Which of the following is an advantage that the government has by opting for a five-year plan for the development of the economy?
A- It permits the government to distribute the taxes equally between the rural and the urban areas.
B- It enables the government to be eligible for loans from World Bank in order to make significant changes in the country.
C- It permits the government to focus on the larger picture.
D- It allows the government to make a long-term intervention in the economy.
Choose the correct answer from the given options:
Answer & explanation
Correct answer: option 3
The correct answer is Option 3 - C and D
The correct statements (advantages that the government has by opting for a five-year plan for the development of the economy) are:
C- It permits the government to focus on the larger picture.
D- It allows the government to make a long-term intervention in the economy.
The incorrect statement statements are:
A- It permits the government to distribute the taxes equally between the rural and the urban areas.
B- It enables the government to be eligible for loans from World Bank in order to make significant changes in the country.
Five-year Plans in India:
The concept of Five-Year Plans in India was inspired by the Soviet Union's (USSR) central planning system.
The idea of the FYP is very simple: the Government of India prepares a document that has a plan for all its income and expenditure for the next five years.
Accordingly, the budget of the central and all the State governments is divided into two parts: the ‘Plan-budget’ and the ‘Non-Plan’ budget.
A five-year plan has the advantage of permitting the government to focus on the larger picture and make a long-term intervention in the economy.