Economic Systems :-
The nature and scope of planning is largely determined by the nature of the economic system in which it is practices. Economics can be classified into the following categories :
- Socialist Economy: It is characterized by the existence of public enterprise or state ownership of capital in all the important spheres of the economic activity. All important economic decisions are undertaken by the planning authority. Such economies generally pursue planning by direction or imperative planning.
- Capitalistic Economy: It is characterized by the existence of private enterprise and ownership of all important means of production. Resources are allocated by the operation of the price mechanism by which buyers and sellers determine what goods and services will be bought and sold in the market, in what quantities and at what prices. Such economies generally pursue indicative planning, as the role of planning authority and government is minimal.
- Mixed Economy: It is characterized by the presence of the features of socialism as well as that of capitalism i.e., public sector co-exist with the private sector. Resources are allocated on the basis of the modified price mechanism, that is on the basis of demand and supply with selective government intervention.
- Communist Economy: It is an extreme form of a socialist economy in which all means of production are owned and operated by the state and private property is not allowed. It is modeled of the notion of the Karl Marx i.e., “from each according to his ability, to each according to his need.” Socialism is said to be the preparatory but it has not yet established in any of the socialist country.
The Planning Commission is an extra constitutional and non-statutory body set up on 15th March, 1950 by a government resolution. It was constituted as an advisory body to the Union Government for the formulation of plans. The main function of the commission is to estimate the resources and to prepare a plan for the most effective and balanced utilization of the country’s resources.
The Prime minister is its ex-officio chairman. The tenure of its members and vice-chairman is not fixed. There is no qualification for its members. The number of its members as well as their appointment and removal depends on the discretion of the government.
National Development Council (NDC)
The National Development Council (NDC) was constituted on 6th August, 1952 as an adjunt to the Planning Commission to associate the states in the formulation of plans. The NDC is also an extra constitutional body. Its main function is to provide suggestions to the Planning Commission regarding the formulation of plans, to give final shape to the plans and to evaluate their implementation. A plan is published only after its ratification by the NDC.
The Prime Minister is its ex-officio chairman and the Secretary of the Planning Commission serves as its secretary. In the beginning, only the chief ministers of the states were its members, but after 1967 all the ministers of the Union Cabinet, administrators of the states rules by the center and all the members of the planning commission were included as its members.
The plan emphasized on human development, larger rate for the private sector, development of infrastructure and greater role of markets to infuse economic efficiency.
Rastriya Sam Vikas Yojana (RSVY)
A new scheme called Rashtriya Sam Vikas Yojana (RSVY), for bridging the regional disparities has been formulated in the Tenth Plan. The main aim of (RSVY) is to tackle the development problems to those areas that, despite existing efforts, continue to be characterized by high poverty, low growth and poor governance. The (RSVY) will focus on the developmental programmes for backward areas that would help reduce imbalances, speed up development and help the backward areas to overcome poverty, besides facilitating the states to take up productivity enhancing reforms.