Indian economy (1950 to 1990)

What is socialism?
It is a form of economic structure wherein all the production units are owned and operated
by the government. There is no private property.
Eg: this was followed in soviet union

Type of economic systems:

CAPITALIST SOCIALIST MIXED

The private sector Government Both private and
decides all these decided what good government sector
factors. have to be produced decide what to
and how they have produce, how and
to be produced and how much.
in what quantities
and how they
should be
distributed.
The goods are Distribution The market provides
distributed on the depends on what whatever goods and
basis of what the people need and not services are
people can afford or on what people can demanded whereas
their purchasing afford. Thus, free the government
power and not on healthcare is often provides all the
what the people provided to all its necessary goods.
need. citizens.
Production units All production units Production unit
owned by private are owned by owned by both.
sector government no
private property.
Eg: USA Eg: china and cuba Eg: india

A plan is a set of instructions and goals which are to be achieved by following set rules and
regulations. A plan tells how a nation puts its resources to use.

Industrial policy regulation – 1948

Planning commission – 1950 (the prime minister is the chair person)
P.C. mahanalobis – regarded as the architect of planning in India. He set up ISI (Indian
statistical institution and sankhya)
The common goals of planning in india:
1)growth
2) employment – full employment – doesn’t mean zero unemployment (includes natural
rate of unemployment)
3) equity – equitable distribution doesn’t mean equal distribution. The difference in income
level is allowed on the basis of the skill set. These variations are not be on extreme ends.
4) modernisation – adoption of new technology and changes in social outlook
5) self-reliance – reducing dependence on imports. This policy was extensively followed –
import substitution.