Which Economic System was chosen by India after Independence and Why?

India Chose Mixed Economic System after Independence

It is because it couldn’t choose either capitalist or Socialist system

 

Reason India didn’t choose Capitalist System

In a Capitalist Economy, goods were distributed on basis of Purchasing Power

In India, most of people were poor and had low purchasing Power

So if India chose Capitalist System, many people will be deprived of goods and chance to improve their quality of life

 

Reason India didn’t choose Socialist System

In a socialist Economy, all factories and farm are owned by government

In India,before Independence these were with Private Sector

So it was not possible for govt to change ownership pattern of land and farm after independence

Why India Choose Mixed Economy?

India wanted to combine benefits of socialist economy and capitalist economy without the drawbacks

It wanted to be a strong socialist society with Private Sector and Democracy

Why India Chose Mixed Economy Path - Teachoo.JPG

MCQ Other Books

Q2

India adopted the _____ economic system.

A Capitalist

B Mixed

C Socialist

D None of these

View Answer
  1. Class 12 NCERT
  2. Indian Economic Development

Transcript

Why India Chose Mixed Economy Path? Condition of India at Time of Independence If India Chose Capitalist System Goods Manufactured on Basis of Purchasing Power More Goods for Rich, less for Poor Poor people will not get goods and service Why India Chose Mixed Economy Path? India wanted to Combine Benefits of Both Capitalist and Socialist Reduce Drawback of Both India wanted Strong Socialist Society with Private Sector and Democracy Farm and Land with Private Sector If India Became Socialist Economy Farm and Land would be taken over by Government (Not Possible)

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.