3rd Five Year Plan
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Introduction || Planning Commission
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Chapter 26:


84. Large-scale developments are envisaged in the field of organic chemicals almost for the first time. These may be said to have followed the build-up in the demand for many items as a result of the development of allied chemical industries over the last decade e.g. plastics, dye-stuffs, drugs. New industries visualised in the Third Plan like nylon and terytene and further expansion in the existing lines over the next five years have been taken into account in fixing the levels of development appropriate in this field. The undermentioned targets for the three major items have to be regarded as provisional since it is not yet clear at what pace the industries which would be important customers for the products and are to be established in the country for the first time, are likely to develop.


capacity target for 1965-66
phathalic anhydride 15000
phenol 15000
methanol 40000

Manufacture of plastic monomers, vinyl chloride and styrene, butadiene, carbon black and rubber chemicals, butyl alcohol and its esters, citric acid and oxalic acid, which are proposed to be undertaken for the first time in the private sector, deserves mention in this connection.

85. Major developments are also envisaged in the public sector through the Basic Chemicals and Intermediates (BCI) plant near Panvel in the Maharashtra State, the B.C.I, project as the supplier of intermediate chemicals, is firmly linked with the synthetic drugs project proposed for establishment at Sanatnagar near Hyderabad. As a result of these two projects, valuable technical know-how in a virgin field is expected to become available during the Third Plan period. The programme under the BCI project covers the manufacture of 40 organic intermediates with an aggregate output of 25,160 tons. Provision is also being made for further expansion in due course by about 15,000 tons. Several basic inorganic chemicals are consumed in the manufacturing operations which include inter alia chlorination,. sulphonation, alkaline fusion, nitration, reduction and oxidation. The manufacture of some of these inorganic chemicals is also envisaged in captive plants within the project.


86. A project report is to be obtained with a view to establishing in the public sector a plant for the manufacture of high viscosity index lubricating oil products. Government is also considering a proposal for establishing a plant for this purpose in association with private enterprise. Apart from this, developments in the field of refined, petroleum products are visualised entirely in the public sector. The programme includes the completion of the refineries under construdtion at Nunmati (Gauhati) and Barauni and the establishment of a third public sector refinery with an annual capacity of about two million tons of crude throughput in Gujarat. External credit and technical assistance have been assured for this third refinery and the site for it is being selected, 'inc product pattern of this refinery will have to be designed, as in the case of the Nunmati and Barauni refineries, to cover as far as possible the deficits in kerosene and diesel oil. Every effort is being made for the construction of the refinery by the middle of 1964, and on present indications it is likely to be in -a position to ;undertake a throughput of approximately 3.5 .million tons of crude oil during the Third Plan period. The estimated requirements of end-produdts by 1965 -and the expected output of the refineries in operation and under construction are presented in the following Table :

Table 12 Estimated requirements of petroleum products
(ooo tons)

end-products estimated requirements by 1965 refineries in operation (private sector) refineries under construction (public sector) total production* deficit or surplus
as given m Draft Outline as estimated by Oil Advisory Committee in March, 1961
kerosene 2200 2660 916 366 1282 —1378
High speed diesel oil 1800 2607 1064 514 1578 -1029
motor spirit 1300 1123 1023 514 1537 +414
avaition turbine fuel (ATF) 300 408 189 189 -219
aviation spirit 60 53 10 10 -43
furnace oil





1930 -823
light diesel 700 872 511 208 719 -153
bitumen 700 628 394 120 514 -114
jute batching oil 100 80 47 47 -33
vapourising oil, mineral turpentine,solvent oil, paraffine wax 100 130 46 46 -84
lubricants 500 409 21 50 71 -338
total 9960 11723 5641 2282 7923 -4214
(Motor spirit)

87. The requirements of furnace oil might prove to be higher if fiscal incentives are given to encourage industries in areas far removed from the coal fields to change over from coal to fuel oil. This matter is under examination.

88. In common with several other countries, India will face the problem of imbalance between the output of motor spirit (gasoline) and the demand for it. While exports have so far provided an outlet for surplus motor spirit, the disposal of it, in this manner, is expected to become more and more difficult with the all-round expansion of refining capacity in neighbouring countries. The solution to the imbalance problem will have to be found by the adoption of the following methods :

  1. Technological measures to increase the production of middle distillates. There is, however, only a limited scope for varying the production pattern. The question of increasing the production of kerosene and H.S.D. by changing the specifications in the flash point of these two products is being examined.
  2. Appropriate fiscal measures which will retard the growth of consumption of high speed diesel oil. This has been done to some extent in 1960-61.
  3. Promoting the use of mixed fuels which will reduce the demand for H.S.D. and at the same time increase the - off-take of gasoline. Existing diesel vehicles could use mixed fuels containing upto 10 per cent gasoline without any changes being effected in them.
  4. The surplus of motor spirit can also be reduced or avoided by diverting the light distillate (naphtha) from which motor spirit is made to other productive uses such as production of nitrogenous fertilisers and petro-chemicals. Naphtha has already been decided upon as the feed stock for the fertiliser plants to be constructed at Trombay, Visakhapat-nam, Gorakhpur and Ennore (near Madras) and for the third stage expansion of Fertilisers and Chemicals, Travancore.

89. The public' sector programmes in this field also visualise a project for the fractiona-tion of the Nahorkatiya natural gas to isolate the ethylene, butane and other aliphatic hydrocarbons and make them available to petrochemical industries. The residual gases are proposed to be fed to the Nahorkatiya fertiliser project and the power plant planned for establishment close to the petro-chemical! plants.


90. A beginning has been made in the later years of the Second Plan in the diversification of the production of essential drugs in both the public and private sectors. This is illustrated by the arrangemeats for gtrcptomyam maaufac-turc by Hindustan Antibiotic's Ltd., and the synthesis of vitamin A from lemongrass oil by two leading pharmaceutical establishments in Bombay. New developments in this field arc projected by Government as well as private enterprise which are expected to ensure the availability of essential drugs at reasonable prices and based on indigenous raw materials.

