3rd Five Year Plan
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Introduction || Planning Commission
1 || 2 || 3 || 4 || 5 || 6 || 7 || 8 || 9 || 10 || 11 || 12 || 13 || 14 || 15 || 16 || 17 || 18 || 19 || 20 || 21 || 22 || 23 || 24 || 25 || 26 || 27 || 28 || 29 || 30 || 31 || 32 || 33 || 34 || 35 || Conclusion || Appendix A || Appendix B || Appendix C || Glossary




The Report on the Census of 1951 calculated two sets of projections for the growth of population upto 1981 on the basis of two sets of assumptions, namely, that the rate of growth during this period would be the same as that calculated from the Census data (a) for the period 1921—1950, or alternatively, (b) for the period 1941—50. These estimates were accepted as the basis for the projections used in the Report on the Second Five Year Plan and are reproduced in column 2 of Table 1.

2. Following the 1951 Census, demographic data began to be collected by the National Sample Survey; these data consistently indicated a much higher rate of growth of population. For use in the Draft Outline of the Third Plan, fresh estimates were, therefore, prepared in 1959 by the Central Statistical Organisation (C.S.O.) assisted by the Registrar-General; these estimates are given in column 3 of Table 1.

1961—1976. Table 1 : Population projections
(in millions)

year Second Five Year Plan 1959 C.S.O. 1961 Study Group
1 2 3 4
1961 408 431 438*
1966 434 480 492
1971 465 528 555
1976 499 578 625

3. The 1961 Census gave a provisional total population of 438 millions; this was about 2 per cent higher than the figure adopted in the Outline of the Third Plan; and was 30 millions (7 per cent) higher than the projection given in the Second Five Year Plan. A study group assisted by the Registrar-General and the C.S.O. prepared revised estimates based on the following assumptions; general fertility rate of 189 per thousand to continue upto 1971 and then declining by 10 per cent by 1976; and expectation of life at birth of 47.5 years in 1961, increasing by 0.75 years annually upto 1966 and by 0.50 years upto 1976. These projections are given in column 4 of Table 1. More detailed estimates, by age-groups, separately for the two sexes, were prepared by the same study group; these are given in Table 2.

Table 2 . Estimates of population growth for 1966, 1971 and 1976
(in millions)

age group 1961 1966 1971 1976
total male female total male female total male female total male female
1 2 3 4 5 6 7 8 9 10 11 12 13
0—4 71-3 36-6 34-7 79-8 40-8 39-0 89-9 45-9 44-0 97-7 49-8 47-9
5—9 58-6 30-3 28-3 66-6 34-3 32-3 75-5 38-7 36-8 85-7 43-9 41-8
10—14 46-1 23-6 22-5 56-9 29-4 27-5 65-0 33-5 31-5 73-8 37-8 36-0
0—14 176-0 90-5 85-5 203-3 104-5 98-8 230-4 118-1 112-3 257-2 131-5 125-7
15—19 40-1 20-6 19-5 45-0 23-0 22-0 55-8 28-8 27-0 63-8 32-8 31-0
20—24 37-0 19-1 17-9 39-2 20-0 19-2 44-1 22-4 21-7 54-8 28-2 26-6
25—29 33-8 17-2 16-6 36-1 18-5 17-6 38-2 19-5 18-7 43-2 21-9 21-3
30—34 30-1 15-3 14-8 32-6 16-6 16-0 34-6 18-0 16-6 37-3 19-1 18-2
35—39 26-5 13-7 12-8 28-8 14-7 14-1 31-4 16-0 15-4 33-6 17-5 16-1
40—44 23-0 12-2 10-8 25-3 13-1 12-2 27-7 14-2 13-5 30-4 15-5 14-9
45—49 19-4 10-4 9-0 21-7 11-5 10-2 24-0 12-4 11-6 26-4 13-5 12-9
50—54 15-9 8-5 7-4 18-0 9-6 8-4 20-2 10-7 9-5 22-6 11-7 10-9
55—59 12.7 6.7 6.0 14.3 7.6 6.7 16.4 8.7 7.7 18.5 9.7 8.8
60—64 9-5 4.9 4-6 10-9 5-7 5-2 12-5 6-5 6-0 14-4 7-5 6-9
15—64 248-0 128-6 119-4 271-9 140-3 131-6 304-9 157-2 147-7 345-0 177-4 167-6
65—69 6-3 3 -2 3-1 7-6 3-8 3-8 9-0 4-6 4.4 10-3 5-3 5-0
70 and over 7-7 3-5 4-2 8-7 4-1 4-6 10-4 4.9 5-5 12-6 6-0 6-6
65 and over 14-0 6-7 7-3 16-3 7-9 8-4 19-4 9-5 9.9 22-9 11-3 11-6
all ages 438-0 225-8 212-2 491-5 252-7 238 -8 554-7 284-8 269-9 625-1 320-2 304-9

