Economic Planning is the making of major economic decisions. What and how is to be produced and to whom it is to be allocated – by the conscious decision of a determinate authority, on the basis of a comprehensive survey of the economic system as a whole.

In an economy like India, the basis socioeconomic problems like poverty, unemployment, stagnation in agricultural and industrial production and inequality in the distribution of income and wealth can hardly be solved within the framework of an unplanned economy planning is required to remove these basic maladies.

• We can identify the following characteristic features of economic planning:
• Fixation of definite socio-economic targets;
• Prudent efforts to achieve these targets within a given time period;
• Existence of a central planning authority;
• Complete knowledge about the economic resources of the country;
• Efficient utilization of limited resources to get maximum output and welfare.

The Planning Commission of India is of the opinion that, “Planning is essentially a way of organizing and utilizing resources to get maximum advantage in terms of defined social ends. The two main-constituents of the concept of planning are: (a) a system of ends to be pursued, and (b) knowledge of available resources and their optimum allocation to achieve these ends. The availability of resources conditions the ends to be effectively achieved.”

Mixed economy and planning

Mixed economy is the outcome of the compromise between the two diametrically opposite schools of thought—the one which champions the ,cause of capitalism and the other which strongly pleads for the socialization of all the means of production and