Q. Which of the following is/are feature/s of indicative planning?
1.Mixed economies follow indicative planning method.
2.Indicative planning replaces the market system with the state system.
3.Policies announced under this system are indicative in nature.
How many of the statements given above are correct?
Answer: B
Notes:
Explanation: The identifying features of indicative planning may be summed up as under:
- Every economy following the indicative planning were mixed economies.
- Unlike a centrally planned economy (countries following imperative planning) indicative planning works through the market (price system) rather than replaces it.
- Side by side setting numerical/quantitative targets (similar to the practice in the imperative planning) a set of economic policies of indicative nature is also announced by the economies to realize the plan targets.
- The indicative nature of economic policies, which are announced in such planning, basically encourage or discourage the private sector in its process of economic decision making.
Source: Ramesh Singh
