Professional Documents
Culture Documents
Submitted To,
Mr. Vijay Rajput
Submitted By,
• Himangi
• Saraswati
• Shalini
• Bhavna
Introduction
• Growth strategy
• Economic system
• Economic planning
• Industry
• Agriculture
• Infrastructure
• Financial and fiscal factor
• Removal of regional imbalance
• Price and distribution control
• Economic reforms
• Per capita and national income
Economic System
• An economic environment system refers to the organization
arrangements and process through which a society makes its
production and consumption decision.
• It is the method used by society to produce and distribute
goods and services.
• Types of Economic System
– Capitalism
– Socialism
– Mixed Economy
Capitalism
• Capitalism is a social system based on the principle of
individual rights. It is an economic system based on the
private ownership of the means of production, distribution
and exchange, characterized by the freedom of capitalist to
operate or manage their property for profit in competitive
condition.
• In capitalist economy the govt. plays a minor role
• Enterprise can produced almost everything and has freedom
to produce and distribute goods and services according to
public demand.
Features of Capitalism
• Private ownership
• Free enterprise
• Consumer liberty
• Freedom to choose of occupation
• Freedom to save and invest
• The market system
• Competition
• Absence of central plan
• Limited role of government
Advantages
• Provides optimum allocation of resources, development of
enterprise, invention and use of new technology etc. due to
individual freedom
• Provides freedom to save and invest, result in higher growth rate
because saving made by sacrificing the consumption are invested for
growth.
• In capitalism consumers liberty to buy or not to buy goods and
freedom of enterprise leads to competition. Therefore, price and
other factors are set to equilibrium by market forces, i.e., demand
and supply, etc
• Rational talents are better utilizing due to individual freedom and
therefore productivity Increases.
Limitations
• Right to property and freedom of enterprise will lead to
accumulation of wealth and income disparities
• Theoretically, expressed that there will be free competition but
generally larger firms will take advantage, which will lead to
monopoly
• Absence of central planning results in no definite guidelines for
national development.
• Cut-throat competition among individual may result in
imperfection in market & adoption of unfair practices
• Once the upward and downward cycle starts there is no situation
to normality. This results in price hike, inflation, deflation,
unemployment etc.
Socialism
• Socialism means an economic system in which the
means of production are owned by the state.
• In most important aspect of this type of economy is
that all major decision related to the production,
distribution, commodity and service prices are all
made by the govt.
• Govt. is the final authority to take decision regarding
production, utilization of the finished industrial
products and the allocation of the revenues earned
from their distribution
Features of Socialism
• Abolition of private property
• Collective ownership of means of production
• Central planning
• Elimination of unfair gaps in income
• Provision of necessaries of life
Advantages
• Sale to Outsiders
• Management Employee Buyout
• Equal Access Voucher Privatization
• Spontaneous Privatization
Advantages of Privatization
• Improved Efficiency
• Lack of Political Interference
• Long-term View
• Better Management of the Enterprise
• Increased Fair Competition
• Reduced Fiscal Burden
• Encourage Entrepreneurship
• Accelerate Growth of Economic Development
Limitations of Privatization
• Lack of proper norms
• Ambiguity of objectives
• Wrong timing
• Monopoly eliminated
• Problem of cultural changes
• Poor financial strategies
• Wrong labor strategies
Conditions for Success of Privatization
• Full Employment
• Exchange Stability