The government of independent india wanted the most suitable Economic system for india. They had to first understand what are the problems of an economy.
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It involves deciding the final combination of services and goods to be produced. It involves selection of goods and services and the quantity of each, that the economy has to produce.
The decisions on what techniques of production whether to select goods that need more labour for production and less capital or more capital and less labour for production .
It is about deciding the distribution of final output among the people selecting the category of people who will consume the goods.
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A capitalist Economy is one which production are owned and controlled and operated by the private sector and individuals.
A socialist Economy is one which production are owned and controlled by the government.
A mixed Economy refers to a system where public and the private sector are allotted their roles for solving the central problem in the economy.
The planning commission fixed the planning period for five years which began an era of five year plan.
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The developing countries like india can develop only if they have a good industrial sector. The industry provide employment. Which is suitable than the agriculture . The five year plan stressed more on the industrial development.
