Nature of Indian economy :India – as a mixed economy

India – as a mixed economy
As we have discussed earlier about the types of economies, namely capitalist, socialist and mixed
economies, we are aware that India is a mixed economy. The features of a mixed economy which exist
in India are:
Private ownership of means of production: This is observed in most of the agricultural, industrial
and service sectors.
Important role of market mechanism: Market forces of demand and supply have a free role in
determining the price of the commodity. The interventions of the government in price determination
have substantially reduced.
Growth of monopoly: India has witnessed the emergence of a large number of big houses such as,
Tatas, Birlas, Reliance, etc. in the private sector.
Presence of a large public sector along with free enterprise: Though the role of public sector has
reduced, it coexists
with a large and dominating private sector. The public sector plays a crucial role
in strategic sectors such as arms and ammunitions. It also sets up the infrastructure necessary for
the development of the private sector.
Economic planning: The Planning Commission lays down overall targets for the economy as a
whole, for the public sector as well as the private sector. The Government tries to achieve these
targets by providing incentives to these sectors. Thus, planning is only indicative in nature and not
compulsive.
Due to the presence of the above characteristics, we conclude that the Indian economy is a mixed
economy.