The public sector projects in this field which arc estimated to involve a combined outlay of Rs. 27.3 crores arc :

  1. Synthetic Drugs Project at Sanatnagar, Andhra Pradesh, covering the manufacture of sulpha drugs, vitamins, phena-cetin, other synthetic drugs (INH, lumi-nal, chloroquin, etc.) and intermediates (including ASC at 1500 tons per year)— annual value of output, Rs. 6.4 crores.
  2. Antibiotics Plant near Rishikesh, Uttar Pradesh, covering the manufacture of penicillin, streptomycin, chloro and other tetracyclins, new antibiotics. Annual value of output, Rs. 26 crores.
  3. Phyto-chcmical Plant in Kcrala, covering the manufacture of caffeine, cphcdrinc, digitalis glycosides, lanatazides, ergot alkaloids, atropine, gcopolemine, rcscr-pine, papin, vitamin P-yearly output, Rs. 0.77 crores.

In connection with the manufacture of phyto-chemicals the establishment of modern drug farms has assumed crucial importance. Provision has been made in the Five Year Plan of some of the States for these related developments.


91. Within the overall target of 85,000 tons set for plastic materials as a whole, pride o1 place has been assigned to polyolefines (polyethylene, etc.) their proposed share being 27,000 tons. Next in importance from the point of view of the rate of growth envisaged are polystyrene and polyvinyl chloride for each of which appropriate targets are being fixed. Polyethylene has a high priority as a lining material for bagging fertilisers on account of its high resistance to moisture. Ethylene of petro-chcmical origin is expected to come into use as the raw material for its production on account of its price advantage as compared to alcohol. This is a field in which revision of the target might merit favourable consideration from the export angle as well as the potential of some of the plastics to provide substitutes for scarce materials like rubber and leather.


92. The manufacture of soft eekc frera lignite at Neiveli at the rate of 380,000 tons per year is a major spillover scheme from the Second Plan. Development of further capacity is prima facie desirable in the context of the heavy denudation of forests that has been taking place from charcoal production. The public sector programme includes a proposal for the establishment of low temperature carbonisation plants for the production of soft coke. The approach to developments in this field is, however, flexible.


93. The capacity target for cement fixed at 15 million tons by 1965-66 represents about 50 per cent increase over the level expected to be reached by the end of the Second Plan. Recent trends in the demand for cement indicate that the estimated requirements for 1960-61 which were taken as the basis for the projections of growth, may have been somewhat on the low side. This matter is expected to be reviewed in another year. The possibility of having to revise the cement target upwards, if restraint on construction activities is not considered necessary or desirable, cannot be ruled out.

In view of difficulties in expanding the output of limestone in step with the full requirements of the cement industry, greater attention should be devoted to the use of granulated slag from the steel works. Not much progress was made on the use of blast furnace slag in cement manufacture during the Second Plan.


94. Important developments in this industry will be the manufacture of optical and ophthalmic glass. The former is of basic importance to the instruments industry and its manufacture is to be started during the Third Plan on the basis of the know-how and experience built up by the Central Glass and Ceramic Research Institute of the Council of Scientific and Industrial Research. Manufacture of ophthalmic glass is to be undertaken at Dureapur with aid from U.S.S.R


95. The plant for the manufacture of raw films, X-ray films and sensitised papers proposed to be set up near Ootacamund in Madras State with the technical collaboration of M/s. Bauchct ct Cic of France is a major public sector project falling in this field. The capital investment on the scheme and its turnover arc estimated at Rs. 8 crores and Rs. 5 crores respectively. On reaching full production under its current phase of development, availability of these products is estimated at 4.8 million sq. meters of films and 1.5 million sq. meters of photographic paper.


96. Programmes for the manufacture of consumer goods in the public sector occupy a relatively miner position in terms of direct investment in organised industries, the only exception being the manufacture of essential drugs discussed in para 90 above. Watches and cameras are two items of durable consumer goods projected for manufacture in the public sector with technical collaboration from Japan. The production of the latter will be developed by the National Instruments Factory, Calcutta. The interest of the public sector in the field of consumer goods will also be manifested through assistance afforded for the establishment and expansion of cooperative enterprises. Sugar and cotton spinning mills will continue to be the main beneficiaries of such assistance. The programmes and targets proposed for the major consumer goods industries under the Third Plan are briefly outlined below.

97. Cotton textiles.—The requirements of cotton textiles at the end of the Third Plan have been calculated on the assumption that 8450 million yards of cloth will be needed for domestic consumption and 850 million yards for export. The figure for domestic consumption provides for an increase of about 20 per cent over the estimated level of demand in 1960-61 ; in other words it allows for an annual increase of 2 per dent in population and 2 per cent in per capita consumption. For the purpose of this calculation, the demand in 1960-61 has been assumed to be about 7000 million yards. The actual availability of cotton cloth for domestic consumption that year was of the order of 6750 million yards, but this relatively low figure is believed to have been mainly due to a shortage of raw cotton consequent on a poor cotton crop in 1959-60 and cannot be taken to reflect the actual level of demand in 1960-61. This view is also supported by the high prices ruling for cotton cloth which have had a restrictive effect on the offtake. The figure taken for exports is not much higher than the average level prevailing during recent years, as for some time past exports have been stagnant and have not shown any decidedly upward trend.

98. Out of the total target for cotton cloth of 9300 million yards, 3500 million yards have been allocated as the share of the decentralised sector (handloom, powerloom and khadi). The production target allocated to the mill sector is 5800 million yards as against the current level of output and estimated effective capacity of about 5000 million yards. To achieve the additional production of 800 million yards in the mill sector, it is envisaged that about 25,000 automatic looms will have to be installed during the Third Plan.

99. On the basis of a cloth production target of 9300 million yards, and taking into account also the yarn required for purposes other than cloth weaving, e.g. hosiery and newar, the yam production target has been fixed at 2250 million Ib. To reach this target of 2250 million Ib of yarn it will be necessary to increase the active spindleage of the mills to about 16.5 millions as compared to 12.7 millions at the end of the Second Plan. The addition that may be secured through the activisation of idle spindles as a result of modernisation programmes will ultimately determine the number of spindles required to be installed through new units and expansions. The implications of the general observations made in para 21 regarding investment on replacements have to be further examined and the contributions towards additional effective spindleage which may be obtained through modernisation programmes and through the establishment of new mills assessed on realistic basis. The estimated gross investment will, however, remain substantially the same whether the bulk of the additions to spindleage comes from modernisation or from new units. Out of the additional capacity for spindles and looms envisaged for installation during the Third Plan, it is proposed that a substantial proportion of the additional loomage shall be export— oriented.

