(Sample Material) Gist of Important Articles from IIPA Journal
Topic: Public Sector in Independent India Suresh Kumar
PUBLIC SECTOR IN INDIA
The public sector in India, as in most other countries of the world, has been the principal instrument for fulfilling the role of the State as an entrepreneur. State intervention in the market arises out of two main reasons. Either, the market does not exist at all, as was the case with most developing countries who had acquired independence from colonial rule in the second half of the 20th Century, mainly located in Asia-Africa and Latin America; or, there were cases of severe market failures which required governments to intervene decisively in public interest as was the case in many developing and even developed economics, like the UK, France, Italy, etc.
Mixed Economy Model
In the50s and 60s and even 70s, the economic development in most of the less developed countries and the newly independent nations took place either on a mixed economy model or an autarkic State controlled model. In India, as far back as in 1956, through a parliamentary resolution, a mixed economy model was adopted which gave the public sector a strategic and pivotal role in the process of development. In pursuit of the objective of development by direct intervention in strategic areas, massive investments were made over the past four decades to build a public sector which was expected to acquire a commanding role in the economy, at least in the size and scale of operation and especially in the economic infrastructure area.