*Provisional total of 1961 Census.

4. Changes in birth and death rates are known to be of a most complex nature. In India stress is being laid on family planning, but it is still uncertain how effective such efforts would become over the next five or ten years. Population projections given in Table 2 are, therefore, based on assumptions which are necessarily somewhat speculative in character. The actual growth of population may deviate from the above assumptions; and yet a standard set of population figures is indispensable for the calculation of various Plan targets for future years. The projections given here are being adopted provisionally for present purposes. It is fully appreciated that the only way of improving the estimates would be collection of demographic data of adequate reliability in the intercensus period.


In Chapter X—Employment and Manpower— a general account has been given of the approach adopted in estimating the likely additional employment during the Third Plan on account of the development programmes and projects included in the Plan. There is continuous need for gathering additional data, checking assumptions and improving methods of estimation. To facilitate further study and improvement of the present estimates, this note sets out briefly the main assumptions adopted in calculating the additional employment potential for the Third Plan apart from special schemes like the rural works pro-' grammes and others which may be undertaken.

2. It is reckoned that, as at present formulated, the Third Plan could yield about 14 million additional jobs, about 10.5 million being outside agriculture and about 3.5 million in agriculture. The additional employment outside agriculture is distributed as follows :

Additional non-agricultural employment

Sector (in lakhs)
1 construction 23-00*
2 irrigation and power 1-00
3 railways 1-40
4 other transport and conimunica'ions 8-80
5 industiies and minerals 7-50
6 small industries 9-00
7 forestry, fisheries and allied services 7-20
8 education 5-90
9 health 1-40
10 other social services 0-80
11 government services 1-50
totall 67.50
12 others including trade and commerce at 56 percent of the total of items 1—11 37-80
grand total 105-30

* Further break-up of construction employment:

(in lakhs)

1 agriculture and community development 6.10
2 irrigation and power 4.90
3 industries and minerals including cottage and small industries 4.60
4 transport and communications including railways 3.40
5 social services 3.50
6 miscellaneous 0.50
total 23.00

3. In estimating additional employment there cil-c three preliminary assumptions. Firstly, in relation to the existing capacity, production and employment will not be allowed to fall below the present levels. In particular, difficulties which employers may experience in working to their present capacity will be removed and employment in existing units will atleast be maintained. Secondly, the various development programmes for which the Plan provides will be undertaken with the necessary efficiency and economy and continuity in output would be assured. Thirdly, in all construction activities, subject to overall considerations, preference will be given to labour-intensive methods.

4. In relation to development in the Third Plan additional employment has to be estimated :

(a) in non-agricultural sectors in respect of—

  1. the construction phase,
  2. the continuing phase, that is as a result of the operation and maintenance of assets created during the process of construction, and
  3. indirect employment outside agriculture, mainly in trade, commerce and miscellaneous services, including transport outside the organised sector, and

(b) in agriculture.


