The 3rd Plan with the goal of ‘self reliant and self generating economy’ saw the beginning of long term perspective planning as an instrument to achieve the objective of a integrated growth of industry balanced with agriculture.
With the base created in the first two plans, the Third Plan called for the Maximum rate of investment to:
(a) Strengthen industry, power and transport and
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(b) Hasten the process of industrial and technological change.
i. 20% total outlay was allocated to industries and minerals
ii. The overall financial outlay in organised industries and mining during the Third Plan period was Rs. 3,000 crores.
iii. The aim of the plan was to make the economy self-sustaining in producers’ goods industries such as steel, machine-buildings, etc., so that the quantum of external assistance needed could be curtailed to a very low level.
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iv. An overall target of 70% increase in industrial production was envisaged in the plan.
v. Rs. 425 crores was allocated to the development of village and small scale industries.
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Achievements:
(i) Engineering industries like automobiles, cotton textile machinery, diesel engines, electric transformers and machine tools, advanced according to set-targets as did industries such as petroleum product, heavy chemicals, cement, etc.
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(ii) Mining and extractive industries also showed considerable progress.
(iii) It was during this period that a fairly sound base for future industrial growth was laid through the completion of projects of the HEC for manufacture of machinery and equipment for steel plants, the MAMC for the production of mining equipment and Bharat Heavy Electricals for power generation and transmission equipment.
Criticism:
i. Except for the year 1965-66, industrial output increased steadily at the rate of 7.6% perineum. The achievement was lower than the average of 14 percent per annum visualised in the plan. Although the increase in the output of producer and basic industries was higher than the actual growth in the general index of production, yet it was much lower than the target set out in the Third Plan/
ii. Price index of industrial raw materials and manufacturers rose by 33 percent and 22 percent respectively.
iii. The World Bank (IBRD) and IMF, in particular advised the Indian Government to devalue the rupee in June, 1966, this highly controversial step was followed by a major delicensing of some 42 industrial items in the second half of 1966.
iv. Significant imports of foreign investment and technology took place, even in schedule A and B industries which normally should have been banned to the private sector.
v. Whereas foreign capital accounted for 29% of fixed investment in the private corporate sector between 1948-53, this relative proportion increased to 32% in 1960-61.