Ayussh Sanghi is teaching live on Unacademy Plus
INTRODUCTION TO INDIAN ECONOMY 1.3 ECONOMIC POLICY OF GOVERNMENT PRESENTED BY AYUSSH SANGHI
ABOUT ME Passionate about Teaching >Taught at most reputed Civil Services Institutes >CA, Lawyer Follow me on: https://unacademy.in/user/ AyusshSanghi
WHAT IS ECONOMIC POLICY? Every action taken by any country's government to influence its economy is termed as a part of it's economic policy
EXAMPLE o Five - year plans in India are a part of India's Economic Policy. o The second five year plan was centred around industrialization and the country opened 4 steel plans in collaboration with foreign countries. o India adopted a mixed economy where both public sector and private sector would play a role in the economy. Thus, our industrial policy resolution, 1948 and later 1956, revolved around that philosophy.
EXAMPLE In 1965, India embarked on green revolution and it resulted in improving the agriculture sector tremendously. At the same time, it solved the problem of food security for India.
OBJECTIVE OF ECONOMIC POLICY Efficiency- An efficient economy is one that produces what people want at the least possible cost. If the system allocates resources to the production of things that nobody wants, it is inefficient. Example: Majority of people in Delhi want more dispensaries for affordable medicines but the government chooses to provide them with free water and electricity, then it is an inefficient allocation.
OBJECTIVE OF ECONOMIC POLICY o Equity - A more equal distribution of income and wealth. Example: It is a technical concept as Equity may imply poverty alleviation, but the extent to which the poor should receive cash benefits from the government is the subject of enormous disagreement.
OBJECTIVE OF ECONOMIC POLICY Growth - It is often defined in terms of economic growth. Economic growth is an increase in the total output of an economy. If output grows faster than the population, output per capita rises and standards of living increase.
OBJECTIVE OF ECONOMIC POLICY Stability - It refers to the condition in which national output is growing steadily considering: low inflation and full employment of resources