answer it please it's from 9th history syllabus
Answers
The recommendation of mixed economic model for India by very first planning commission was a fair result of trade-off between efficiency and equality.
In his book, N.G. Mankiw explains this trade-off as a sure phenomenon in economics, faced by every individual.
Just after independence, the newly formed government neither had sufficient resources nor the estimate of potential resources. So, the efficiency i.e. property of getting more from scarce resources, had to be improved since the beginning. Capitalism being profit centered depicts a greater efficiency.
But on the other hand, there lied a major chunk of population that was oppressed, down trodden and underprivileged. It was quite apparent that the equality i.e. uniform distribution of economic prosperity was much needed for sustained growth of country as a whole. Socialist economy advocates equality as its numero-uno principle.
In a period when much of the wars by countries were waged to establish supremacy of their economic system, it would have been hard for India not to resort to only one of the ideologies. But our leaders did a good thing then, they looked at the feasibility of both (communism and capitalism) based on our country’s condition.
Capitalism would mean more profit in lesser hands followed by more power. This simply means those few would have the power to influence market as well as bystander (the common man). Even a thin possibility of some of those few going against the interest of government or masses would have added to the territorial tension our country was already facing. Such an economy would also mean eventually doing away with public subsidies.
A decision to opt for communist economy would have highly discouraged the class of traders and merchants who were operating ever since the ages of monarchy. The government gravely needed their expertise, capital and active participation to explore the means and prospects of economic growth. Moreover people were just out of the authoritative and rough rule of British government. A strict practice of communism might have been perceived as same causing a large scale resistance.
Above two insights made it very clear that mixed economy was an optimal choice aimed both at increasing productivity as well as reducing inequality.
Different five year plans showed government’s varied emphasis on communism and capitalism. In the first five year plan, essence of communism can be seen in abolition of landlord-ism i.e. zamindari system, ryotwari system, talukdari system etc. The constitution was amended to give legislature the ultimate authority.
On contrary, second and third plans were aimed at rapid industrialization, sufficiency of food grains, and utilisation of man power augmented with increased budget plan for private sectors.
