Economic Planning in India

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Economic Planning in India
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Economic Planning in India Started After the
Independence in 1947Economic Planning in
India was a tough challenge for our national
leaders, they were facing a big problem, how to
construct the economy, 20 of people were
controlling 80 of resources, so the point was
how to make Independence meaningful to the masses
because unless and until the financial
empowerment, all  empowerment is meaningless or
shallow.Furthermore, the main challenge was how
to reconstruct economy, how to equalize the
distribution of resources among people, at the
time of Independence all sectors were shattered,
none of the sectors were in shape, the problem
was with an adaptation of model for Economic
Planning in India, then our National leaders look
at various models, like there were so many
countries earlier were colonies like USA under
British, but earlier in 1947 these countries were
developed, In the meanwhile our National leaders
thought that if it is possible to implement a
model which has implemented in these countries so
that we can ensure better lifestyle and can
eradicate poverty, unemployment from our
country.
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• So then we started looking various models
  compared to and then we were agreed that no 2
  models ever be the same, plans are designed to
  specific requirements of the country.There were
  several models across the globe which can be
  divided into 2 categories such asCapitalistic
  Plan ModelCapitalistic plan model is where
  economic decisions are taken by market forces
  like what to produce, where to produce, whom,
  when, etc., according to the demand and supply.
  This plan was also a success, as for example
  America, Australia was poor Nations, but this
  plan successfully contributed in bringing these
  Nations from poor to rich.
• So the leaders in India were decided to implement
  same but the problem was with capital, we had
  landlords, but we had not disposable capital that
  we can invest, demand and supply cannot be
  created since 80 of people were poor and lack of
  technology and capital. However, this model was
  ignoring social considerations, and its only goal
  is to make profits, so again decided not to
  implement then we turn to another method
  Socialistic model.Socialistic Plan ModelUnder
  Socialistic plan model, the economic decisions
  are taken by the Government and it was successful
  in USSR and East European countries. This model
  was close to the heart of leaders because it was
  working towards down-up strategy and most of our
  people were poor. Then planned to adopt this
  model to implement because it was close to our
  Ideology, it works to eliminate poverty. But the
  problem was with landlords we cannot overrule
  them and princely states this was the only
  problem they had.

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• Because if we see the history we find that the
  reason behind the failure of 1857 revolt was
  because of landlords and capitalist they did not
  co-operate with our freedom fighters, they
  supported Britishers hence, that is why freedom
  struggle failed. In the mean, while India itself
  was a result of communal problems forcing
  separation from India, thats why we gave special
  rules for princely states and right to property
  in our constitution to decrease the fear of
  landlords and building confidence to the princely
  states.
• Moreover, there are problems to implement both
  the models that are why the economic planners
  decided to combine both Capitalistic and
  Socialistic model and finally adopted Mixed
  Economy to achieve better growth in all aspects
  and leaders contributed their knowledge to our
  Economic Planning in India.Features of Economic
  Planning in India Economic Planning in India
  was not so easy therefore we had no previous
  experience of politics because before British
  came to India kings and queens were ruling, but
  it was necessary to make an Economic plan in
  India. Definite ObjectiveThe most important
  features of economic planning should possess
  definite objectives. Planning means conscious and
  purposeful undertaking for a definite objective.
  For instance, economic planning has the objective
  to increase the rate of growth, elimination of
  trade cycles, bringing the stability and a attain
  full employment in the economy. Central
  Planning AuthorityThe existence of central
  planning authority is another feature of economic
  planning. The central planning authority is
  responsible to prepare different central schemes
  of development and coordinating the
  various activities. In short, the central
  authority takes all decisions relating to
  production and consumption in an economy.