100. Rayon and staple fibre.—The programme for the rayon and staple fibre industry in the Third Plan period envisages expansion of capacity from about 100 million Ib (52.3 million Ib of rayon filament and 48 million Ib of staple fibre) at the end of the Second Plan to 215 million Ib (140 million Ib of rayon filament and 75 million Ib of staple fibre). This expansion programme provides inter alia for an increase in the per capita consumption of rayon fabrics from 1.3 yards in 1960-61 to 1.8 yards in 1965-66. The overall target for rayon filament comprises 20 million Ib of tyre cord yarn required for the automobile tyre industry, 76 million Ib of viscose filament, 24 m'liion Ib of acetate yam, 10 million Ib of cuprammonium and 10 million Ib of synthetics

101. Considerable importance, has been attached to the phasing of investments in this industry so as to reduce the burden on foreign exchange on current account. Thus it is proposed that expansion of capacity for the manufacture of rayon grade pulp should be given preference over further expansion of output of rayon filament and staple fibre The position will have to be periodically reviewed so as to ensure that additional capacity in this field is created in step with the progress in the manufacture of the raw materials. The future planning of this industry, particularly staple fibre, will also be influenced by the extent to which it proves possible to increase ths production of long staple cotton, since staple fibre can be regarded as a substitute for it.

102. Paper and newsprint.—The expansion programme of the paper and paperboard industry broadly conforms to the aim of achieving self-sufficiency in respect of this essential item. To meet the estimated demand of 700,000 tons by 1965-66, il is proposed to increase the capacity of the industry from the present level of 410,000 tons to 82Q..OOO tons by the end of the Third Plan period. A sizeable proportion of the additional capacity to be established dining the Third Plan period will take the form of small paper plants using local raw materials.

103. The Security Paper Mill to be established at Hoshangabad with an annual capacity of 1500 tons envisages the production of specialised paper on the import of which a considerable amount of foreign exchange is nt present expended.

104. In the case of newsprint, a five-fold expansion from 30,000 tons to 150,000 tons has been proposed in :tep with the anticipated growth of demand during the Third Plan period. Additional capacity is expected to be achieved through the doubling of the Nepa mills and through the establishment of new newsprint factories based on baggasse and on the soft woods available in tb? Himalayan region.

105. For the achievement of these targets, the paper and newsprint industries will have to depend upon new raw materials ir. place of bamboo which has so far been their mainstay. New industrial uses of bamboo, e.g. for rayo.i grade pulp will also rccentuate the shortage of bamboo for f-bc paper industry. While ;)ew plantation and replantation programmes can, to some extent, provide a long term solution, in the Third Plan the paper and newsprint expansion will have to depend heavily on the use of bagasse which is currently being use'.' as fuel by the sugar mills. The diversion of bagasse to the the paper industry will have to be based on providing the sugar mills with an
alternative fuel

106. Sugar.—In the case of the Sugar industry, the stage of self-siist.i.'ned growth has been reached by the beginning of Ihe Third Plan as a result of the progress made in the manufacture of mill machinery in the country. A second major factor which would influence the pace of growth of this industry is the expected availability of sugarcane. The Third Plan has envisaged expansion of sugarcane output to 100 million tons mainly through improvements in yield per acre. After allowing for diversion of sugarcane for jaggery manufacture and other miscellaneous uses, about 35 million tons of sugarcane are expected to be available for sugar production. To cope with the crushing of these supplies in this seasonal industry, expansion of capacity to 3.5 million tons per year (in terms of gur) has been projected under the Third Plan. Cooperative industry during the Third Plan and it is estimated that their share of the enterprises are expected to make further progress under this overall mill capacity will rise to about 25 per cent. A provision of about Rs. 6 crores has been envisaged in the Plan for contribution by State Governments to the share capital of cooperative sugar factories, Throughout the Third Plan period, the production of sugar in the country is expected to meet the demand in full and the surplus will be exported.

107. Vegetable oils.—In the case of vegetable - oils, further expansion of production is largely dependent on the programmes for cultivation of the five major oilseeds, viz., groundnut, sesamum, rape and mustard, linseed and castor. The production of these oilseeds is planned to be raised from an estimated 7.1 million tons in 1960-61 to 9.8 million tons by 1965-66. From the trends of consumption and the rate of population growth, it is felt that the availabilities of edible oil will not be adequate to provide for sizeable exports after meeting the internal needs in full. In order to augment the supply of vegetable oils, various proposals; form a part of the overall programme, one of which is the expansion of the production of cotton seed oil to one lakh tons per year. The realisation of this target will depend on the success achieved in promoting the use of dotton seed cake as an animal feed instead of the whole seed and in ensuring the offtake of the cotton linters as an industrial raw material. The additional production of cotton seed oil is largely to be used in the manufacture of vanas-pati thereby relieving the pressure of demand on groundnut oil. Another important programme calculated to augment the vegetable oil resources which has been envisaged in the Plan, is to increase solvent extraction of oil cakes to 160,000 tons of oil per year from its current level of about 40,000 tons. Oil thus produced would be used chiefly for industrial purposes. Other subsidiary sources of supply of oil, though relatively of minor importance from the point of view of tonnage output, have also been borne in mind, e.g. rice bran oil. The overall production of vegetable oils inclusive of coconut oil is expected to amount to about 2.9 million tons by 1965-66.


108. The nature and levels of industrial development proposed under the Third Plan present a major challenge to both the public and private sectors in view of the manifold problems to be attended to in a limited period of time. Resources and foreign exchange, though important, are not the only problems which have to be tackled. Those involved in maintaining rising levels of production and at (he same tune carrying out the expansion of steel plants have been found by the two private sector companies to be quite complex and the fullest use must be made of their experience in overcoming the difficulties that may arise in expanding the public sector plants while at the same time bringing them to full production.

