Given below are two statements: one is labelled as Assertion (A) and the other is labelled as Reason (R).
Assertion (A): In reality, all economies are mixed economies.
Reason (R): In India, the role of the government in the economy has been reduced considerably in the last couple of decades.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Both (A) and (R) are true but (R) is not the correct explanation of (A).
Assertion (A): In reality, all economies are mixed economies. — True. In every economy, some important decisions are taken by the government, and economic activities are by and large conducted through the market.
Reason (R): In India, the role of the government in the economy has been reduced considerably in the last couple of decades. — True. India’s government played a major role in planning after Independence; that role has come down in recent decades.
Why R does not explain A?
R describes a change in one country over time. It cannot show why every economy is mixed.
A is true because all economies have both government decisions and market activity. They differ only in the extent of the government’s role.
NCERT (2026-27): “1.3.2 The Market Economy … In reality, all economies are mixed economies where some important decisions are taken by the government and the economic activities are by and large conducted through the market. The only difference is in terms of the extent of the role of the government in deciding the course of economic activities. In the United States of America, the role of the government is minimal. The closest example of a centrally planned economy is the China for the major part of the twentieth century. In India, since Independence, the government has played a major role in planning economic activities. However, the role of the government in the Indian economy has been reduced considerably in the last couple of decades.” |