Question

What is the role of public sector in mixed economy?

Answer 1

The role of the public sector in a mixed economy are as follows:

1. Promotion of Rapid Economic Development: Public sector undertakes creation and expansion of strong infrastructural facilities essential for development.
2. Generation of Financial Resources: It helps in mobilizing and generating financial resources required for economic growth.
3. Employment Creation: Public sector enterprises create employment opportunities.
4. Balanced Regional Development: Public sector helps in reducing regional disparities by establishing industries in backward areas.
5. Reduction of Inequality: Through progressive taxation and other measures, the public sector works to reduce income and wealth inequalities.
6. Development of Infrastructure: Public sector focuses on development of infrastructure like transport, communication, power, irrigation, education, which private sector avoids due to less profitability.
7. Building a Strong Industrial Base: Public sector plays a key role in establishing and developing industries of national importance such as atomic energy, defense, steel, heavy machinery, petroleum, and fertilisers.
8. Export Promotion and Import Substitution: Public enterprises contribute to export earnings and reduce dependence on imports by producing indigenous alternatives.
9. Regulation of the Private Sector: The government regulates the private sector to prevent exploitation and promote welfare interests.