India: A Mixed Economy
The Indian economy is a mixed economy. It has acquired this form with the growth of a large public sector since Independence.
Even before Independence, India has a fairly important public sector, the most important component of which was the railway system.
A mixed economy is an economic system that has elements of both capitalism and socialism. A mixed economy protects private property and permits some economic freedom in the use of capital, but it also permits government intervention in the economy to achieve social objectives.
In India, the Second Five Year Plan summed up the objectives of the planned development in the phrase ‘socialist pattern of society’, implying that “the basic criterion for determining lines of advance must not be private profit, but social gain….” and yet the character of the economy that has emerged as a result of planned development does not resemble even remotely socialism.
India officially adopted a mixed economic policy through the Industrial Policy Resolution of 1948. The resolution emphasized the coexistence of both public and private sectors.
The implementation of several industrial policies in 1948 and 1956 led to a shift towards a mixed economy.
The term “mixed economy” was coined by Pat Mullins and supported by JM Keynes. Countries like England, France, and India follow the mixed economic system.