India follows a mixed economy policy, 'Mixed Economy' policy refers to :
(1) The industrial sectors are reserved by government
(2) The industries are divided between the govt. and private individuals
(3) The primary sectors are reserved by the private individuals
(4) Some economic sectors are reserved for govt, while others are open to the private sector
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Some economic sectors are reserved for govt, while others are open to the private sector
Note 1: The given answer is as per the official NTA Answer Key. However, Option (2) can also be considered correct, as explained below.
Option (1) The industrial sectors are reserved by government — Incorrect. If every industrial sector were reserved for government, there would be no private sector and the economy would not be mixed. The government reserved only some sectors, such as defence, transport and communication, power and mining, which were necessary for private industry also to flourish.
Option (2) The industries are divided between the govt. and private individuals — Can also be considered correct. This is the same idea as Option (4): a mixed economy combines a public sector run by the government with a private sector, so industries are divided between the two.
Option (3) The primary sectors are reserved by the private individuals — Incorrect. No sector was reserved for private individuals. On the contrary, at independence the government took over the ‘commanding heights of the economy’, and mining, a primary-sector activity, was among them.
Option (4) Some economic sectors are reserved for govt, while others are open to the private sector — Correct as per NTA. A mixed economy combines the public sector and the private sector. In India’s mixed economy policy, some sectors were reserved for government, while others were open to the private sector. Within that, the government tried, through its licensing policy, to spread industries over different regions.
Note 2: The section ‘Industrialisation in the Early Years of Indian Independence’, which explains India’s mixed economy policy, in the chapter ‘Change and Development in Industrial Society’, was there in the pre-rationalised NCERT, the textbook of 2022. This portion has been deleted from the NCERT book (2025-26), though the chapter is still there.
NCERT (Pre-rationalised): “Industrialisation in the Early Years of Indian Independence … At independence, the government took over the ‘commanding heights of the economy.’ This involved defence, transport and communication, power, mining and other projects which only government had the power to do, and which was necessary for private industry also to flourish. In India’s mixed economy policy, some sectors were reserved for government, while others were open to the private sector. But within that, the government tried to ensure, through its licensing policy, that industries were spread over different regions.…” |