FIVE YEAR PLANS(1-3)

First Plan (1951-56)

• Highest priority to agriculture, irrigation and power projects
• 44.6% of total public sector outlay of Rs. 2069 crores (subsequently increased to Rs.
2378 crores) on agriculture, irrigation and power.
• Transport and communication received 26.4% and industry only 2.8%
• Rate of investment targeted at 7% of national income
• National income grew by 18% and per capita income by 11%
• Food production went up by 20%

Second Plan (1956-61)

• Targeted a 25% increase in national income through rapid industrialization. Actual
achievement was only 20%
• Adopted the socialistic pattern of society as the goal
• Rate of investment planned to be raised from seven percent to 11% of national income.
• National Income increased by almost 20% but per capita income rose only by eight per
cent.
• Large industries including steel plants (Durgapur, Bhilai and Rourketa) were set up. The
locomotive factory at Chittaranjan and Coach Factory at Perambur were other major
projects of this period.

Third Plan (1961-66)

• Emphasis on basic industries continued but agriculture and allied sectors (irrigation and
power) were allocated 35% of the outlay.
• A series of crises – China war (1962) Nehru’s death (196) – marred the smooth
implementation of the plan.
• Growth rate of only 2.2% achieved as against a target of 5% per annum
• Inflation (36%) ate up much of the achievement; Rupee devaluation (1966)
Annual Plans (1966-69) after the disastrous experience of the Third Plan, a plan holiday was
declared for three years. All available resources were mobilized for building a buffer stock and
for stepping up food production learning from the experience of near-famine years (1965-66).
Favourable monsoon and technological break-through in wheat popularly known as
‘green revolution’ reduced the inflationary pressure. Nationalisation of banks was another major
step during this period.