CAPF-AC (Assistant Commandant) Exam Study Material :
Indian Economy - Planning in India
Planning in India
Economic planning is a process under which a central authority (like Planning
Commission in India) defines a set of targets (related to growth and development
of the country) to be achieved within a specified period of time, keeping in
view the needs and means of the country. It refers to a system under which a
central planning authority sets a set of targets and specifies as set of
programmes and policies to achieve those targets within the specified period of
Capitalism, Socialism and a Mixed Economy
Let us have and understanding of concepts of Capitalism, Socialism and Mixed
economy. This will help us in having a comprehensive view of goals and objective
of planning, particularly in the context of the Indian economy.
It is an economic system in which major economic decisions
- what goods and services are to be produced,
- how goods and services are to be produced, and
- how goods and services are to be distributed are left to the free play
of the market forces, or the forces of supply and demand. There is a private
ownership of the means of production, and all economic decisions are taken
with a view to maximizing profits.
- only those goods and services will be produced for which there is high
demand in the market, offering high profits,
- goods will be produced using such a mix of the factors of production,
that minimizes the cost of production, and
- goods and services will get distributed according to purchasing power of
the households. Buy as much as you are able to; nothing if not able to.
Merit of Capitalism: The principle merit of this system is that if fosters
self-interest, and accordingly accelerates the pace of economic growth. Demerit
of Capitalism: The principal demerit is that is overlook the collective interest
or social interest and leaves poorer sections of the society at the mercy of
market forces of supply and demand.