Previous Year Question

Mixed Economy is an economic system in which the Public Sector and Private Sector coexist. Economic activities are carried out by both the government and private enterprises, and resource allocation involves the role of government intervention alongside market mechanisms.

The Public Sector includes enterprises owned or controlled by the government. Their objectives may include promoting economic development, providing essential services, expanding infrastructure, and advancing social welfare.

The Private Sector includes enterprises owned by private individuals, companies, and institutions. Their economic activities are primarily driven by profit, investment, competition, production, and market demand.

After Independence, India adopted the mixed economy model. The Industrial Policy Resolution, 1948, defined the roles of the public and private sectors. Subsequently, the Industrial Policy Resolution, 1956, gave special importance to the public sector and classified industries into three schedules (Schedules A, B, and C).

Under the economic reforms of 1991, Liberalisation, Privatisation, and Globalisation were promoted. This increased private sector participation and competition in the economy, but the role of the public sector and government regulation did not disappear.

The basis of a mixed economy is not the size of industries, the coexistence of income groups, or the equal promotion of agriculture and industry, but the participation of both sectors in ownership and economic activities.