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Centrally Planned Economy: Meaning & Definition
A centrally planned economy is an economic system in which economic decisions are made by the government of a country through a central economic planning bureau. It is also called a command economy and is associated with a socialist or communist economic system.
Features of Centrally Planned Economy
- Government control of the economy is absolute.
- Resources are owned by the government on behalf of the people.
- The aim of production is to maximize public welfare and raise the general standard of living.
- The prices of goods and services are fixed by government.
- Economic decisions are made by the government.
- Little or no individual economic freedom exists.
- Labour is adequately engaged in productive activities.
- Equitable distribution of income is ensured.
- There is lack of unhealthy competition in the system.