Third Plan was followed by three annual plans during which there was hardly a long term strategy. Instead, the planning process was reduced to a kind of formal exercise. Economic difficulties caused by successive drought and Indo-Pak war of 1965 strengthened the drift into a period of virtually no planning.

The Fourth Plan laid down the major objec­tives of completing the investment in projects which were already in hand or regarding which a commit­ment had been made, increasing existing capacities to level required for present or future development, and taking advantage of internal development or availabilities to build new industries or new bases for industries. The Fourth Plan provided for a total investment of Rs. 5,300 crores (23.4 percent of total plan investment) for industries, (public sector

Rs. 3,050 crores and private sector Rs. 2,250crores an additional outlay of Rs. 746 crores was envis­aged for small scale and cottage industries. Nearly three-fourths of the total investment was in the core sector, viz., iron and steel, non-ferrous metals, ferti­lisers, petroleum and petro-chemicals, coal and iron ore.

The growth rate during the plan was 5 percent against the target of 8 per cent. Several factors contributed to the slow pace of industrial develop­ment. In core industries like steel and fertilisers, production remained substantially below capacity on account of certain operational problems, lack of integrated planning and deficiencies in design, etc.

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The low production of steel and non-ferrous metals had an adverse effect on engineering industries. In the field of agro industries like sugar, textiles, fluc­tuation in agricultural output and a near stagnation in the production of commercial crops, acted as con­straints on rapid growth. Shortage of power, coal, transport and construction materials, and unsatisfactory industrial relations also affected industrial produc­tion adversely.

There was, however, a substantial production increase in several industries like alloys and special steel, aluminum, automobile tires, oil- refining, electronics, machine tools, tractors and electrical equipment.