Q.Distinguish between Imperative Planning and Indicative Planning.

The two differ mainly in how binding the plan's targets are, and who ultimately makes the production decisions.

Compare on how binding the targets are, who implements them, and which type of economy each suits.

Imperative Planning vs. Indicative Planning:

1. Nature of targets — In Imperative Planning, the targets set by the central authority are compulsory and binding on producing units; in Indicative Planning, targets are broad guidelines, not compulsory obligations.
2. Who implements it — Imperative Planning is implemented mainly through state-owned or state-directed production; Indicative Planning is implemented mainly through private enterprise and market forces, with the state facilitating rather than compelling.
3. Type of economy it suits — Imperative Planning is characteristic of centrally-planned (socialist/command) economies; Indicative Planning suits a mixed economy such as India's, and India's own approach shifted in this direction after the 1991 economic reforms.