Disadvantages Of Economic Planning

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As the Great Depression deepened and widened due to the protectionist policies of governments which caused the collapse of international trade in the early 1930s, by the end of the decade economic planning became the mainstay of all belligerent powers of World War II. Since the end of World War II, it has become an accepted practice among the governments of the developing countries to publish their “development plans.” These are medium-term plans, usually for a five-year period. The aim is to select a period long enough to include projects spanning a number of budget years but not so long as to delay periodic assessment of the development effort stretching over a series of plans. In most developing countries, information about the economy…show more content…
Individual Freedom: Individuals take up economic activities to maximize their personal income. They are free to choose any occupation and consume as per their choice. Government puts some restrictions so that the producers are not given the freedom to exploit consumers and labourers. For instance, government may put restrictions on the production and consumption of harmful goods. But within rules, regulations and restrictions imposed by the government, for the welfare of the society the private sector still enjoys complete freedom. iii. Economic Planning: The government prepares long-term plans and decides the roles to be played by the private and public sectors in the development of the economy. The public sector is under direct control of the government as such production targets and plans are formulated for them directly. The private sector is provided encouragement, incentives, support and subsidies to work as per national…show more content…
Highlights: 1. The new National Institution for Transforming India (NITI) will act more like a think tank or forum and execute programs by taking the States along with them. This is in sharp contrast with the defunct Planning Commission which imposed five-year-plans and allocated resources while running roughshod over the requests of the various States. 2. NITI will include leaders of India's 29 states and seven union territories. But its full-time staff - a deputy chairman, Chief Executive Officer and experts - will answer directly to the Prime Minister of India, who will be chairman. 3. The opposition Congress mocked the launch as a cosmetic relabelling exercise - the new body's acronym-based name means 'Policy Commission' in Hindi, suggesting a less bold departure than the English version does. Several believe that is consistent with the negativism that has become the hallmark of the Congress. 4. Despite being blamed by critics for the slow growth that long plagued India, the Commission survived the market reforms of the early 1990s, riling Mr Modi with its interventions when he was Chief minister of industry and investor friendly
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