Mixed Economy in India ( Sociology Optional)

Soon after the Independence, India embarked upon managing the economy through Development Planning including only public sector.
The country established a Planning Ministry to prepare long term development plans for improvement of the economy and to advise the government on Macroeconomic Management.
Later in early 1990s due to financial crises government understood the importance of inclusion of private players in planning.
For reforms in the agricultural sector, role of private producers with government was limited to infrastructure development such as irrigation, extension services and trade in some major commodities.
The Indian economy is characterized as a mixed economy because of the simultaneous existence of both the public and private sectors.
A mixed economyis variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise.

Thinkers Perspective

The idea behind a mixed economy, as advocated by John Maynard Keynes and some others, was not to abandon capitalism, but to retain a predominance of private ownership and control of the means of production, with profit-seeking enterprise and the accumulation of capitalas its fundamental driving force.
David Hollenbachhas argued that Catholic social teaching calls for a "new form" of mixed economy. He meant that government "should supply help to the members of the social body, but may never destroy or absorb them"
Corn Laws: These were government interventions in the free market to protect native agricultural interests by limiting imports.

Inward looking Import Substitution policy in both industrial and agricultural sector pursued for about four decades led to limited trade and investment relations with rest of the world.
Export pessimism persisted in the belief that export opportunities would follow development of a large and diversified industrial base.
The objective of self-reliance was equaled with import substitution rather than ability to pay for imports.
The industrial licensing system was meant to direct resources in 'socially desired' directions, it gave large discretionary power to Bureaucrats and Technocrats to control investment decisions of private industries.
It followed a mixed economy model with overemphasis on Controlled Planning than Indicative Planning for private enterprises.
The stated primary objectives of the planning process have been Economic Growth, Social Justice and Self-Reliance.

The above regime started changing system in 1991 in form of LPG Reforms through following steps

Industry has been deregulated by abolition of the License system for establishment and capacity creation.
International trade has been liberalized by gradual removal of all import Quotas and reduction of Tariff rates to moderate levels.
Foreign investment has been promoted by permitting majority shareholding in several industries to modernize technology and take advantage of global division of labor.
India has moved into a regime of Current Account Convertibility and left the foreign exchange rate be determined by the market forces subjected to Central Bank's occasional interventions to check volatility.
Government started disinvesting its equity in public sector enterprises and the process continues.
The financial sector was also gradually liberalized and interest rates were freed within bounds.

Although the basic logic of reforms obviously was more efficient resource allocation and promoting domestic and foreign competition.

A mixed economy offers better options for growth of private and public business. It provided a conducive environment that they can work together.
The consumers has the power to choose any goods or services.
Private monopoly is controlled by the government for the maximum benefit of customers
The labourers and daily wages workers get facilities, proper wages of their work with proper government

The aim of the private sector is to get maximum profit out of their business which is sometimes against the planning done by the government.
Under the National plan, any private player has to follow their guidelines to run their business, but they find it difficult to follow.
There is no country in the world which practices absolute socialism or capitalism. In each country, there is ownership in form of mixed economy for the means of production.
There is lack of trust on private sectors.
It reduces the competition in the economy creating issues of monopoly in some sectors.

It is apparent that state Intervention through several measures has brought far-reaching changes in the life of the people. Changes are visible not only in their economic condition but also in their social and cultural life.
Also, Economists believe that a mixed approach is not that efficient as a pure free market, but this approach creates more equality for the consumers. It provides for equal information and rational participation that cannot be provided by any extreme approach.