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Politics Of Planned Development

Question

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Why the Indian economy has described as mixed economy and what are its criticism?

Solution

India did not folow any two known paths to development- it did not accept the capitalist model of development in which development was left entirely to the private sector, nor did it follow the socialist model in which production is controlled by the state. Elements from both these models were taken and mixed together in India. That is why it was described as 'mixed economy'.

The following are its criticism:

(i) The planners did not provide the private sector with enough space and the stimulus to grow.

(ii) The systems of licenses and permits for investment created hurdles for private capital.

(iii) The state control led to inefficiency and corruption.

(iv) The state did not spend sufficient amount on public education and healthcare.

(v) The state intervention did not help the poor but created a new middle class who had no accountability.

Some More Questions From Politics of Planned Development Chapter

Which of the following ideas did not form part of the early phase India’s development policy ?

The idea of planning in India was drawn from
(a) the Bombay plan (c) experiences of the Soviet bloc countries

(b) Gandhian vision of society (d) Demand by peasant organisations

Match the following:

What were the major differences in the approach towards development at the time of Independence ? Has the debate been resolved ?

What was the major thrust of the First Five Year Plan ? In which ways did the Second Plan differ from the first one?

What was the Green Revolution ? Mention two positive and two negative consequences of the Green Revolution.

State the main arguments in the debate that ensued between industrialisation and agricultural development at the time of the Second Five Year Plan.

“Indian policy makers made a mistake by emphasising the role of state in the economy. India could have developed much better if private sector was allowed a free play right from the beginning”. Give arguments for or against thisproposition.

Read the following passage and answer the questions below:
“In the early years of Independence, two contradictory tendencies were already well advanced inside the Congress party. On the one hand, the national party executive endorsed socialist principles of state ownership, regulat ion and control over key sectors of the economy in order to improve productivity and at the same time curb economic concentration. On the other hand, the national Congress government pursued liberal economic policies and incentives to private investment that was justified in terms of the sole criterion of achieving maximum increase in production. ” — Francine Frankel

(a) What is the contradiction that the author is talking about ? What would be the political implications of a contradiction like this ?

(b) If the author is correct, why is it that the Congress was pursuing this policy ? Was it related to the nature of the opposition parties ?

(c) Was there also a contradiction between the central leadership of the Congress party and its State level leaders ?

Why did the Orissa government sign Memorandum of Understanding with both international and domestic steel makers ?

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