Economic Planning in India.Transition from Mixed Economy to

Market Economy. Transition in GDP.

Presented ByK.Naga Sundar

S.Sridhar Reddy T.Mounika

Contents

• Introduction of Economic Planning• Essential Objectives of Planning• Definitions of Mixed and Market Economies• Transition from Mixed to Market Economy• Transition in GDP• Sectors affecting GDP• Factors affecting GDP• Conclusion

Introduction of Economic Planning• Planning is an economic mechanism for resource

allocation and decision-making.• Economic planning refers to any directing or

planning of economic activity outside the mechanisms of the market.

• The Economic Planning has been going on great since independence.

• This has played a major role in the development of the country and led India become self sufficient.

Essential Objectives of Planning

• High Rate of Growth• Economic Self-Reliance• Social Justice• Modernization of the Economy• Economic stability

Definitions Of Mixed And Market Economies

• Mixed economy is an economic systems in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.

• A market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand and the prices of goods and services are determined in a free price system.

Transition From Mixed toMarket Economy

• A mixed economy permits private participation in manufacturing and production.

• It also contributes to public ownership in fabrication and manufacturing which can take full advantage of social welfare.

• In a mixed market economy this system is governed by licensing and regulation policies.

Transition From Mixed Economy to Market Economy(contd…)

• A market economy is known as a "free market economy".

• It is controlled by the law of supply and demand which in return will determine the price of services and goods.

• In a market economy the exchange of goods, services, and information take place freely according to the supplier and the buyer.

Transition From Mixed to Market Economy(contd…)

• Mixed economy’s regulations may paralyze features of production.

• Lack of price control management can cause shortages in goods and can result in recession.

• The market economy is merely driven by the sellers and the buyers with very few government regulations.

• This in turn leads to effective marketing.

Factors Affecting GDP

• Agriculture• Investments• Services• Textiles• Tourism• Banking and Finance• Foreign Direct Investments

Transition in GDP

• The goal of GDP is to measure the total production of goods and services produced in the economy each year.

• GDP is important because it gives an indication of how successfully society is addressing the scarcity problem.

Sectors Affecting GDP

Conclusion

• Planning involves economizing of scarce resources inorder to reduce the inequalities of income and wealth.

• Transition from Mixed to Market economy leads to proper exchange of goods and services at an eqilibrium price.

• Transition in GDP defines the overcoming of scarcity problems in the market.