ABSTRACT
The policy of keeping equidistant from both the Soviet socialist centrally planned economy, and the US free enterprise capitalist market economy, has been the cornerstone of the Indian economy ever since it embarked on planning for economic development in 1951. While the Soviet model of planning largely subverted the market mechanism, the Indian model was more market friendly and used the market mechanism with regulations and controls. The Soviet and Chinese development models made little use of the market pricing mechanism in the pre-globalization era. However, it would be erroneous to think that, although the free enterprise economies did not interfere with the market pricing, they did not exercise the planning process. In the US and other free enterprise economies, the government involvement in the economic activities was critical, although limited. The private enterprise did rely on government spending and did carry out elaborate planning for their enterprise growth. The duopolistic or oligopolistic nature of large corporations necessitated an intricate and elaborate planning and business strategy exercise in line with the government policy and budgetary spending.67 While the communistic planning process was more centralized, business planning of large corporates in a free enterprise economy was decentralized at the unit and industry levels. The latter process was much more efficient because of its micro approach, and it enabled different units within the industry to visualize their own perception rather than having a common scenario perceived by the central planning, which carried a heavier risk in cases of failures in projections. Risks in planning and projections were more widely distributed in the free economy than in the centrally planned economy.