5. Construction is an important clement in all fields of development. Estimates of additional employment under this head refer to employment during construction over the entire range of projects under the Plan, such as irrigation and power, roads, railways, factory buildings, housing, buildings for schools and hospitals etc. In the main, employment during the construction phase is estimated with reference to the increase in outlay in 1965-66 above the level of 1960-61, which serves as the base year. Data concerning outlays and their phasing are derived from information received from Central Ministries and State Governments and from special studies or such other information as can be pieced together. For each class of works an attempt is made to calculate the number of persons likely to be employed for about 300 days in a year for a crore of developmental outlay. By way of illustration, employment calculations in two important construction sectors, namely, (i) irrigation and power and (ii) transport, have been detailed below :

(i) Irrigation.—The difference between the anticipated outlay in 1965-66 and 1960-61 is reckoned to be of the order of Rs. 37-5 crores. Experience of the Second Five Year Plan, as analysed in the 'Progress of Selected Projects during the Second Five Year Plan' (March, 1961) shows that in the projects included in this analysis, a rough employment-investment ratio will be of the order of 7000 man-years per crorc. On this basis, the expected man-years of additional employment of the construction component of the irrigation projects would be of the order of nearly 2.63 lakh man-years. It may be pointed out, however, that since the projects represented in the Progress Report are among the larger projects, the employment estimates thus arrived at may understate the employment potential of the investment on irrigation.

Power.—The step-up of expenditure in power projects between the last year of the Second Plan and the last year of the Third Plan is estimated at Rs. 140 crores. Experience in the Second Plan shows that an investment of a crore of rupees in power projects will yield in the construction phase an employment of 1600 man-years. On this basis, the additional construction employment generated on power projects and the power component of multi-purpose projects will be 2.24 lakh man-years.

Irrigation and power projects would, thus, account for a total of 4.87 (or, say, 4.90) lakh man-years of additional employment.

(ii) Transport.—Construction activity under transport is broadly divided into railways, roads, ports and harbours and other transport and communications. For the railways it is estimated that increase in annual expenditure over the Third Plan period will be in the neighbourhood of Rs. 53.5 crores. For a crore of total expenditure on railways, employment in construction will be of the order of 1900 man-years. On this basis, railways will account for additional construction employment in the Plan period of about 1 lakh man-years. Similar calculations for roads, where the employment norm has been worked out on the basis of the Report of the Chief Engineers on Roads for India (1961-81) show that for the expected step-up of expenditure in the last year of the Plan, the additional employment in man-years will be nearly 2.14 lakhs. Calculations for ports and harbours and other transport and communications show an increase in construction employment of the order of 31,000. The total under this head comes to 3.45 lakhs (shown as 3.4 lakhs in the Table in paragraph 2).

In regard to other sectors of construction employment, similar methods of calculation have been used.


6. Estimates of direct employment during the continuing phase present even greater difficulty than those for the construction phase. Information based on a close study of experience within different branches of economic life is limited. Estimates of continuing employment outside agriculture can be related either to the amount of capital at given prices required per person maintained in continuous employment or to output per person after making a suitable allowance for increase in productivity. Employment calculations in three important sectors namely, (i) village and small industries, (ii) education and (iii) mining, have been given below to illustrate the method.

(i) Village and small industries.—Working Groups set up by the Small Scale Industries Board have worked out estimates of investment employment ratios for different activities on which expenditure is likely to be incurred during the Third Plan. For small-scale industries employment of one person would mean an investment on the average of Rs. 5000; for handicrafts the estimate is Rs. 1500, for coir and sericulture it is roughly Rs. 1000. On the basis of the Third Plan allocations to these different activities under village and small industries, a rough employment estimate of 3.57 lakhs against outlays in the public sector has been worked out. Similar outlays estimated in the private sector are expected to yield an employment of nearly 5 lakhs, bringing the total to 8.57 or nearly 9 lakhs. This excludes outlays on hand-looms, powerlooms, khadi and village industries of the order of Rs. 130 crores in the public sector, which will mainly yield relief to underemployed persons.

(ii) Education.—As mentioned earlier, calculations of continuing employment in the education sector have been based on teacher-pupil ratio. Details of calculations have been shown in the Table below. An adjustment of about 30,000 has been made in these figures in order to account for the practical difficulties envisaged in securing adequate number of teachers. Total employment under education is, therefore, shown at 5.9 lakhs.