109. For machine building activities, which figure prominently in the public sector programmes, as well as for machinery manufacture in the private sector, designs development and project engineering are of paramount importance. In regard to the latter, which has been briefly referred to in paragraph 6, the N.I.D.C. is arranging to assume responsibilities with reference to its own public sector projects as well as those of the Commerce and Industry Ministry, and a Technological Consultancy Bureau was established by it in 1960-61. The functions of the Bureau will include preparation of preliminary studies, investigation and selection of sites, preparation of detailed project reports and the designing of structures. As regards designs development, though to begin with the fabrication of plant and equipment will necessarily be based predominantly on 'bought out' designs, the object should be to manufacture in the not distant future industrial machinery on the basis of indigenous designs. In the public sector, it is intended that the nucleus organisations functioning under Hindustan Steel Ltd. and Sindri Fertilisers and Chemicals should be rapidly expanded and similar agencies brought into being in an appropriate manner under other machinery projects. A central designs institute for machine tools is projected at Bangalore. Similar programmes should be accorded high priority in the private sector also and appropriate steps taken to push forward these programmes vigorously. Since performance guarantees are customary in this field, establishment of the necessary testing facilities will also become essential. A high voltage laboratory is being set up for the testing and design development of switchgear at Bhopal. This problem will have to be attended to by the private sector also wherever necessary.

110. Since the industrial sector has also to play its part in the export drive, thought and attention must be given not only to securing expansion of output but also to all factors that contribute to enhanced productivity and reduction of costs. As regards production costs, the high levels are partly attributable to factors capable of remedy, if the sizes of plants proposed for establishment are of optimum size and economic outlets for by-products and/or co-products as in the case of electrojycic caustic soda plants, are also developed. A high level of utilisation of capacity will be conducive to economies on overheads. These are aspects that should be continuously studied by Development Councils at the expert level.

111. Many of the heavy industries envisaged for development, e.g. steel plants, petroleum refineries, fertiliser factories require very large quantities of water for process use. Machine building projects, which give rise to concentration of industrial labour at the selected location, similarly demand largescale water supply facilities for potable and other township requirements, though the direct consumption in the processes is not considerable. In the studies undertaken by special committees entrusted with the task of recommending suitable sites for some of the major industrial projects included in the Third Plan, the availability of water has figured as a very material factor influencing the ultimate choice. It has been noted that several areas which are otherwise well suited for the location of heavy industries have had to be ruled out owing to lack of water on the scale demanded. Without long-term planning of water supplies, the opportunities for industrialisation in such areas will be thwarted. No less important is the problem of effluent disposal, particularly in the case of chemical and allied industries. Without proper arrangements for treatment and disposal of effluents, the pollution of the rivers in proximity to chemical factories—many chemical plants are getting established in the upper reaches of the Ganges and other rivers—will present a serious public health problem. These twin problems should receive attention commensurate with their growing importance in detailed studies relating to factors ancillary to industrial expansion.


112. The gains from the industrial development, as formulated for the Third Plan, will be many sided. The rapid growth of public sector investment and output will considerably further the objective of a socialist pattern of society. The dependence of some of the vital sectors of the economy like agriculture, electric power, railways, motor transport on imports of equipment and material from abroad will be substantially reduced. Within the industrial sector itself, the development of heavy engineering and machine-building will enable a large amount of capital equipment required for industries, which is at present imported, to be manufactured here. The imports required for the maintenance of a number of important industries will also be reduced through the production of the basic raw materials within the country itself, e.g. rayon grade pulp, organic chemicals, synthetic rubber, intermediates for dyestuffs and the drug industries. Thus, with the completion of the industrial programme drawn up for the Third Plan, the essential foundations for self-sustaining growth will have been laid. In 1965-66 the general index of industrial production, which is one of the conventional indicators of progress, is expected to reach the level of 329 (1950-51=100) as against 194 provisionally estimated for 1960-61 and 139 for the last year of the First Plan.

ANNEXURE I Third Five Year Plan 1. Industrial Projects of Central Government

name of the scheme location total investment
(Rs. crores)
foreign exchange component
capacity in 1965-66 (final capacity in the case of expansion
A. projects under execution and carried over from the Second Plan (a)
1 completion of the three steel plants Rourkela }
Bhilai Durgapur }
50.0 20-0 3 million tons of steel ingots and 700,000 tons of pig iron sale.
2 Rourkela fertiliser factory . Rourkela } 120,000 tons of nitrogen.
3 heavy machinery plant Ranchi } 45,000 tons of finished machinery.
4 foundry forge shop Ranchi } 80.0 55-0 94,000 tons of castings and forgings.
5 mining machinery plant Durgapur } 30,000 tons of mining machinery.
6 heavy electrical plant . Bhopal 16.0 7-0 Rs. 12-5 crores worth of electrical equipment.
7 drug projects—
(a) synthetic drugs plant Sanatnagar (Andhra Pradesh) Rs. 6 -4 crores worth of drugs
(b) antibiotics plant . Rishikesh (Uttar Pradesh) Rs. 25 -8 erores worth of antibiotics.
(c) phyto-ehemicals plant Munnar (Kerala) 30-0 15-0 Rs. 77 lakhs worth of phyto-ehemicals.
(d) surgical instruments plant Guindy (Madras) Rs. 2 -8 crores worth of instruments.
8 organic intermediates plant . Near Panvcl (Maharashtra) 11-0 6-0 25,000 tone of organic intermediates.
9 expansion of Hindustan antibiotics Pimpry (Maharashtra) 0.5 neg. 45,000 kgs. of streptomycin and 1 -5 tons of tetracyclines
10 Trombay fertiliser factory Trombay (Maharashtra) 25-0 13-0 90,000 tons of nitrogen.
11 Nahorkatiya Fertiliser factory Nahorkatiya (Assam) 12-0 7-0 32,500 tons of nitrogen.
12 Neiveli fertiliser factory 1 15-68 11-56 70,000 tons of nitrogen.
13 briquetting and carbonisation plant Neiveli (Madras) 13.84 8-61 380,000 tons of carbonized briquettes.
14 Neiveli thermal power plant 9-67 5-86 250 MW
15 Nunmati oil refinery Nunmati (Assam) 8.5 4.9 0 -75 million tons of crude oil.
16 Barauni oil refinery Barauni (Bihar) 23-0 7-5 2 -0 million tons of crude oil
295 -19 161-4
B. new projects for which external credits are already assured, wholly or partly
17 expansion of heavy machinery plant Ranchi 14-0 11-0 80,000 tons of finished machinery.
18 expansion of foundry forge Ranehi 10-0 5-5 153,000 tons of eastings and forgings.
19 expansion of mining machinery plant Durgapur 15-0 10-0 45,000 tons of mining machinery.
20 gecond and third heavy electrical projects. not yet decided . 69 .0 45-0 scope yet to be finally decided in the case of the third project.
21 heavy machine tool ''project Raanchi 11-0 9-0 Rs. 3-4 crores worth of machine tools.
22 precision instruments project not yet decided . 8'0 6-0 Rs. 20 crores worth of instruments.
23 opthalmic glass project Durgapur 2-6 2-0 300 tons of ophthalmic glass.
24 raw film project Ootacamund 8-0 5-0

6 -3 million sq. meters of raw films, photographic paper etc.

