementation (largely with Soviet help) of a considerable oil exploration program...

...An imponderable is the world situation, which in the context of Communist China's growing unfriendliness vis-à-vis this country looks anything but promising...

...Thus, even before the plan starts, about a third of its foreign exchange deficit has been covered, and even before a consortium of friendly nations meets next month under World Bank auspices, some of its members, such as West Germany and Japan, have announced aid for the plan's first years...

...The British rulers of this country always had insisted there was no oil in India...

...This has meant an expensive road-building program, the purchase of road-building and earthmoving equipment and helicopters and transport planes...

...The problem of securing aid, therefore, does not appear insuperable...

...This means that by 1966 India must near self-sufficiency with a food crop output of between 105 and 110 million tons per annum...

...The country teetered on the brink of a severe foreign exchange crisis and steel output was struggling—entirely in the private sector—to get over the million-ton hump...

...In 1961, as the country prepares to embark on its massive (823 billion) third plan, the last harvest is estimated to have yielded 76 millions tons of food grain, the industrial production index for 1960 stood at 167.5—an increase of 11.7 (from January to October) over the preceding year— three new million-ton steel plants in the state sector began the export of pig iron, and during the now-ending decade of planning the national income has increased by around 40 per cent...

...It is this and not the current production figures which is said to be the real achievement, because it demonstrates the country's growing independence of the notoriously undependable Monsoon rains...

...In this year's budget of a total expenditure of just over $2.1 billion, around $630 million is reserved for defense...

...Even if this is forthcoming, future generations will be mortgaged heavily...

...The result is that defense expenditures are soaring...

...India's Third Five-Year Plan Reliance'on foreign aid is one of the major weaknesses By Sharokh Sabavala Bombay When India's second Five-Year Plan was launched in 1956, food grain production was around 68 million tons per annum and the index of industrial production (set at 100 in 1951) stood at 132.6...

...Moreover, planning has come to be accepted as necessary, however odious its restrictions and burdens...

...India maintains a well-equipped army of not more than half a million men, but this army is now called upon to guard a newly threatened frontier 2,500 miles long...

...Of this amount, a spill-over of foreign aid amounting to some $630 million is available, and for the third Plan itself Nehru's Government has been able to negotiate promises worth another $1.6 billion from foreign sources, especially Soviet Russia...

...even more important, the net irrigated area has gone up from 45 million acres under food crops to 63 million acres in 1960...

...However, after 10 years of austerity and privation, the Indian people have begun to show signs of strain and restlessness...

...There is also the urgent necessity of giving the people some relief by way of shortterm, quick-yielding projects so that the national will to sustain the plan is not further broken down in the near future...

...In 1959-60, provisional estimates put it at $24.6 billion and $61.10 respectively...

...Even so, the portents for the plan are not unpropitious...

...And it is not money on arms alone that India now has to spend...

...With only a million people paying direct taxes (the new census estimates the Indian population to be 438 million), the tax burden fell increasingly on a microscopic section of the population, leading to discontent, loss of initiative and increasing opposition to the Government, to the ruling party and to planning itself...

...At the start of the first Five-Year Plan the national income [at 1943-49 prices] stood at $18.5 billion, the per capita income at $51.70...

...The plan also failed to take up the unemployment slack of nearly 8 million, and as literacy rose and the hunger for education grew, hundreds of thousands of young men and women left the universities each year with no prospects of steady work...

...Every state and almost every district in it has fought for a place in the Plan...

...In the last 18 months it has been forced to open up a new and vast Himalayan hinterland for no other purpose than to provide supplies and equipment to garrisons on the border...

...instead, they were asked to continue to sweat, strain and toil so that a future generation might enjoy a better way of life...

...it must set up by that year a machinerymanufacturing base and an industrial complex founded on an annual steel output of 10 million tons...

...Unlike Government enterprise it has overfulfilled its second plan targets and now stands ready to take over many third Plan projects which the Government is unable to finance...

...All this, however, was not achieved without cost...

...Meanwhile, the question of whether or not India should rely so heavily on external assistance continues to be debated...

...The new imposts, over the five-year period, will bring in an additional revenue of $661 million—a good start considering the fact that the ruling Congress party has dared to make these budget proposals not long before national elections...

...Ten years of planning has given the Government and the people a measure of confidence which is reflected in rising private foreign investments (now topping the billion dollar mark), in more frequent World Bank loans and government-to-government assistance, and above all in the rise of the state-owned corporate sector, which with 125 state-owned companies now represents a third of the total sector...

...Lack of foreign exchange caused a pruning of the plan and many important projects either were shelved or abandoned altogether...

...The second plan, with a total outlay of $9.96 billion, therefore was viewed critically by the Indian people...

...witness the sudden inexplicable outbursts of violence and the growing cynicism toward Jawaharlal Nehru's ideals of a welfare state...

...If it fails, it will not be for want of effort either in this country or in the free world...

...The first is its reliance on foreign assistance of a billion dollars a year...

...In the third five-year period the Federal and state governments will have to raise an additional $3.5 billion in direct and indirect taxation...

...These are among the major achievements of the second Five-Year Plan...

...Finally, since the plan concentrated on big projects like steel mills, dams and power houses it could not by its very nature make its benefits immediately available to the masses...

...The Plan also aims to provide an additional 13.5 million jobs and increase the national income by an annual 5 per cent...

...During the period of its implementation, India began to manufacture automobiles, trucks, ships and aircraft...

...The second weakness is the necessity of raising sufficient domestic resources...

...Private Indian enterprise, mobilized to resist what it considers undue state encroachments, is expanding despite all obstacles...

...Thus the average level of prices for 1960, partly due to heavy deficit financing, rose by 6.5 per cent over the previous year...

...Since the start of the first plan (in 1951) with its emphasis on agriculture, food production has risen by 23 million tons, or at an average rate of 4.3 per cent per annum...

...As for raising domestic resources, a start has been made in the 1961-62 national budget which increases the excise levies and customs duties on nearly 50 items of consumer goods, including almost everything that the man-în-the-street uses daily...

...This includes repayment of second plan loans...

...India, furthermore, ran through its sterling reserves and currency backing fell to dangerously low levels...

...The plan for 1961-66 requires a total of $6.9 billion in foreign exchange...

...Consequently student "indiscipline" became an ugly feature of Indian life, along with a rise in crime, juvenile delinquency and outright hooliganism, especially in the big, overcrowded cities where housing did not keep pace with the population growth...

...Intrinsic in this plan, the planners themselves admit, are some major weaknesses...

...In I960, the per capita income is said to have crossed the $63 mark...

...But within 15 years of independence, Indians struck oil in the East Indian state of Assam, in the West Indian state of Gujarat and gas in North and Northwestern India, resulting in the construction of two stateowned refineries and the planning of two more...

...China's effort to sabotage India's economic development is not altogether unsuccessful, for every rupee spent on arms means one less for economic expansion...

...It is not yet true to say that planning has filtered down to the lowest levels, but the third Plan—unlike its predecessors—undoubtedly is the result of discussion, argument and study from the district level upwards...

...The only differences of opinion are on size and scope...

...It began to export to West Asia, East African and Southeast Asia the output of its new light engineering industries...

...It became, with Canadian assistance, the world's largest producer of radio isotopes and blueprinted an atomic power plant of 300 megawatts, due to go into production in 1964-65...

...weighed against its undoubted achievements were its shortages in food, transport, power and coal...