It is an economy which is owned and controlled by the society. Economy resources are owned by the society and they are used in the public interest. All important decisions are taken by the government.
Individuals in the socialistic economy do not have right to own private properties. The economy is managed and controlled by Planning Commission, the central authority. There is the least I inequality of income in this economy.
Income is distributed among individuals on the basis of their needs and efficiency.
Basic economic problems of the economy are solved by the central authority of the state i.e., Planning Commission. Price of goods and services is determined by the Government. Public interest is supreme while taking decisions about production, consumption and investment. Employment is provided to every individual. Social insurance schemes are applicable.