25 watch factory Bangalore 2-5 1-5 360,000 watches.
26 expansion of Bhilai steel plant . Bhilai 138-0 56-0 2-5 million tons of steel ingots and 300,000 tons of pig iron for sale.

name of the scheme location total investment (Rs. crores) foreign exchange component (Rs. crores capacity in 1965-66 (final capacity in the case of expansion)
27 expansion of Durgapur steel plant Durgapur 56-0 27-0 1 -6 million tons of steel ingots and 303,000 tons of pig iron for sale.
28 expansion of Rourkela steel plant Rourkela 900 50-0 1 -8 million tons of stes ingots.
29 expansion of Hindustan Machine Tools Bangalore 3-0 2-0 Rs. 7 crores worth of machine tools.
30 basic refractories project Bhilai 3-0 1-5 scope yet to bs dscidsd
31 new machine tool works in Punjab exact location not yet decided 5-0 3-0 1000 machine tools (Rs 3-5 crores)
32 Gujarat oil refinery exact location not yet decided 30'0 15-0 2 million tons of crude oil
33 expansion of Praga Tools . Secunderabad (Andhra Pradesh) 1-0 0-5 I Is. 1 crore worth of machine tools.
34 heavy structural works not yet decided 6-0 @ 4-0 10,000 tons of heavy struc-turals on single shift basig
35 heavy plate and vessels works not yet decided

18,000-20,000 tons of chemical plant machinery on single shift basis.
36 Gorakhpur fertiliser factory Gorakhpur 18'0 8-0 80,000 tons of nitrogen.
37. Security paper mill Hoshangabad (Madhya Pradesh; 1 5-5 4-0 1500 tons of security paper.
38 expansion of Hindustan Cables Rupnaraianpur (West Bengal) . 3-5 1-2 2,000 miles of dry core
cables and 500 miles of plastic insulated city cables on double shift basis.
499-1 267-2
C. other projects (b)
39 Bokaro steel project . Bokaro 200'0 100-0 one million tons of steel ingots and 3 50,000 tons of pig iron for sale.
40 alloy and tool steels plant . Durgapur 50-0 20-0 48,000 tons of finished products.
41 expansion of Bhopal heavy electrical plant Bhopal 19-0 8-0 Rs. 25 crores worth of
42 expansion of Hindustan Shipyard (expansion and subsidy) Visakhapatnam 10.0 1-5 electrical equipment.
43 dry dock project of the Hindustan Shipyard. Visakhapatnam 2-0 0-5 } 50,000-60,000 DWT.
44 second shipyard Cochin 20-0 5-0 }
45 expansion of FACT Alwaye (Kerala) 8-0 5-6 60,000 tons of nitrogen.
46 expansion of Nepa mills Nepanagar (Madhya Pradesh) 4-0 3-0 60,000 tons of new print.
47 salt development 3-0 0-8
48 heavy compressors and pumps project not yet decided 15'0 10-0 scope yet to be decided.
49 ball and roller bearing project . not yet decided 8-0 6-0 2 million bearings.
50 additional capacity for machine tools
31 second heavy structural works } not yet decided 15-0 10-0 scope yet to bs decided.
52 second plate and vessel works
53 marine diesel engine factory not yet decided . 3-0 1-5
54 expansion and modernisation of the Govt. alkaloid factory. Ghazipur (Uttar Pradesh) 0-4 neg.
55 lubricating oil plant- 12-0 6-0 100,000 tons of HVI Lubr icants.
56 low temperature carbonisation plants 22-0 15-0 2 -2 million tons of coal.
57 Neiveli lignite high temperature carbonisation plant and connected facilities for pig iron production Neiveli (Madras) 25-0 13-0 1 million tons of lignite.
58 townships at project sites 50-0
466-4 205-9
total 1260 -69 634-5

@According to the latest estimates these projects will cost Rs. 10.1 crores and will need foreign exchinae expenditure of Rs. 6.4 crores.

ANNEXURE I Contd..2, Mineral projects of the Central Government
(Rs. crores)

name of the scheme total outlay foreign exchange component
A. projects under execution and carried over from the Second Plan (a) coal
coal programme of N.C.D.C. 8-00
washeries at Bhojudih, Patherdih and Dugda 7-50 4-00
15-50 4-00
oil : Oil India
crude pipe line 8-00
share capital in Oil India 1.42
Neiveli lignite project
mining scheme 3-29 1-30
housing 3-00
6-29 1-30
iron ore . Kiriburu 6-00 3-93
Total 37-21 9-23
B. new projects for which external credits are already assured, wholly or partly (b) coal :
additional coal (17 m. tons) from N.C.D.C. 57-00* 28 -00
Singareni expansion (3m. tons) 20-00 6-00
maintenance of production 16-00 10-00
central workshop 8-00 2-70
drills for prospecting 2-00 1-40
advance action for the fourth Plan 10-00 7-00
central ropeways 16-00 8-00
additional washing capacity for coking coal 20-00 11 -30
total 149 -00 74-40
Oil :
oil exploration 115-00 53-53
Iron ore : Bailadila iron ore project 17.00 8-55
copper projects
Khetri copper project
Daribo copper project
10-00 2-50 } 6-36
12 -50 6-36
total 293-50 142 -84
C other projects (b)
non coking coal washeries 12.00 7.00
Neiveli lignite project :
expansion of mine output 3.80 1.45

*In addition some further amount may be needed for deep and gassy mines.