Additional Employment due to Education Schemes
(Figures in lakhs)

    on roll pupils
per teacher
number of teachers
(a) 6-11 age-group      
  1960-61 343.4 1:37 9.28
  1965-66 496.4 1:38 13.06
    additional 3.78
(b) 11-14 age-group      
  1960-61 62.9 1:28 2.25
  1965-66 97.5 1:28 3.48
    additional 1.23
(c) 14-17 age group      
  1960-61 29.1 1:14 2.08
  1965-66 45.6 1:16 2.85


(d) University education   0.40
    total 6.18
    less 0.30
    or when rounded 5.90 lakhs

(iii) Mining.—As an illustration of employment calculations using only physical targets, the manner in which additional employment in mining has been worked out may be given. Of the employment of 7.5 lakhs shown against "industries and minerals" in the Table in paragraph 2, the latter will account for about a third of the total, that is, about 2.5 lakhs. Details of calculations are shown as in the Table below :


million tons

productivity per person (in tons per year) number of persons employed
(in lakhs)
(a) coal : 1960-61 54-6 140 3-9
1965-66 97-0 180 5'4
additional employment 1-5
(b) iron ore : 1960-61 10-7 170 0-6
1965-66 30-0 225 1-3
additional employment 0.7
total coal and iron ore 2-2

As for other minerals, experience over the period 1951—58 has shown that the rate of increase in employment has been of the order of 7000 persons per year. On the same basis, the additional employment in the Third Five Year Plan is expected to be of the order of 35,000. The total additional employment, therefore, is estimated at 2.55 lakhs of which, as mentioned earlier, account has been taken for only 2.5 in the estimates presented earlier.

7. Under large and medium industries there will be different norms of qontinuing employment. The following Table, which is essentially illustrative, indicates the amount of capital required per person in a number of important industries :

name of industry capital required per person Rs.
steel 160000
fertilisers 40000
machine tools (graded) 25000
heavy machines building plant 100000
foundry /forge plant 100000
coal mining machinery 60000
heavy electricals 50000

8. It should, however, be stated that the data on which the calculations given above are based, are on the whole very meagre. The conclusions which are drawn are, therefore, intended only to suggest broad dimensions. Indeed, precision in this field can only come from prolonged study.

9. Apart from employment which can be attributed to different items in the first 11 sectors of the Table in paragraph 2, there will be other activities in the economy in which increases in employment will take place. For instance, corresponding to occupations like mining, industries, railways, transport, construction, health, education, public administration, communications, etc. there will be activities connected with trade, banking, insurance, transport (transport other than railways or organised road transport), storage, warehousing, and professions and miscellaneous personal services which cannot be included in employment calculations because of the very nature of such employment." Some of these are areas of self-employment, and self-employment accounts for the occupation of a major portion of the working force. Considerable uncertainty would, therefore, attach to such estimates because in the self-employed sector the distribution of additional work as between those who are at present engaged in it and consider themselves to be under-employed and others who seek new entry is difficult to make with our present knowledge of the mechanism of employment generation in these fields. However, from such studies as have been undertaken, it appears that at present additional employment of this type might be of the order of 56 per cent of the increase in employment resulting from the first 11 categories of Table in paragraph 2. As has been mentioned in the Chapter On Employment and Manpower this estimate is based on the analysis of the 1951 Census data. When the results of the latest census become available, it .will be possible to arrive at a closer approximation of such employment effects.


10. In agriculture, it is extremely difficult to distinguish between net additional employment and expansion in employment providing relief for under-employment. From such limited enquiries as have been undertaken, it would appear that there might be net additional employment in agriculture to the extent of about 30 per cent of the area benefited by irrigation, soil conservation and flood control. In schemes for land reclamation and for settlement of landless workers, the resulting employment would represent more or less a net addition. If a norm of 4 acres per person employed is assumed, the resulting additional employment works out as follows : about 1.5 million from irrigation, 1.2 million from soil conservation and land reclamation, 300,000 from flood control, drainage and anti-water logging schemes, and about 500,000 from settlement of landless workers on land, making a total of about 3.5 million.

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