why is India called a planned economy
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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.
As mentioned previously, India is a combination of a Socialist and a Capitalist economy. This economic system was adopted after Independence with the intention of procuring the advantages of both systems while avoiding the disadvantages. The productive activities in India are divided between the government (public sector) and the people (private sector). Some examples of industries which are placed in the public sector include: the basic industries, the capital good industries and the heavy industries whereas light industries and consumer goods industries are placed in the private sector. While the activities of the public sector are guided by welfare, the activities of the private sector are guided by profit. This creates balance in the economy as it ensures the acquisition of profit with a high level of public welfare. The public sectors are completely directed by the government whereas the private sectors are indirectly controlled by the government.
As mentioned previously, India is a combination of a Socialist and a Capitalist economy. This economic system was adopted after Independence with the intention of procuring the advantages of both systems while avoiding the disadvantages. The productive activities in India are divided between the government (public sector) and the people (private sector). Some examples of industries which are placed in the public sector include: the basic industries, the capital good industries and the heavy industries whereas light industries and consumer goods industries are placed in the private sector. While the activities of the public sector are guided by welfare, the activities of the private sector are guided by profit. This creates balance in the economy as it ensures the acquisition of profit with a high level of public welfare. The public sectors are completely directed by the government whereas the private sectors are indirectly controlled by the government.
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India is called a planned economy for its development process that has been continuing through 5 year plan since the first plan period during 1951-56. Through planning the country has set its priorities First and then by providing the financial estimates to achieve the same. Efforts have been made to mobilize resources from various sources at least cost. India has already completed eleven 5 year plan periods & 12th is in process ;)
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