(Rs. crores)

name of the scheme total outlay foreign exchange component
oil :
Oil distribution programme 10.00
Oil India 8-00
crude oil pipe lines 4.00
oil products pipe lines 37-00 10-00
59-00 10-00
other minerals :
Sikkim copper project 2-50 1-30
Panna diamond project 1 -50 0-60
manganese ore bencficiation plants 5-00 1 -00
project for sulphur from pyrites 5-00 2-50
Kolar goid mines 1 -50 0-84
Hutti gold mines 0,50 0-20
expansion of Kiriburu 6-00 3-00
uranium mining, fabrication and plutonium extraction plant 24-00 8-17
46-00 17-61
surveys :
G.S.I, expansion 10-00 3-19
I.B.M. expansion 5-00 1-89
15-00 5-08
grand total 466.51 193.21

3. assistance to institutional agencies and other miscellacoui requirements—Central

(Rs. crores)

name of the scheme total outlay foreign exchange component
assistance to Mysore Iron and Steel Works 5-0
N.I.D.C. 20-0
loans to institutional financing corporations 26-0
loan assistance to plantation industries 11-7
National Productivity Cour oil 1 -3
metric system 7-0
Indian Standards Institution 3-6

ANNEXURE II 1. Industrial projects of State Governments

name of the scheme location total investment
component (Rs. crores)
foreign exchange (Rs. crores) annual capacity in 1965-66 (final capacity in the case of expansion)
schemes with a total outlay of Rs. 50 lakhs or more
A. projects spilling over from the Second Plant (a)
1 expansion of Andhra Pradesh Mills Rajamundry(Andhra Pradesh) 4.00 2.49 18,000 tons of paper.
2 expansion of Mysore Iron and Steel Works Bhadravati (Mysore
(a) steel expansion programme 2.00* 3.50 100,000 tons of steel ingots.
(b) expansion of the ferro-silicon plant 0.95 0.37 20,000 tons of ferro-silicon.
3 expansion of Government electric faetoi Bangalore (Mysore) 0.90 0.48 electric transformers : 200,000 KVA electric motors : 60,000 h.p. switchgear and switchboards worth Rs. 40lakhs.
4 Durgapur coke ovens Durgapur (West Bengal)

(a) gas grid 2-25 2.25 7 -5 million c.f.t. of gas per day
(b) tar distillation plant 0.50 0.17 100 tons per of tar day coke : 650,000 tons. benzene : 0 -725 million gallons

(c) doubling of coke ovens and by products plant 4.20 toluene : 0 -235 million gallons
napthalene : 1200 tons and road tar.
B. new projects included in the Third Plan (b)
5 natural gas distribution (Assam) 1.65 0.30
6 gas fractionation and transmission scheme. (Assam) 1.50 0.50
7 expansion of Bihar superphosphate factory. Sindri (Bihar) 0.50 0.15 46,000 tons of superphosphate
8 expansion of high tension insulator factory. Ranchi (Bihar) 0.58 0.17 4,800 tons of insulators
9 fertiliser project-)- 20.00 10.00 80,000 tons of nitrogen.
10 cotton spinning mill Samba (Jammu and Kashmir) 0.50 0.25 12,000 spindles.
11 pilot iron and steel plant (Madras) 0.75
12 steel rolling mill (Madras) 1.00 20,000 tons of rolled products
13 distribution of gas in Bombay (Bombay) 0-50 20 million c.ft. of gas per day
14 reorganisation of the workshop at Nangal. Nangal (Punjab) 0.50

15 refractories plant Churk (Uttar Pradesh) 0.85 0.30 24,000 tons of refractories.
16 expansion of the precision instruments factory Lucknow (Uttar Pradesh) 0.69 0.22

17 organic chemicals scheme tt Durgapur (West Bengal) 4.00 2.00 caustic soda : 6,600 tons phenol : 6,600 tons. chlorine : 5,800 tons. Phtyalic anyhydride: 6,600 tons formaldehyde : 5000 tons. penta-chlorophenol : 1000 ton
18 cotton spinning mill . miscellaneous shccmes costing less than (West Bengal) 0.65 8.08 25,000 spindles
Rs 50 lakhs each 15.61 4.00
grand total 64.08 24.98

ANNEXURE ll—contd. 2. mineral projects of the State Governments
(Rs. crores)

name of the scheme total outlay
new schemes included in the State plans with total outlay of Rs. 50 lakhs or more
Kalakot coal mining project (Jammu and Kashmir) 0-60
Rajasthan mining corporation (exploitation of Palana lignite and flourspar at Dungarpur) 2-75
Board of Mineral Development of Mysore (exploitation of iron and manganese ores in the State) 0-90
miscellaneous schemes/programmes costing less than Rs, 50 lakhs each 6-75
11 -00

3. outlay requirements of States for participation in private industries and other
programmes of assistance to private sector (Rs. crores)

name of the scheme location total investment remarks
industrial development areas Andhra Pradesh, Assam, Bihar, Gujarat, Kerala, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Uttar Pradesh, West Bengal. 5-40

State industrial development corporation Andhra Pradesh, Bihar, Kerala, Madras, Uttar Pradesh. 6-08
State participation in private sector projects Assam, Jammu and Kashmir, Kerala, Mysore, Punjab, West Bengal. 9-47

development of rubber plantation Kerala 4-65 an area of 85000 acres
total 25-60

(a) Figures of total cost and foreign exchange are the amounts expected to spill-over into the Third Plan.
(b) Figures of total cost and foreign exchange represent estimated outlays for the execution of the schemes. In the case of some of the listed projects, part of the expenditure would spill-over in to the Fourth Plan having regard to the gap between the provision for industries and minerals and the outlay requirements.

ANNEXURE III Expansion of selected major industries and minerals—progress and targets

