Plan III

After a decade of forced feeding, the Indian economy last week was thumped and prodded, measured and weighed by the anxious experts who had put it together. Their verdict: the country, if far from prosperous, was never healthier. Thanks to $24 billion spent on two successive Five-Year Plans, industrial output has nearly doubled, farm production fattened by more than one-third, national income risen 42%; 100.000 new homes are spotted across the Indian landscape, and the life expectancy of the average Indian has been stretched out by five years. The number of universities has grown from 27 to 46. their student enrollment from 360,000 to 900,000. The production of electric power is up from 2,300,000 to 5,700,000 kilowatts.

The economic planners (who had not done it all themselves) were pleased but not fully satisfied. They put the patient on a new diet. India's third Five-Year Plan, scheduled for parliamentary debate (and virtually sure approval) next week, aims as high as the first two put together --spending $24,360,000,000 to increase industrial output 70%, farm production 25%, national income 34%, life expectancy by another four years, and daily per capita caloric intake from 2,100 to 2,300 (v. 3,000 for the U.S.).

Gobbled Gains. The ambitious scheme faces vast obstacles. India's population, growing faster than the statisticians' slide rules had calculated, will reach 492 million by 1966, gobbling up many gains while it grows. Plan III provides $105 million for birth-control programs (including mobile sterilization units), but the $1,550,000,000 budgeted for "general health improvement" may frustrate the family planners by further lowering the death rate. At best, five years from now the annual per capita income of India's millions will be only $81, and their food intake 17.5 oz. per person per day. There will be 17 million new workers coming of age in the next five years, and jobs for all but 500.000 of them, who will join the 9.000.000 now unemployed.

To finance Plan III. India will have to increase its taxes, which are already heavy, will have to achieve record profits from bureaucratically managed public enterprises, and spur its lagging export program. Even all this will be far from enough. The planners count on some $1 billion yearly in foreign loans. The Aid to India Club (the U.S., Britain. Canada, France, West Germany, Japan and the World Bank) has offered $2,225,000,000 --almost half of which is to come from the U.S. Russia has promised $500 million. Even with all this, the government expects to be $1 billion short, and to make it up by borrowing from the savings of its citizens. India begins its third plan with its foreign-exchange reserves at the dangerously low level of $321 million. A bad harvest or a sudden increase in defense spending--caused either by new incursions by Red China or political rivalry with Pakistan--would cut deeply into the plan's margin of safety.

Insured Success. India's planners are successful in part because private enterprise exceeds what is expected of it. Private enterprise still accounts for 90% of India's gross national product, and will almost surely be able to pick up a larger share of the plan's tab than the. 40% the planners expect. Another cushion is the fact that the government has never been able to spend quite all the funds earmarked for previous plans. Best insurance of all is the pledged determination of two of India's biggest foreign creditors, Britain and the U.S., not to let India fail.

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