Exercises · Q9
Q.Distinguish between Centralised Planning and Decentralised (Indicative) Planning.
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Start your 14-day free trial to unlock the full solution →| Basis | Centralised Planning | Decentralised (Indicative) Planning |
|---|---|---|
| Ownership | State owns the principal means of production | Predominantly private ownership; market-based economy |
| Nature of targets | Compulsory and binding on producing units | Suggestive/guiding, not compulsory, for the private sector |
| Role of the plan | Directs virtually all major production and pricing decisions | Sets broad national priorities and uses incentives (fiscal, credit, public investment) to guide private decisions |
| Role of private enterprise | Little or none | Free to make its own production and investment decisions |
| Classic example | The former Soviet Union | Market economies using plan-guided incentives (India has moved substantially toward this model, especially since 1991) |
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