name of industry unit 1950-51 Production 1955-56 production 1960-61 1965-66 fixed investment during 1961-66 (Rs. crores) foreign exchange component of fixed in- vestment Rs. crores)
estimated capacity estimated production capacity production
A. metallurgical industries
1 iron and steel :
(i) steel ingots million tons 1-4 1'7 6-0 3-5 10-2 9-2 }
(11) finished steel . 0'98 1-3 4-5 2-2 7-5 6-8 }
(Hi) pig iron for sale ,, 0-35 0-38 0-9 0-9 1-5 1-5 } 640-0 305-0
(iv) alloy, tool and special steel (finished) 000 tons 40 40 200 200 }
(v) greyiron castings million tons n.a. n.a. 1-2 1-2 }
(n) steel castings 0-10 0-05 0-20 0-20 } 30-0 (a) 15.0(a)
(vii) steel forging 000 tons 60 35 200 200 }
2 ferro-manganese, electro-thermal " nil nil 150 100 220 200 2-5 2-0
3 ferro-silicon " n.a. n.a. 5 6 40 40 2-0 1-2
4 aluminium " 3-7 3-7 18-2 18-5 87-5 80-0 65-0 32-0
5 copper (fire refined and electrolytic) " 6-6 7-5 9-0 8-9 22-0 20-0 0.6(a) GA(h)
6 lead . " 0-8 2-1 6-1 3-5 8.5 8.0 } 7-3 2.7
7 Zinc nil nil 15 15 }
8 tungsten carbide tons 5.0 4-0 69 25 1-0 0.5
B. mechanical engineering industries
9 industrial machinery(1)
(i) cotton textile machinery Rs. crores n.a. 4.0 4.0 90.0 22.0 20.0 5.0 3.0
(ii) cement machinery " 0.34(a) 1.1 0.6 4.5 4.5 } 3.0 2.0
(iii) sugar machinery ,, 0.19 10.5 3.3 11.0 10.0 }
to 12.0
(iv) paper machinery Rs. crores 0.7 8.5 6-5
to 7.0
7.0 4,0
(v) dairy machinery ^ ^ 0.25 Neg. 2.5 2.5 0.5
(vi) industrial boilers
000 tons 3.7


29.0 }

25.0 }

10.0(d) 5.0(d)
(vii} cranes 2.5 1.5 60 } 1 60 }
(viii) machine tools Rs. crores 0.34 0.78 7.0 5.5 30.0 30.0 40.0 27.0
(ur) heavy machinery building (steel and chemical machinery)

000 tons

80 (e) }
(x) coal mining machinery " 45 30 } 119.0 81.5

(xi) heavy plate and vessel works (pressure vessels, heat exchangers and other types of chemical plants a equipment) "

40 30 20-0 12-0
10 structural fabrication (including heavy structural shop) . "

90 500 150 1 100 1000 25.0 10-0
11 precision instruments industrial and scientific Rs. crores

3-6 3-0 23 12 9.0 6.5
12 surgical instruments million pieces 2.5 2.5 2.7 2.0
13 watches 000 nos. 360(i) 240(i) 4.0 2.5

ANNEXURE Ill—contd.

name of industry unit 1950-51 production 1955-56 -produc- tion




fixed in- vestment during 1961-66 (Rs.crores) foreign exchange component of fixed investment (Rs. crores)
estimated capacity estimated production capacity production
14 railway rollingjstock and components 2.0 1.0
(i) locomotives:
steam . nos. 7 179 300 295 300 1175(g)
diesel "   n.a. 434(g)
electric . " 60 232(g)

(ii) wagons (in terms of 4-wheelers) " 2924 41966(g) 26000 20000 33500 109866(g)

(iii) passengers coaches 479 4384(g) 1300 1210 1420 7837(g)

15 automobile and ancillary industries



(i) passengers cars 000 nos. }
20 20 30 30
(ii) commercial vehicles } „ 16.5 25.3





5.5 5.5 10 10

(iii) jeeps and station wagon}"

(iv) automobiles
ancillaries including trailers
000 nos. 0.7 n.a. 2.5 2.5
(v) motor cycles and
scooters ,, 1-5 24 18 48 to 60 50
16 ball and roller bearings million nos 0.08 0.9 1.6 2.9 10.0 14.0(h)
17 earth moving equipment
(i) crawler tractors nos. 600 500
(ii) dumpers and scrapers 600 500
(iii) shovels " 125 100
18 road rollers 800 400 800 706
19 agricultural imple ments and machiner 27.0 18-0
(i) power driven pumps 000 nos. 34 37 184 90 184 150
(ii) diesel engines (stationery) " 5. 5 10 62 40 72 66
(iii) tractors " 1.05 0.6 12.0 10.0
20 bicycles million ton s 0.10 0.51 2.2 1.05 2.2 2.0(i)
21 sewing machines 000 nos. 33 111 268 297 700 700(j)
22 welding electrodes million r. feet 600 350 1080 900
23 ship building (expansion of Hindustan shipyard, dry dock and second ship-yard) . 000 CRT 50(g) 20 20 50 to 60 50 to 60 32.0 7.0
C. electrical engineering industries

24 electric transformera electric transformersbelow 33kv.)

million kva 0.18 0.63 2.2 1.2 4.0 3.5
25 electric motors (200 h.p. and below) million h.p 0.10 0.27 1.25 0.7 3.0(k c) 2.5(k)
26 electric cable and wires
(i) i.a.c.s.r. . 000 tons 1.7 8.7 28 22 55 44
(ii) v.i.r. and plastic coated . million yds 39.4 86.9 500 220 800 600 30.0 18.0
(iii) paper insulated miles. 1000 750 4500 4000
(iv) dry core cables miles 525 470(1) 1077 2000 to 25 00 2000
(v) coaxial cables miles 300 200 300 300
27 electric fans million no s. 0.1 9 0.29 1.8 0.98 2.8 2.5
28 house service meters " 0.25(c) 0.6 . 0.46 2.5 2.1


name of industry unit 1950-51 Production 1955-56 produc tion 1960-61 1965-66 fixed investment during 1961-66 (Rs. crores) foreign exchange component of fixed investment (Rs.crores)
estimated capacity estimated production capacity production
29electric lamps million nos.
(i) G.L.S. and others " 15.0 25.03 43.13 (1) 38.05 76.0 68.0
(ii) flourescent tubes " Nil 0.75 1.20 (1) 1.46 7.0 6.0
30 radio receivers (organised sector) 000 nos. 49.0 102.0 279.18(1) 254.0 900.0 800.0 30.0 18.0
31 storage batteries . 000 nos. 200.0 258.08 379.3(1) 509.0 900.0 800.0
32 dry batteries million nos. 136.3 161.1 224.50(1) 200.0 4CQ.O 350.0
33 heavy electrical equip ment in the public sector . Rs. crores 80.0 80.0 104.0 60.0
D. chemical and allied industries
34 fertilisers 225.0 100.0
(i) Nitrogenous (in terms of nitrogen) 000 tons 9 79 248 110 1000 800
(ii) phosphatic (in terms of P205 " 9 12 60 55 500 400
35 heavy chemicals . 42.0 18.0
(i) sulphuric acid " 99 164 476 363 1750 1500
(ii) soda ash " 45 81 268 145 530 450
(iii) caustic soda . " 11 35 124 100 400 340
(iv) calcium carbide " 3(c) 17 10 67 60
(v) .sodium hydro-sulphite " 2.3 0.6 12 10
(vi) hydrogen peroxide 3 1.2 9.5 8
36 miscellaneous chemicals
13.0 5.0
(i) carbon black 30 30
(ii) industrial explosh yes :
(a) blasting explos ves „ 5 6 20 20
(b) liquid oxygen explosives . * 2 2 9 9
(e) safety fuses million coils. 7 2 25-0 25-0
(d) detonators . million nos. 80 80
(iii) rubber chemicals 000 tons 2 n.a. 3 3
(i) soft coke (low temperature carbonisation) million tons

