Indian Economy (1950-1990): Economic System adopted by Independent India

What is an economic system?

A medium through which the government allocates and distributes available resources, goods & services across a country.

What are the three types of economic systems?

Capitalist Economy, Socialist Economy, and Mixed Economy.

What is a Capitalist Economy?

An economic system where private individuals and businesses own and control property to fulfill their interests, primarily aiming for profit.

What is a Socialist Economy?

An economic system in which all factors of production are owned and controlled by the state government.

What are the main features of a Capitalist Economy?

Private property, profit motive, free trade, no government interference, price mechanism, freedom of enterprise, freedom of ownership.

What are the main features of a Socialist Economy?

Ownership of resources by the state, no consumer choice, equal income distribution, prices set by government.

What is a Mixed Economy?

An economy that combines elements of both Capitalist and Socialist economies, with both public and private sectors coexisting.

What is Economic Planning?

A system where central authority sets targets, programs, and policies to optimize resource use and maximize social welfare.

What are the central problems of an economy?

1. What to produce? 2. How to produce? 3. For whom to produce?

What is the focus of India’s Five-Year Plans?

To remove economic backwardness and promote economic growth, modernisation, self-reliance, and equity.

What is meant by 'Import Substitution'?

A trade policy aimed at replacing imports with domestic production to achieve self-reliance.

What is the Green Revolution?

A period of significant increase in agricultural production, especially food grains, through the adoption of high-yielding variety seeds and modern agricultural techniques.

Who is known as the Father of the Green Revolution in India?

M.S. Swaminathan.

What risks are associated with the Green Revolution?

Pest attack risks, increasing income inequality, and soil quality degradation.

What were the results of economic planning in India till 1991?

Achievements included increase in national income, rise in per capita income, improved industrial production, and development of infrastructure.

What were the failures of economic planning till 1991?

Persistent poverty, high inflation, unemployment crises, and inadequate infrastructure.

What was the role of P.C. Mahalanobis in Indian economic planning?

He was instrumental in creating the framework for India’s economic planning and the Second Five Year Plan emphasizing industrialization.