How does the distribution process of goods take place in socialism?

Based on what people need and not what they can afford.

The correct answer is Option 3: Based on what people need and not what they can afford.

Option 1: Based on what people desire and not what ability they have. Incorrect. Human desires are unlimited, and socialism does not distribute goods simply according to people’s wishes or desires. Distribution is mainly based on essential needs and welfare.

Option 2: Based on the purchasing power of the individual. Incorrect. This feature is associated more with a capitalist economy, where people who have more money can buy more goods and services.

Option 3: Based on what people need and not what they can afford. Correct. In socialism, the focus is on fulfilling the basic needs of all citizens, such as food, education, healthcare, and housing, regardless of their income level.

Option 4: Based on the willingness of the government. Incorrect. Although the government plays an important role in a socialist economy, distribution is not based merely on its willingness but on planned welfare-oriented policies. 

NCERT: In principle, distribution under socialism is supposed to be based on what people need and not on what they can afford to purchase. Unlike under capitalism, for example, a socialist nation provides free health care to all its citizens. Strictly, a socialist society has no private property since everything is owned by the state. In Cuba and China, for example, most of the economic activities are governed by the socialistic principles.