India initially adopted a mixed economy model, aiming to combine the best elements of both capitalist and socialist economic systems. This approach was chosen to balance the goals of economic growth and social justice. However, the model led to a range of regulations and licenses, often dubbed as the License Raj, which critics argue hampered the country’s economic development.

Criticism

1.Red Tape: The administrative complexities of securing licenses, permissions, and clearances stymied innovation and expansion.

2.Corruption: The system was also prone to corruption, as bureaucratic discretion played a significant role in business decisions.

3.Inefficiency: A lack of competition led to inefficiency and complacency among domestic industries.

In Defence

1.Industrial Diversification: The mixed economy model enabled the growth of a diversified industrial base in India.

2.Social Welfare: With sectors like education, healthcare, and transport often under government control, there was a greater focus on social welfare.