Page 20 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Indian Economic Policy
Pavitar Parkash Singh, Lovely Professional University

Notes Unit 2: Development Strategies in India: Planning
in India: Objectives, Strategies and Evaluation

CONTENTS
Objective

Introduction
2.1 Planning in India
2.2 Objectives of Economic Planning in India
2.3 Strategies and Evaluation of Planning
2.4 Summary
2.5 Key-Words
2.6 Review Questions
2.7 Further Readings

Objectives

After reading this Unit students will be able to:
• Describe the Planning in India.
• Explain the Objective, Strategies and Evaluation of Planning.
Introduction

India follows the concept of mixed economy, with public and private sectors playing complementary
roles, remaining active partners in the common tasks of development. Since independence, India has
following planning for social and economic development. This means the state plays a proactive role
in deciding about ‘what, how, how much, where and whom’ in economic and social activities of the
system. At the same time, it also by and large respects institutions of private property and market.
The Indian Constitution itself gave scope for market to function and yet asked the State to intervene
in the functioning of the market. India’s democratic planning aims to achieve a high and sustained
rate of growth, a progressive improvement in the standards of living of the people, eradication of
poverty and unemployment to lay the foundation for a self-reliant economy. It may be noted that
planning strategy envisaging the role of state vis-a-vis market has drastically shifted in favour of
market in the 1990s onwards.
2.1 Planning in India

Mixed economy is the outcome of the compromise between the two diametrically opposite schools of
thought—the one which champions the cause of capitalism and the other which strongly pleads for
the socialisation of all the means of production and of the control of the entire economy by the state.
The economic development of U.K., USA and many free nations of Europe and America was due to
private enterprise. This explains why in the writings of the 18th and 19th century economists, the
concept of mixed economy finds no mention, since in those days, economic liberty and non-interference
of the state in economic affairs were cardinal principles. According to the English classical and neo-
classical economists, the economic system worked smoothly and what was most profitable for the
individual, was also most conducive to the economic welfare of the community at large. Perfect
harmony in the economic system could be achieved through the acceptance of the invisible hand of
self-interest and the use of market forces of demand and supply.

14 LOVELY PROFESSIONAL UNIVERSITY