Goal of India’s development plans

I) Economic system adopt by India after independence
1. There are three main types of economic systems:
i) Capitalist economy
ii) Socialist economy
iii) Mixed economy
2. Every economic system has to answer the following three questions:
i) What goods or services should be produced
ii) How should goods or services be produced. Whether they should be produced by labour intensive technique or capital intensive technique.
iii) For whom should the goods and services be produced.
3. Capitalist economy
* What? In this economic system, people produce goods that others demand in order to sell or exchange for a profit.
* How? The answer to the question how to produce depends on the relative factor prices.
* Whom? In this type of system goods are distributed on the basis of purchasing power.
4. Socialist economy
*What? In a socialist economy the government decides what goods are to be produced.
*how? Technique of production is also chosen by the government
* Whom? Distribution of goods is based on the need of the people not on the bases of purchasing power.
5. Mixed economy
* A mixed economy is a combination of capitalism and socialism wherein both private and public sector co-exist
*What? The private sector will produce what they can produce and the government will provide those essential goods which the private sector fails to provide