2-0 1-8 42-0 26-6
(ii) hard coke by product 000 tons 620 500 1160 1100 29.2 13.0
38 dyestuffs organic intermediates . 28-0 13.0
(i) dyestuffs million Ib 4-0 18 11-5 22-4
(ii)intermediates tons 25000 25000
39 drug and pharmaceutic sals 39.3 18.0
(i) sulpha drugs tons 83(c) 330 150 1000 1000
(ii) penicillin million mega units 6-6 45 40 205 120
(iii)streptomycin tons 150 150
(iv) p.a.s. . " 40(c) 145 100 400 400
(v) anti- dysentery drugs 6.0(c) 60 30 75 75
(vi) i.n.h. " 1.0(c) 33 30 100 100
(vii) Phytochemicals " 76.4 76.4
(viii) d.d.t. , " 284 2800 2800 2800 2800
40 plastics (polyethylene p.v.c., polystyrene and others) 000 tons 0.7 15-7 10-0 85-0 74-0 27-5 10-5
  • ANNEXURE III—contd.

name of industry unit 1950-51 production 1955-56 -production 1960-61 1965-66 fixed investment during 1961-66 Rs. crores) foreign exchange component of fixed investment Rs. crores)
estimated capacity estimated production capacity production
41 (i) soap(2) 000
106 102 254 150 254 500
(ii) synthetic detergents " 7-2 1-5 20-0 20-0
42 raw films : cinematographic etc Million
sq. Mtrs
10-0 10-0 9-0 5-5
43 rubber manufactures 11.5 5.0
(i) automobile tyres million
0-9 1-61 1 -35 3-7 3-0
(ii) biycycle tyres " 5-8 16-9 11-0 38'6 31-0
44 synthetic rubber 000
50 50 25-0 12-5
45 (i) paper and paper board " 114 187 410 350 820 700 100-0 35-0
(ii) newsprint . " 4-2 30 25 150 120
(iii) security paper tons 1500 1500 5-5 4-0
46 cement million
2-7 4-6 9-0 8-5 15-0 13-0 60-0 12-0
47 refractories tons 0-28 0-87 0-52 2-0 1 -6 22-0 10-0
48 electric porcelain (h. t. and l.t. insulators) 000
4-3 12-5 8-4 30 24 3-0 2-2
49 glass and glassware (including opthalmic glass) " 92-0 125 370 225 615 440 n -o 3-5
50 (i) petroleum products million tons

3-6 6-02 (crude oil] 5-67 10-77 (crude oil) 9-86 73 33-4
(ii) lubricating oils 000 tons 100 100
51 power and industrial alcohol million gallon s 8-6 15-2 40 22 72 60 4-0 0.4
52 industrial gases 11-0 6-5
(i) oxygen million
1000 700 2300 1650
(ii) acetylene . " 156 90 250 200
E. textile industries
53 cotton 32-5 11-0
(i) yarn million
1179 1640 2100 1750 2250 2250
(ii) cloth (mill made) million yds 3720 5102 5300 5127 5800 5800
jute . 000 tons 892 1150 1200 1065 1200 1100
54 rayon and staple fibre 75-0 45-0
(i) rayon filament , million lbs 0-4 16-0 52-3 47-0 140-0 140-0
(ii) staple fibre . " 14-0 48-0 47-8 75-0 75-0
(iii) chemical pulp 000 tons 100-0 90-0
55 woollen manufactures
(i) woollen and worsted yarn . million lbs 18-3 21-7 67 28 67 52 2-0 1.0
(ii) woollen cloth million yds 15-0 48 15 48 35
(iii) wool tops . million lbs 10 31-5 31-5
F. Food industries
56 salt million tons 2-7 3-0 3-9 3-7 6-5 5-4 9-0 2-0
57 sugar (3) " 1-12 1-86 2-25 3-0 3-5 3-5 100-0 12-0
58 vegetable oils—
(i) solvent extraction of oil cakes 000 tons 550 (cake) 25 (oil) 2000 (cake) 160 (oil)
(ii) cotton seed oil " 180(m) (seed) 15(m) (oil) 850 (seed) 100 (oil) 10-0 2-5
59 vanaspati " 153 276 434 330 550 500
60 miscellaneous industries 168 -0(n) 43-0
total 2454-6 1109-9

N.B.—Capacity for engineering industries is estimated on the basis of double shift operation.
(1) Except in the case of cotton textile machinery, capacity and production under this head are related to the demand for original equipment.
(2) Excepting for the production figure in 1965-66, the figures relate to the organised sector only.
(3) Figures relate to crop year.

  1. Over and above the expenditure envisaged under foundry/Forge (included under item 9 (ix) in the table), Mining Machinery project and steel castings foundry of Chittaranjan Locomotive Works.
  2. Investment on the capacity under the public sector is shown under the outlay on Minerals.
  3. Relates to calendar year.
  4. Expenditure envisaged private sector schemes only. Expenditure envisaged in the public sector are included under items (10) and (33) in the table.
  5. Actual production will be linked by and large with the programme for expansion of steel capacity.
  6. Relates to the public sector only.
  7. Relates to five year period.
  8. By working the capacity on three shifts.
  9. An additional 0 -5 million bicycles are expected to be produced in the small-scale sector.
  10. An additional 150000 sewing machines are expected to be produced in the small-scale sector.
  11. These figures are for 300 h.p. and below.
  12. Single shift capacity.
  13. Figures relate to organised sector only.
  14. Including Rs. 50 crores for townships and Rs. 47 -0 crores for other public sector projects not covered under above industries.
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