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

The Indian economy as seen during the British rule and seeing various nationalists, socialists, capitalists at that time advocating for the need of economic planning at one point or other, Independent India was thus destined to be a planned economy. By 1930, various proposals like Visvesvaraya Plan, FICCI Proposal, The Congress Plan, Gandhian Plan etc. were put forward to the British Government advocating the idea of planning though the government almost didn’t pay any attention to it. These aspirations and goals got their proper place after independence in the report of National Planning Committee (NPC) and finally in the Constitution of India. Looking at a broader consensus, Indian planning was based on six major objectives which were – Economic Growth, Poverty Alleviation, Employment Generation, Controlling Economic inequality, Self-Reliance and Modernisation. In course of planning, the then government chose Industrial growth as the Prime Moving Force (PMF) of the economy in place of agriculture. This decision is still a hot topic of debate as many think that focus on agriculture could have been a more viable option considering the amount of people depending on it.