ntrod tion 1.9
organising the economy was solved for all times market mix also changed. The redefined mixed
to come. The document pin-pointed good things economy for India had a declared favour for the
of both the systems and concluded that they don’t market economy. Many economic roles which
have the relationship of dichotomy, but that of were under complete government monopolies
complimentarity. The real issue is not whether to were now opened for participation by the private
have market or the state but having both of them sector. Examples are many—telecommunication,
together makes more sense. Market economy might power, roads, oil and natural gas, etc. At the same
suit one economy, while it might not suit another time, the responsibilities which were till date
due to the different socio-economic conditions being shouldered by the state alone and which
of the economies in reference. Similarly, the state could be taken up by the state only were given
economy model might serve one economy, but extra emphasis. In this category comes the whole
might not serve the other. social sector—education, healthcare, drinking
The real answer seems going for neither the water, sanitation, nutrition, social security, etc.
market nor the state but a judicious mix of both. The economic system of India was a mixed
As the state-market mix depends upon the socio- economy in the pre-1991 years as it is in the post-
economic and political conditions of an economy, 1991 years, but the composition of state-market
there can never be a mechanical prototype of the mix has gone for a change. In future, as the socio-
mixed economy, which could be applied upon economic and political factors will be changing,
every economy universally. Every economy needs
India will be redefining its mixed economy,
to explore its own mixture of market and state.
accordingly.
Again, the same state might need to redefine
composition of the state-market mix in the The emergence and evolution of the mixed
coming times according to its changed socio-eco- economy was thus able to settle the long-standing
political scenario. debate as to what was the best way to organise
an economy. Starting in 1776 with the Wealth
The process of economic reforms in India
of Nations of Adam Smith, it continued till we
started in 1991. It was, in fact, the search for a
had the World Development Report of 1999 by
new ‘state-market mix’, while India had been a
mixed economy since Independence. WB.5 The dilemma continued for almost two
and a quarter centuries (1776–2000). Today,
After Independence, India opted for a mixed
once the World Trade Organization (WTO) has
economy when the state-market dilemma was at
taken over the world economy, the brand of the
its peak globally . In the process of organising the
mixed economy it advocates, is more inclined
economy, some basic and important infrastructural
towards the free market economy. However, it
economic responsibilities were taken up by the
does not propagate to make the state an economic
state/governments (centre and state) and rest of the
economic activities were left to private enterprises, non-entity, i.e., it leaves scope for greater state
i.e., the market. The kind of state-market mix for intervention in required areas if needed.
which India went was thought to be fit for the
socio-economic and political conditions of the rolE of thE statE in an Economy
time. Once the country started the process of The dilemma of searching the ideal way of
economic reforms in early 1990s, the prevailing organising an economy, as it evolved, was also
state-market mix was redefined and a new form going to solve another riddle. This riddle was the
of mixed economy began to be practised. As the
socio-economic conditions had changed, the state- 5. World Bank, World Development Report, 1999.