At Independence India was an agrarian economy with a weak industrial base, with high poverty, illiteracy and unemployment, so the State had to play an extensive role. India followed a mixed economic system, run by both private and public enterprises. A mixed economy is the mixture of the merits of both capitalism and socialism. The public sector is on service motive; the private sector is on profit motive.
1. Structure of the Indian Economy
| Public Sector | Private Sector |
|---|---|
| Departmental Undertaking | Sole Proprietorship |
| Statutory Corporation | Partnership |
| Government Companies | Joint Hindu Family |
| – | Cooperative |
| – | Company – Public (Ltd.) and Private (Ltd.) |
| – | Multinational Corporations |