Mixed economy in India - All you need to know. I R Wealth Blog

1. What does the idea of a mixed economy in India means? Ever imagine why a plant needs warm sunlight from the sun and carbon dioxide from the air, without the presence of any one of the two it is not possible for the plant to survive. The idea of a mixed economy in India is based upon this survival process. The mixed economy combines the best features of capitalism and socialism. The concept of a mixed economy in India allows private and public sectors to co-exist. Keeping the idea of the mixed economy of India in mind, the Indian Government has made provisions for such coexistence in industry policies formulated in 1948 and 1956. India opted for a mixed economy in order to build a nation where the private sector strives for profit maximization while the public sector works toward the welfare of citizens. As an example, heavy industries like the steel industry, coal industry, atomic energy, and defence equipment are governed by the public sector. In the private sector, you can find agriculture, smaller businesses, cottage industries, and consumer goods. The private sector, in this case, was not entirely left out as the Government got involved in the operations and growth of the private sector. Looking at the mixed economy of India In addition to encouraging free economic activity, the Government takes the necessary measures to control it at the same time. The idea is to maintain the balance in the mixed economy in India. The Government works to create favorable working conditions for the factors of production, while the factors of production can choose their own occupations. India opted for a mixed economy in order to eliminate a concentration of economic power in the hands of a few private entities. And also to make sure that innovation and competition remain by giving the private entities enough space to explore their opportunities for growth. The idea of a mixed economy in India is not allowing either the Government or the private player to have a monopoly over the domestic market and the resources of the nation. Why does India opt for a mixed economy model? India opted for a mixed economy to keep in check the political economy viewpoint. The idea was to move on from the trauma of hardcore capitalism by The East India Company. During the British colonial rule adding the flavor of socialism was very important in order to uplift the morale of the citizens of India. The idea of a free market leading to foreign investments also left the scope of history to repeat itself. The Government wanted to stop the emergence of any other foreign nations entering India purely for the purpose of looting the country. So for the initial period after the independence, the Government eliminated any chance of cruelty to happen ever again. Click Here Mixed economy in India - All you need to know. I R Wealth Blog