Write a short note on Mixed Economy in India.
Mixed Economy in India.
Since both purely capitalist and communist economies have been found wanting in many respects, may countries have tried out a combination of state ownership and control of business and private enterprise. This combination has come to be known as a Mixed Economy.
In a mixed economy, private enterprise is permitted to function and flourish to control and restrictions by the Government. The extent of Government control over business and its interference in economic activity varies from country to country.
But a mixed economy aims at blending together the best control socialist or communist economy with the best of free enterprise in a capitalist economy. India had adopted the mixed economy system. The overall planning and allocation of resources is decided by the Central Government and the planning Commission. Private enterprises and public enterprises are allowed to function so as to contribute towards the development of the economy.
The overall objective of the economic system in India is to achieve economic growth with distributed justice. Certain areas of economic activity are left open to private enterprise, certain others are reserved for the public enterprises while in some areas both the sectors may compete or collaborate.
Thus, there is a combination of the features of capitalism and socialism. From the point of view of the business system in India the adoption of the mixed economic system means that business firms whether in the private sector or in the public sector must work towards the improvement of the economic lot of the people, and narrowing down of inequalities of income and wealth.
It also places heavy responsibility on private business to serve the society by meeting its needs without any exploitation. Thus, the social responsibilities acquire particular significance for the business system in the context of a mixed economy in India.