APolitical instability
BFailure of the Third Five-Year Plan
CDeflation
DEconomic liberalisation
Answer:
B. Failure of the Third Five-Year Plan
Read Explanation:
The Period of Plan Holiday (1966-1969)
The period from 1966 to 1969 in India is known as the 'Plan Holiday'. This was a deviation from the usual Five-Year Plan structure.
Primary Reason: Failure of the Third Five-Year Plan
The Third Five-Year Plan (1961-1966) faced severe setbacks, leading to its inability to achieve its set targets.
Key Factors Contributing to the Failure:
Indo-Pakistani War of 1965: This conflict strained national resources and diverted focus from developmental goals.
The Sino-Indian War of 1962: This war also had significant economic consequences, impacting defense spending and resource allocation.
Severe Droughts: Consecutive years of drought in the mid-1960s crippled agricultural production, a critical sector of the Indian economy.
The cumulative impact of these crises led to a general economic slowdown and uncertainty.
Rationale for the Plan Holiday
The government decided to postpone the Fourth Five-Year Plan due to the prevailing economic instability and the need to reassess priorities.
Instead of a formal Five-Year Plan, the government opted for annual plans during this period.
This strategy allowed for flexibility in resource allocation and planning in response to the uncertain economic conditions.
The objective was to stabilize the economy, consolidate gains from previous plans, and lay a sound foundation for future development efforts.