Question

why is India called a planned economy

Answer 1

A planned economy is a type of economic system where investment and the allocation of capital goods is performed through economy-wide economic and production plans. A planned economy may be based on centralized, decentralized or participatory forms of economic planning.[A command economy or administrative command economy refers to the nominally-planned economies of the former Soviet Union and Eastern Bloc, highlighting the central role of hierarchical administration in guiding the allocation of resources in these economic systems as opposed to planned coordination.

Answer 2

in a planned economy the State or Govt guides the planning process. It may be imperative or indicative planning. In Communist countries most of the economic activities are undertaken by the State and come under imperative planning. The private sector is almost non-existent in these countries. Planned economies are usually associated with Soviet-type central planning, which involves centralized state planning and administrative decision making.Planning in India was adopted soon after independence, when First Five Year Plan was launched in 1951-1956. The economy in India today resembles a capitalist economy with certain modifications. Most economies in the world sit somewhere between a market economy and a centrally planned economy – India is one of these countries that has a mixed economy with several characteristics of a market economy. This country tries to change the structure of the capitalist economy to make it more appropriate for model economy situations.