What was the primary reason for the 'Plan Holiday' between 1966 and 1969?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Failure of the Third Five-Year Plan.
- The failure of the Third Five-Year Plan became the main reason for the “Plan Holiday” observed between 1966 and 1969. Due to the poor performance of the plan, the government had to suspend regular five-year planning and instead implement annual plans during 1966-67, 1967-68, and 1968-69.
- The setbacks of the Third Plan were largely the result of the Sino-Indian War (1962) and the Indo-Pak War (1965), which drained resources and disrupted economic progress.
- The plan had placed emphasis on agriculture, particularly on boosting wheat production. While it had aimed for a growth rate of 5.6%, the economy could achieve only 2.4%.
- To improve the balance of payments and stimulate exports, the government also resorted to the devaluation of the rupee. Normal planning resumed in 1969 with the launch of the Fourth Five-Year Plan.
- The Fourth Five-Year Plan was launched only in 1969.