Prior to Indians development planning there was debate and discussion on what model of planned development India should adopt. The choice war between capitalist and socialist model market economy or capitalism depends on the market farces of supply and demand, in a capitalist model only those consumer goods will be produced that are in demand i.e. goods that are in demand. In a capitalist society the goods produced are distributed among people not on the basis of what people need but on the basis of what people can offered and are willing to purchase.

This means that a patient will be able use required medicine only if he/she can afford to purchase it, if he or she cannot afford to purchase it, if he or she will not able to use it even if they need it urgently. In a socialist model the government decides what goods are to be produced in accordance with the need of society. It is assumed that government knows everything about problems needs and aspiration of the country and individual desires are not given due importance. Under socialism model distribution is supposed to be based on what people need and not on what they could afford to purchase.

For example – in a socialist society free health care for its people provided by the state, a socialist society has no private property since everything is owned by the state.

In both the models capitalist and socialist have some drawbacks and limitations. The Indian government adopted a middle path known as mixed economy or democratic socialism. In the mixed economy the government and the market together answer the questions of what and how to produce and how to distribute what is produced. In a mixed economy the market produce whatever they can produce well and government produce and provide essential goods and services which the market fails to do.

• Mahalanobis model is a neo Marxist model of economic development created independently by society economist GA Fedman in 1928 and Indian statistician Prasanta Chandra Mahalanobis in 1953.


• DD Dhar was a man who proposed the fifth five year plan (1974-79) having main objectives of poverty removal, self reliance high growth rate and domestic scorings. The fifth five year plan war terminated due to change in government in 1978.


• The concept of five year plan is borrowed from the Soviet Union.