Every country possesses natural and human resources in varying proportions. Economic development refers to the methods of utilising these resources for achieving higher standards of living for people of the country.
Characteristics of Indian Economy
1. Under-developed Economy
It is characterised by
- High population growth rates
- Abundant but unutilised natural resources
- Low rate of capital formation
- Low standard of living characterised by continuous and sustained efforts to raise it through a proper utilisation of available natural, man power, ï¬nancial and entrepreneurial resources.
2. Mixed Economy
India has a mixed economy because of
- existence of private and public sector industries makes our economy mixed.
- market trends determine production, investment and business dealings in the private sector. But marketing mechanism is not completely free from the State control.
- existence of the public sector along with free enterprise.
- economic planning since Independence gave it the character of a socialistic economy.
3. Federal Economy
As India has a federal form of government, its ï¬nancial system is federal.
- India has a strong Centre from the point of view of ï¬nances.
- Use of powers of concurrent taxation is avoided.
- Sources of revenue allotted to Centre are high-yielding and elastic.
- Money, banking and currency are with the Centre.
- Some exclusive sources of revenue are given to the Centre.
- Financial powers are divided between Centre and the States efficiently.
- Three means are used for resource transfer. There is flexibility in resource transfer.
1.Tax-sharing
2.Grants
3.Loan
Economic planning in India includes, planning commission and National development council.
Planning Commission
The Planning Commission was set-up on Mar 15, 1950 under the chairmanship of JL Nehru, by a resolution of Union Cabinet. It is an extra-constitutional, non-statutory body which consists of Prime Minister as the ex-officio Chairman, one Deputy-Chairman appointed by the PM and some full time members. The tenure of its members and deputy chairman is not ï¬xed. There is no deï¬nite deï¬nition of its members also. They are appointed by the government on its own discretion. The number of members can also change according to the wishes of the Government.
Below are the Main Functions of Planning commission:
- Assessment of material, capital and human resources of the country.
- Formulation of plans for the most effective and balanced utilisation of the country’s resources.
- Deï¬nition of stages in which the plan should be carried out.
- It will act as advisory body to the union government
- Determination of the nature of the machinery necessary for the implementation of the plan in all its aspects.
- Appraisal from time to time of the progress achieved in the execution of each stage of the plan.
- Public co-operation in national development.
National Development Council
All the plans made by the planning commission should be approved by National Development Council first. It was constituted to build co-operation between the States and the planning Commission for economic planning. It comprises Chief Minister of all the states and is headed by the Prime Minister.
Main functions
- To prescribe guidelines for the formulation of National Plan, including assessment of resources for the plan.
- To consider National Plan as formulated by the Planning Commission.
- To consider important questions of social and economic policy affecting national developments.
- To review working of the plan from time to time.
- To recommend such measures as are necessary for achieving aims and targets set out in the National Plan.
It includes measures to
1. secure active participation and co-operation of the people
2. improve efficiency of the administrative services
3. ensure fullest development of the less advanced regions and sections of the community through sacriï¬ces borne equally by all the citizens to build up resources for national development.
Related Questions
1. Stagflation implies a case of : -- View Answer2. Inflation can be contained by : -- View Answer
3. Deficit financing creates additional paper currency to fill the gap between
expenditure and revenue. This device aims at economic development but if it
fails, it generates : -- View Answer
4. A steady increase in the general level of prices as a result of excessive increase
in aggregate demand as compared to aggregate supply is termed as : -- View Answer
5. Which of the following are definite implications of a fall in inflation?
1. Prices have fallen
2. Prices are increasing more slowly than before
3. Food supply has increased
4. There is industrial stagnation -- View Answer
6. Among the causes of inflation can be listed :
1. slow growth in agricultural output
2. increasing non-development expenditure of Government
3. rapid population growth
4. rapid growth in costly imports -- View Answer
7. Among the remedies of inflation we cannot include : -- View Answer
8. A very rapid growth in prices in which money loses its value to the point where
even barter may be preferable is known as : -- View Answer
9. Inflationary Gap is a situation characterised by : -- View Answer
10. Which of the following is wrongly matched? -- View Answer
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