An economy is a man-made system that is created or modified to meet the needs of society. There are 3 types of economic systems, namely mixed economy, capitalist economy, and socialistic economy. 

Here are some general characteristics of an economy:

• The type of economy is based on the means of production and ownership of resources.

• The three types of economic systems are based on the degree of individual freedom and profit motive in each.

Economic Planning In India: 

• The idea was to create a list of important problems to be solved while considering the available resources and organising them. 

• Jawaharlal Nehru, PC Mahalanobis, VR Gadgil, and VKRV Rao are among the great architects of economic progress of  Indian planning. In 1950, after becoming India’s first prime minister,Nehru established the Planning Commission.

• The Planning Commission’s primary function was to develop plans while keeping the country’s resources in mind and recommending the best ways to use them effectively and balanced. From 1951-1956, the Planning Commission created the first five-year plan (F.Y.P.). By 2014, India had already gone through more than sixty years of planning, with the eleventh five-year plan completed and the twelfth F.Y.P. still in progress.
• To address its various socioeconomic problems, India implemented a five-year planning system. These issues included widespread poverty and inequality, low agricultural productivity and food grain shortage, the lack of industrial and infrastructure development, and so on. Because these issues would take time to resolve, the Indian government established a five-year plan system beginning with the first five-year plan in 1951.

Various objectives of Economic Planning:

• The country’s socio economic issues inspire the various objectives of economic planning in India in mind. As a result, the goals are as follows: 1. Increase in economic growth 2. Increase in employment 3. Reduction in income inequality 4. Reduction impoverishment 5. Economic modernization, and 6. Ensuring social justice and equality.

• A significant portion of the questions about the need for this planning has been answered by the definition of planning itself described above. Planning entails several steps that must be completed for effective implementation and execution.
• The Indian economy is going through plenty of issues. Each problem is complex and cannot be solved in a short time. Take, for example, the issue of poverty. There is no immediate solution to these problems.

• The government must collect data to determine the number of people affected by poverty and the nature of that poverty. Data collection is a massive task in and of itself, considering India’s vast geographical area and lack of access to many areas. The government is obligated to create policies after debates and discussions in a democratic manner, which takes time. 

• The movement of adequate resources and the provision of resources to continue the program over a long time are the two most important steps in addressing the problem of poverty. It cannot be done without proper planning.

• Planning is also required to avoid wasteful expenditure, minimise costs, meet deadlines, and make the best use of resources.

The strategy of Economic Planning: 

• During the first planning period of 1951-56, no specific strategy was adopted. However, the government of India placed a greater emphasis on agriculture, recognizing that agriculture employs the majority of India’s population and that there was an immediate issue of food shortages.

• The first five-year plans in India were a tremendous success as the targeted growth rate was met. This allowed India to adopt a long-term strategy for future planning. The development strategy was thus explicitly stated in the second plan period of 1956-1961.

• The strategy was to emphasise the success of – 1. industrialization, and 2. within industrialization a greater emphasis was given on heavy industries.

Goals of Five Year Plans

• Like all other plans, the National planning committee developed five-year plans to achieve specific goals. These goals include growth, self-reliance, modernization, and equity. These were set as the base; however, there was no compulsion to be equally important in all the listed goals in the five-year plan. 
• As India had limited resources, it was a task to prioritise goals based on people’s needs. Each plan was developed to achieve something better for the citizens in India. Also, the first Union Budget was set up. 
• Apart from this, the National planning committee’s primary point that needs to be remembered was that none of the policies contradict these four critical goals, which were established as the base of the five-year plan. 

Conclusion: 

India has made significant development in infrastructure, education, science and technology, and foreign trade. One of the major drawbacks of planning in India is eliminating poverty, inequality, and unemployment. The new economic policy is the LPG model, which stands for Liberalisation, Privatisation, and Globalisation. The goal of the LPG policy is to eliminate licensing policies, increase market competition, and promote global free trade.