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•  Democratic CharacterAnother discover feature
  is its Democratic nature. No doubt, despite the
  various plans are prepared by experts but at the
  same time, adequate opportunities are provided to
  the people to actively participate at various
  levels. Being federal structure of Indian
  constitution, the Union Government only uses its
  fiscal monetary and physical controls to guide
  and give direction in relevance to the five -year
  plan subsequently. Only An Advisory Role of
  Planning CommissionIn the decentralized set-up
  of the planning commission is the apex body. It
  provides the necessary perspective, guidance, and
  coordination. Furthermore, it serves as a close
  link between agencies so that functioning may be
  smooth in this regard, the planning commission is
  an advisory character. Feasible Policies and
  TargetsA good planning is based on the initial
  resources of the country to achieve the feasible
  goals and policies. In this way, domestic
  resources are planned for attaining economic
  stability.
•  Planning for ConsumptionIn a centrally
  planned economy it should not be confined to
  production alone but the same time, it must cover
  the distribution and consumption also. In other
  words, the planning authority should not decide
  what and how to produce but it must keep in mind
  and decide accordingly among whom it is to be
  distributed.

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• Importance of Economic Planning In
  IndiaEconomic Planning is a resource allocation
  planning that is compared with the market
  mechanism. As a coordinating mechanism for
  socialism, economic planning substitutes factor
  markets and is defined as a direct allocation of
  resources, contrasted with the indirect
  allocation mechanism of the market. Rapid
  Economic DevelopmentBefore Independence, the
  long period of British rule and exploitation had
  made India one of the poorest nations in the
  world. The main task before the National
  Government was to undertake some positive
  development 
• measures to initiate a process of development,
  which can be done effectively only through the
  instrument of planning. Quick Improvement in
  the Standard of LivingIn an Unplanned economy,
  the countrys resources and materials cannot be
  employed for increasing the peoples welfare as
  the private capitalists in such an economy direct
  their activities in increasing their own profits.
  The path of planning has been chosen to promote a
  rapid rise in the standard of living of the
  people by efficient exploitation of resources.

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•  Removal of PovertyEconomic Planning In India
  is necessary for the early removal of abject
  poverty of the people, This can be done
  through.a) Planned for an increase in the
  employment opportunities of the people.b)
  Planned for production of mass consumption goods
  and their planned distribution among the
  people.c) Fulfillment of minimum needs program
  by providing essential facilities like roads,
  water, etc.d) Planned to increase the
  consumption of the poorest section of the people.
•  Rational Allocation and Efficient Utilization
  of ResourcesIndia is rich in natural resources
  but these resources are not fully exploited to
  get maximum benefits. The resources tend to
  engage in the production of goods and services
  which make more profits only this will be
  concentrated in an unplanned economy, as a
  result, rational allocation of resources is not
  possible, so India planned for the pattern of
  Investment of resources and allocation. Increas
  ing the Rate of Capital FormationPlanning can
  also raise the rate of capital formation in the
  low-level countries like India. The surplus of
  public enterprises as found in the planned
  economy can be utilized for Investment and
  capital formation. In India, the Government has
  been increasing, the rate of capital formation
  through planned Investment like roads,
  manufacturing machines, etc.

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•  Reduction in Unequal Distribution of Income and
  WealthIn absence of Economic Planning In India,
  inequality tends to increase due to growing
  concentration of Eco-resources at the hands of
  few capitalists. planning can change this trend
  with proper guidance and control of 
• production, distribution, investment, etc. The
  development works established an increase in
  Income and employment. Reorganization of
  Foreign TradeThe Foreign trade structure may be
  the direction of the primary producing economy to
  the Industrialized economy. Through proper
  controls of import and effective promotion of
  export of Industrial goods, the development plans
  can reorganize the foreign trade structure. Thus
  owing to such development the trade structure is
  not like colonial as it was before. Regional
  Balanced DevelopmentProper development programs
  may be taken for the all-round development of
  background areas, as a result, that all the
  regions are sufficiently developed. More
  Industries are to be set up in the less developed
  regions and plan should provide dispersal of
  Industries.For the most part, these are the few
  reasons for thinking towards Economic Planning In
  India.

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