Plan Holiday of Five Years Plan

What is Plan Holiday?

Plan holiday is mainly described as the gap between the two five-year plans. The period from 1966 to 1969, i.e. after the Third Five Year Plan and before the fourth five-year plan is called Plan Holiday. This three-year period is considered a “Planning Holiday” due to the occurrence of the three annual plans, instead of five-year plans. This is because of the uncertainties in the government policies and financial conditions in the nation to implement the development process.

Reasons Behind the Plan Holiday:

After the end of the Third Five Year Plan, the financial resources of the nation were drained and no further funds to implement new Plans for the period of Five Years. Due to this, the Government was forced to declare Plan Holidays during the periods “1966-1967, 1967-1968, 1968-1969.” Though the Fourth five-year plan was ready for implementation in 1966 itself, the weak financial situation as well as the low morale after the defeat by China, the Government decided to go for an Annual Plan. Also, the War with Pakistan in 1965 caused disruption for Foreign Aid. In June 1966, the Central Government devalued the “Rupee”, so that the exports of the nation would improve. Some economists as well as the opposition leaders called for a discontinuity in the planning process.  These plans were also known as “Pygmy Plans” as pygmy means small/ dwarf. The total plan value for these annual plans was 6626 crores.

Year Wise Account/ Allocations For Annual Plans:

The Years-1966-1967: Total allocation of 2165 crores. 

1. To generate revenue in the country by foreign exchange, the Central Government devalued the “Rupee”. 
2. The list of priority industries was extended on the basis of the Development Rebate.
3. Incentives were given to tea plantations.
4. Because of the Post War conditions, National Defence Remittance Scheme was extended.
5. In 1966, the Indian Tourism Development Corporation was started.
6. In 1967, Electronics Corporation of India Limited (ECIL) was started.
7. The industrial production growth rate in 1965-66 was 3.9%. However, it declined by 2.1% in 1966-67.
8. Since the country suffered from drought in 1966-67, food grain production did not grow beyond 76million tons.

The Years-1967-1968: Total allocation of 2085 crores

1. With the Impact of the Green Revolution on the nation, Government took revolutionary steps for the implementation of food grain productivity. 
2. Minor and Major irrigations were developed in the country.
3. Industrial production (i.e., fertilizers and pesticides) was the main focus area.
4. In 1968 National -Textile Corporation was established.

The Years-1968-1969 – Total allocation of 2376 crores

1. Promote higher Agriculture productivity.
2. Speedy completion of selected major Irrigation Projects.
3. Defence system is strengthened by allocating required capital.
4. Railways, the Iron and Steel Industry, fertilizers and pesticides, petroleum, posts, and telegraph were focused areas during this year.
5. In 1969 Lead Bank Program was launched on the recommendations of the Nariman committee.

Role of Plan Holiday In Economic Development:

• Amidst the financial suppression after the Third five-year plan, the plan holiday played a crucial role in the development of the Indian economic condition. 
• Although these were pygmy plans, they achieved a notable growth rate in the economy such that the Nation regained its economical stability.
• Estimations show that the Growth rate has reached around 6.9% during this plan holiday period whereas it failed to reach 5.9% estimated target in the Third five-year plan.
• Food grain productivity rate/ Agriculture productivity rate has reached 95 million tons by the end of these pygmy plans/ plan holiday.
• Thus plan holiday played a prominent role and helped the nation to generate sufficient revenue profits to formulate the Fourth five-year plan.

Related Frequently Asked Questions and Answers:

1Q. Which areas were given more priority during Plan Holiday?

Ans. Equal priority was given to agriculture, its allied activities, and the industrial sector.

2Q. Why is the period called as a Plan Holiday?

Ans. In the economy, the term Plan Holiday means the yearly gap between the two five-year Plans. The gap occurred between the third five-year Plan and Fourth Five Year Plan for three years, therefore it is called a Plan Holiday.

3Q. Who is the Father of the Green Revolution in India?

Ans. The father of the Green Revolution in India is Dr. M.S. SWAMINATHAN.

4Q. What is the devaluation of the Rupee?

Ans. Devaluation of the rupee refers to the deliberate reduction in the value of the rupee compared to other currencies like the dollar.

5Q. How many times has devaluation occurred in India?

Ans. In India, devaluation occurred three times till today. In 1948 by John Mathai, in 1966 by Suchendra Chowdary, and 1991 by Manmohan Singh.