Mixed Economy
Mixed economy
Features
1. Co-existence of public and private sectors:
Both public and private enterprises exist in this economic system. The role and areas of both the sectors arc well defined.
The relative roles assigned to the public and private sector differ from economy to economy. But generally the public sector is expected to perform certain basic functions such as:
(i) Development of economic infrastructures.
(ii) To promote basic industries that require huge investment and are of long gestation periods;
(iii) To promote industries in backward regions where inducement to invest is low.
(iv) To develop defence production industries in public sector.
Similarly, the private sector is expected to supplement the efforts of public sector and to take advantages of investment opportunities enhanced by public enterprises.
In the mixed economy the two sectors are not rivals. The two sectors are partners in the process of development, because for the efficient working of this system the co-operation between the two sectors is necessary.
The private sector in mixed economy operates under certain controls and regulations of the government.
2. Economic planning:
Generally a mixed economy is a planned economy. Public sector enterprises have to work according to a definite plan to achieve certain predetermined aims and objectives. Similarly the private sector is not left to develop in its own way.
The growth of private sector is also regulated through various controls and incentives to achieve the objects of plans.
Thus, the nature of economic planning in mixed economies is ‘planning by direction’ for the public sector and for private sector ‘planning by inducement’ is adopted’.
To ensures faster economic growth, the developmental programmes of both the sectors are coordinated in such a way that growth in one sector complements the growth in the other sector.
3. Division of industrial undertakings:
There is division of industrial enterprises
Features
1. Co-existence of public and private sectors:
Both public and private enterprises exist in this economic system. The role and areas of both the sectors arc well defined.
The relative roles assigned to the public and private sector differ from economy to economy. But generally the public sector is expected to perform certain basic functions such as:
(i) Development of economic infrastructures.
(ii) To promote basic industries that require huge investment and are of long gestation periods;
(iii) To promote industries in backward regions where inducement to invest is low.
(iv) To develop defence production industries in public sector.
Similarly, the private sector is expected to supplement the efforts of public sector and to take advantages of investment opportunities enhanced by public enterprises.
In the mixed economy the two sectors are not rivals. The two sectors are partners in the process of development, because for the efficient working of this system the co-operation between the two sectors is necessary.
The private sector in mixed economy operates under certain controls and regulations of the government.
2. Economic planning:
Generally a mixed economy is a planned economy. Public sector enterprises have to work according to a definite plan to achieve certain predetermined aims and objectives. Similarly the private sector is not left to develop in its own way.
The growth of private sector is also regulated through various controls and incentives to achieve the objects of plans.
Thus, the nature of economic planning in mixed economies is ‘planning by direction’ for the public sector and for private sector ‘planning by inducement’ is adopted’.
To ensures faster economic growth, the developmental programmes of both the sectors are coordinated in such a way that growth in one sector complements the growth in the other sector.
3. Division of industrial undertakings:
There is division of industrial enterprises