Free Market Forces and Planning by Inducement for Economic Development

The Indian government, at the time of independence, adopted a mixed economic policy, which included both free market forces and planning by inducement. This policy was aimed at achieving economic development and growth in the country.

Free Market Forces:
The free market system refers to an economic system where the prices of goods and services are determined by the forces of supply and demand. The government does not interfere in the market, and businesses are free to operate and compete with each other. In India, free market forces were adopted to encourage entrepreneurship and private investment. The government provided incentives to the private sector to invest in key sectors of the economy, such as agriculture, manufacturing, and services. This helped to create jobs, increase incomes, and boost economic growth in the country.

Planning by Inducement:
Planning by inducement refers to a system where the government plans and coordinates economic activities, but does not directly control them. The government provides incentives and subsidies to encourage private investment in key sectors of the economy. This approach was adopted in India to encourage private investment in industries that were deemed critical for the country's economic growth, such as infrastructure, power, and steel. The government also provided incentives to small and medium enterprises to promote entrepreneurship and self-employment.

Conclusion:
The adoption of free market forces and planning by inducement helped to promote economic development and growth in India. The policy provided a conducive environment for private investment and entrepreneurship, while at the same time, the government provided support and incentives to key sectors of the economy. This approach has been instrumental in the economic growth and development of India and has helped to create jobs, increase incomes, and reduce poverty in the country.