Q.Write a short note on: Concept of Plan Holiday

Plan Holiday was the period 1966 to 1969 when India halted its Five Year Plans and ran three Annual Plans instead, because the Third Plan had failed, two wars and a severe drought had disrupted the economy, and there were acute food and foreign-exchange shortages. The Fourth Five Year Plan began in 1969. This is an AP Intermediate 2nd-year Economics topic on planning.

Meaning: The concept of 'Plan Holiday' refers to the break of three years (1966 to 1969) in India's regular Five Year Plans. During this period, instead of launching the Fourth Five Year Plan, the government implemented three separate Annual Plans (also called 'rolling plans' for those years).

Reasons for the Plan Holiday:

1. The failure of the Third Five Year Plan (1961 to 1966) to achieve its targets.
2. The Indo-China war (1962) and the Indo-Pak war (1965), which diverted resources to defence.
3. Severe droughts and crop failures that led to food shortages.
4. Shortage of foreign exchange and the devaluation of the rupee in 1966. …